BlogEnvironmental Impact, Digitization and Sustainability along the Fresh Produce Supply Chain
When I read articles, watch documentaries, or entertain discussions about digital solutions to food loss and waste (FLW) there are a few goals, definitions, and numbers that I keep in mind. These give my thoughts a framework to help make sense of what I am learning and understand why sustainability matters. This structure is adopted from Bill Gates’ book How to Avoid a Climate Disaster, who I want to recognize for releasing such an informative and inspiring read.
As reported by the Financial Times in May 2021, major governments such as the EU, US, and UK and industry leaders like American Airlines, BP, and Ford Motor Company have adopted goals to cut carbon dioxide emissions to nearly zero and limit global warming by 1.5C by 2050.
These commitments are important to avert the worst effects of climate change, considered by the WWF as more frequent and intense drought, storms, heat waves, rising sea levels, melting glaciers and warming oceans; all of which will severely impact our ability to ensure global food security. Therefore, when I read about private and public digital efforts to mitigate climate change, I ask myself; how will this sustainable solution help us reach net zero emissions by 2050?
Paola Haiat already covered these definitions in a blog post, but I feel a brief summary is always welcome:
Food loss: All food produced that does not reach the end-consumer and takes place in the production, post-harvest, processing and distribution stages.
Food waste: All food that reaches the end-consumer and is discarded after becoming spoiled or passing its expiry date.
I have stamped these numbers in my mind to help relate FLW to the climate crisis.
According to research by Our World In Data, humans were responsible for releasing 50 billion tons of greenhouse gas emissions (GHGe) in 2016. GHGe are gases that trap heat in the atmosphere and are the most significant driver of observed climate change since the mid-20th century.
Food production is responsible for 13 billion tons of GHGe or 26% of global GHGe; this includes operations related to land use, crop production, livestock and fisheries, and the supply chain.
FLW is responsible for 4 to 5 billion tons of GHGe or 8% to 10% of global GHGe or 30% to 38% of food production’s GHGe.
Food lost in the supply chain is responsible for 2 to 3 billion tons of GHGe or 4% to 6% of global GHGe or 15% to 23% of food production’s GHGe.
Following this analysis, we realize the significant contribution that the food industry has to the climate, and, more specifically, the GHGe emissions that food loss is responsible for. Following a study by Our World In Data, global GHGe by the agriculture sector have increased by 16% over the past 26 years, measuring 5.03 billion tons in 1990 and 5.8 billion tons in2016. This data is troubling, considering that the aim is to reach net zero emissions by 2050, so we would hope to see these figures decrease rather than increase. One solution is the development and deployment of digital and sustainable innovations.
A significant challenge for the food industry lays in its lack of experience with digital technologies. A paper by Italian and Swedish researchers estimated that digitization in the food sector started to be studied in-depth over the past 5 years. This is alarming if you consider that computers have been around since the 1950s.
Another study by the OECD.org ranked the agriculture and food sectors as “low” in terms of digital intensity, meaning that relative to other sectors like transport, pharmaceuticals, and machinery, they are in the bottom 25th percentile of all industries considered. Hence, there is a great opportunity to catch-up to the current digitization status-quo and reap the benefits of sustainable solutions that other sectors have experienced, such as increase productivity and profit margins.
The Italian and Swedish researchers also identified digital technologies that help food companies address sector trends such as increasing needs for environmental sustainability and a more competitive marketplace. Technologies related to big data analytics and the industrial internet of things were found to automate data collection and reduce paperwork. Meanwhile, cyber-physical production systems (CPPS), cloud manufacturing, and, again, big data analytics improve production performance and share best practices. By reducing efforts to collect data and record transactions, while increasing data sharing and improving outputs, companies along the food supply chain can reduce their environmental impact and develop a sustainable and digital edge to ward-off competitors.
For example, a study during the Covid-19 pandemic conducted by the University of Cassino and Lazio Meridionale in Italy found that if a firm migrated some of its processes online then the probability that it decreased FLW increased by 24%. This evidence proves that by integrating digitization into their processes, food companies can potentially reduce the GHG emissions that are released from rotting food and the farming, harvesting, packaging, distributing, selling needs of the supply chain. Meanwhile, they can also avoid the financial losses associated to the cost of goods sold that come from inventory write-offs. These savings could then be re-invested into their business.
The impact the food and agriculture industries have on the environment can definitely contribute to climate anxiety. However, the exciting part is that big digital steps have already been made by innovative start-ups to introduce FLW reduction solutions to make the supply chain more sustainable. Too Good Too Go is eliminating food surplus, Apeel Sciences is increasing fresh produce shelf-life, and at Consentio we are streamlining the sector’s buying and selling processes. Hopefully, as the food sector continues to integrate digital and sustainable solutions into its processes, together, we can eliminate the annual 8% to 10% GHGe that FLW is responsible for throughout the supply chain.
