From farm to brand: Why digital food supply chain transformation in APAC crucial post-COVID-19
This was according to an expert panel consisting of technology firm Dassault Systèmes Regional Head of Consulting DELMIA Sanket Nayak, food service and management firm Sodexo’s APAC Director for Corporate Responsibility Roshith Rajan, Coca-Cola Philippines President and General Manager Winn Everhart, and UNDP Senior Advisor for Innovation and Sustainable Development Armen Harutyunyan.
The panel was convened virtually in the Supply Chain and Sustainability: Disruption to Opportunity webinar held as part of FoodNavigator-Asia’s Unlocking Innovation Online Series and was moderated by our Editor-in-Chief Gary Scattergood.
Digital supply chain transformation was a major topic of discussion throughout the panel discussion, with Nayak highlighting that this has become even more important for food firms post-crisis to ensure resiliency and business continuity.
“At the very basest, all organisations need to transform enough to have uniform systems that help them track all their workflows and operations, [especially with what we have learned from this crisis]” he advised.
“We have worked with companies that did not get in on the digital transformation journey, and had no uniform system, so when COVID-19 hit, their data was still being managed in silos – once COVID-19 hit, and the office environment was cut off with no system in place, suddenly all their decision-making processes went away – so a single underlying system is very important.
“The time to make digital transformation is now, wherever you are along the supply chain. There are subject matter experts with more time on their hands now due to the pandemic that can help you drive this transformation to create a more robust supply chain.”
At the top of the supply chain, the importance of digital improvements lies in the improvement of farming operations, so as to ensure the flow of raw agricultural ingredients and maintaining food security even during a crisis.
“Digital farming and traceability technology are very important to the UNDP to help countries maintain food security, and we have approached this by holding an innovation initiative called Cultiv@te to attract young entreprenuers and start-ups in this field to come forth with their ideas,” said Harutyunyan.
“About half of the applications we received were from technological solution providers focusing on precision agriculture and using big data or machine learning to better understand product technologies, which is also very important as ultimately we want to offload the farmers from labour-intensive word and equip them with the knowledge and analytics to become farm managers instead.”
Precision agriculture comprises farm management technologies to achieve high crop yields, optimize raw material inputs, optimize costs such that the crops and soil receive exactly what is needed for optimum health and productivity at minimum cost.
At the other end of the food supply chain, Coca-Cola Philippines as a finished product brand sees retailer interactions as the major area where digital transformation is needed.
“What the COVID-19 pandemic has taught us is that there is still a lot of work to be done in the digital space,” said Everhart.
“For [brands such as Coca-Cola], I see things like e-routes to market, digital commerce spaces, and connecting with our small retailers and consumers as the main areas of focus for digital.
“In APAC, we’ve mainly been trying to help digitise small stores and retailers by offering bridge loans as well as creating a digital application for them to communicate with us and provide [on-the-ground] supply and demand data, so better product placement decisions can be made.”
Sustainability improvements
Supply chains today also increasingly need to be recognised as sustainable to be accepted by consumers, which has a lot to do with the changing consumer profile in APAC.
“Consumers today have very strong opinions on how materials that go into their foods are sourced and food products are made, for example products need to be more sustainable and packaging needs to be less and better,” said Nayak.
Single-use plastic packaging has commonly been viewed as a major culprit against sustainability initiatives, with companies from MNCs to start-ups developing alternatives for this - but the arrival of the pandemic appears to have ‘brought plastic back’ due to food safety concerns.
“COVID-19 caused consumer demand to rise for safer food packaging, and plastic is most commonly perceived as the safest, so it made [something of a comeback],” said Rajan.
“We’ve been trying to promote the usage of reusables and sustainable alternatives to plastics, but the reality is that it will probably take some time for consumers to get back to where they were before they felt this need for safety assurance.”
One of the most controversial types of single-use plastic concerned, PET bottles, has long been criticised as a major source of waste ending up in the oceans, but major drink firms such as Coca-Cola have continued to champion its usage due to logistical advantages in terms of weight, electricity, energy and water usage.
“The issue here is not actually PET – it’s the disposal and recycling of PET, so that’s where we’re putting our focus on,” said Everhart.
“For example in the Philippines, we have announced the first recycled PET facility here that will collect PET bottles, grind these to flakes and reuse these for food grade PET products.
“Education is also an important component here to, teach locals why recycling is important and how to recycle instead of just imposing an outright ban, as we believe that PET does have its place in the supply chain, and will continue to have a place moving forward too.”
