Digitization: the resilient link in food chains post COVID

COVID-19 has placed unprecedented stress on global food supply chains, exposing weaknesses and inequalities, especially in developing countries where markets are more vulnerable. The crisis has caused supply and demand gridlock and immobilized many farmers, traders and distributors. It has raised serious questions about the efficiencies of a food system that could significantly benefit from digital transformation.

The world’s population relies on global trade to deliver fresh, safe food supplies. Last year alone, the total import and export trade of animal, vegetable and food stuffs, including processed foods, between the EU27 and the rest of the world was €324 billion. The pandemic, however, has highlighted how fragile the food chain is. The UN World Food Programme forecasts that the pandemic will double acute hunger by the end of 2020.

The complexity of getting food from field to fork

Unavailability of agricultural labor, difficulties in getting food products to local markets, logistics issues due to border closures, and changes in consumer demand have all had a massive impact on the global food chain. We have all realized the complexities involved in getting food from field to fork.

Food processing plants are being forced to close because of Coronavirus outbreaks among workers. Farmers are dumping perishables due to supply chain disruption and a drop in consumer demand. Dairy Farmers of America estimated that farmers were having to throw away 14 million liters of milk every day due to distribution channels breaking down.

Organizations including the World Bank and Agriculture Ministers from the G20, Africa and Latin America have been working together to address food insecurity during the pandemic and driving change as we ease into the new normal. Digitization has already come to the fore. In Kenya, for example, the World Bank is leveraging digital technologies with agricultural tech start-ups to improve crops and delivery mechanisms. These include soil testing and enhanced market networks to help farmers cope with the pandemic’s restraints and its aftermath.

The pandemic has taught us a harsh food supply lesson

The pandemic has raised public awareness about food production. It has highlighted the critical changes that must be made to our food chain to feed a fast-growing global population and deal with any future crises down the line. To put this in perspective, farmers will have to produce 70% more food by 2050 to feed nearly 10 billion people, according to the UN Food and Agriculture Organization. At the same time, the agriculture value chain will need to address the issue of growing urbanization and food distribution.

Digital transformation holds the potential for creating more resilient, efficient and sustainable food systems. It can also help address the growing consumer demand for cleaner, safer food and the demand for food provenance. Amazon has already tapped into this trend with the purchase of Whole Foods Markets, a large organic grocery chain.

We are what we eat

According to Kantar’s Global COVID-19 Barometer, the pandemic has accelerated the trend to local or national provenance. Consumers are paying far more attention to the origin of products as they search for assurance around food safety, supply chain security and a desire to support the local economy.

The pressure on grocer retailers during this unprecedented period hasn’t always been a good one for customers. As a result, online grocers will need to work hard to win customers back as we ease into the new normal. Globally, according to Kantar, consumers find grocery shopping 25% less satisfying online than visiting a physical store. Farm shops, however, have proven to be a vital lifeline in supplying food during the pandemic and triggered consumers into asking searching questions about food freshness, food safety and food air miles. Many say they will stay with local suppliers as we ease into the new normal.

Governments are putting food integrity, traceability and security under the spotlight. In the UK, for example, The Food Standards Agency is looking at strengthening its food safety risk processes following the Coronavirus outbreak. Technology can enhance transparent farming, improving traceability, sustainability and quality of the product produced.

Orange Business Services, for example, is supporting Marine Harvest with its digitization strategy. The global seafood company produces 20% of farmed salmon worldwide. Its salmon farming and fish processing take place in the remote regions of countries such as Canada and Norway. Network reliability is critical. The Orange managed global infrastructure provides Marine Harvest with access to mission-critical data from all sites and at all stages of the fish production cycle.

According to a recent report by Lux Research, the agrifood industry must embrace digital technologies so it can address consumer demands for personalized product offerings and manage a more integrated and omnichannel global supply chain.

“The fact is, food companies that resist the digital conversion will not be able to keep up with more digital-savvy innovators and will face higher R&D costs, longer product development timelines and shrinking market share,” explains Harini Venkataraman, Lead Analyst at Lux Research.

Digitization supports smaller producers

Digital transformation isn’t just for multinational food producers. It can help countries leapfrog agricultural advances as well as address fragmentation in markets that are controlled by small-scale producers, according to the International Finance Corporation.

The Fairtrade Foundation estimates that 500 million farms provide up to 80% of the food for most of the developing world. Yet many of these farmers are living below the poverty line. Digitization can help these farmers get better yields from their crops, open up markets and pull them out of the poverty trap.

A study by Colombia's National Cereals and Legumes Federation (FENALCE) and data scientists at the International Center for Tropical Agriculture (CIAT) has shown how machine learning can significantly increase productivity, for example. Maize farmers in the country who utilized the AI-generated guidelines produced by the team saw their yields nearly double from 3.5 tons per hectare to more than 6 tons per hectare.

Productivity isn’t the only area of agriculture that digital tools can help. In Africa, for example, Orange has developed innovative services to support farmers. Orange Madagascar and Orange Mali are experimenting with climate micro insurance, protecting low-income farmers against specific risks against climate change and micro-savings solutions.

In other areas of arable crop production, a combination of IoT and AI offers enormous potential in early detection of disease in crops, monitoring water levels and optimizing harvest dates. Farmers are using ground-based wireless sensors and AI to control the optimal time for planting seeds, for example, and identifying weeds that need to be killed off. Drones are being used to calculate the vegetation density of crops.

Digital supports the EU’s move to a sustainable food system

In Europe, digitization plays a vital role in the EU’s Farm to Fork strategy. This is central to the European Green Deal, which sets out how to make Europe the first climate-neutral continent by 2050. The Farm to Fork strategy recognizes that the sustainability of food systems is a global issue and that food systems will have to adapt to crises.

The strategy draws attention to how COVID-19 has underscored “the importance of a robust and resilient food system that functions in all circumstances and is capable of ensuring access to a sufficient supply of affordable food for all citizens.”

“The coronavirus crisis has shown how vulnerable we all are and how important it is to restore the balance between human activity and nature,” explains Frans Timmermans, Executive Vice President of the European Commission.

A transparent future for the food chain

COVID-19 has forced us to take a long, hard look at where our food comes from and supply chain resilience. We are all demanding greater transparency in the food chain to better understand the food we eat and how sustainable its production is. At the same time, the agricultural ecosystem is under immense pressure to feed an ever-expanding global population.

A digitally connected and agile food chain and technology-enabled food producers are fundamental in transforming the industry to meet our nutritional needs and those of our planet.

Learn more about digital solutions from Orange Business Services, and read how companies are transforming for a digital “new normal.”

Jan Howells

Jan has been writing about technology for over 22 years for magazines and web sites, including ComputerActive, IQ magazine and Signum. She has been a business correspondent on ComputerWorld in Sydney and covered the channel for Ziff-Davis in New York.