Overview

Profitability

Integrating the consumer into the digital food chain is being driven by both the demand of consumers themselves, and the interest of other actors in the value chain.

• Consumers are becoming more wary of health and sustainability issues, demand better information about what they eat and are ready to pay the price when justified.
• Relevant data on consumers’ demands and requirements allow producers, transformers and distributor to leverage their digital infrastructure to quickly adapt and maximize profits..

Environmental impact

The new technologies being deployed around the food consumer aim at reducing carbon footprint, avoid waste and optimize resource utilization. Digital tracking and innovative packaging contribute to reduce the intolerable amount of food wasted through the supply chain. Digital apps empower the consumer to take better informed decisions and directly influence the overall food supply chain.

• A third of the food produced is wasted through the food supply chain.

Health impact

Going digital has the most positive benefits for the end user – apps are fostering healthier lifestyle and dietary habits, while the digital innovations in the supply chain ensure fresher and properly sourced food lands on consumers’ tables.

• Smartphone penetration rates are allowing a broader consumer base to connect to the digital food chain, contributing to a virtuous snowball effect.

Traceability – The Tech

Food-sensing technologies to improve safety, quality

Food safety & quality are a major concern for the industry across the value chain. The integration of non-invasive sensing technologies within the food supply-chain allows actors to closely track and monitor food, reduce waste and improve safety.

• Hyperspectral scanning identifies signs of food bruising or rotting, and nearinfrared spectrometry measure moisture, protein or fat content to ensure integrity
• Food recalls, happening when food is found to pose safety issues or defects that could endanger consumer, are estimated to cost on avg. $10mn (direct cost) per recall in the U.S.

IoT, Digital and Analytics technologies put at the service of supply chain

The use of IoT devices in the food industry is also benefiting supply chains. Food products are attributed unique identifiers (e.g. RFID tags or barcodes) gathering food-specific data such as origin, water usage, etc. and integrate a connected ecosystem.

• A third (approx.1.3bn tons) of all produced food is wasted or lost within the supply chain, notably during post-harvest, processing and distribution phases.
• Smart thermostats secure the cold chain during transport & delivery, inventory sensors help warehouse management & enable capacity planning, smart appliances (like connected fridges) assist consumers.

Blockchain applied to the food industry

Blockchain technology finds easy application in food traceability, where each actor of the supply chain securely shares labelled data points. Beyond improving traceability, blockchain technology could also help identify inefficiencies, track frauds, as well as revolutionize the pricing mechanism by providing more transparency

• IBM’s Food Trust network, a private & permissioned blockchain platform, enables trusted transactions throughout the entire food supply chain with a users list that includes Nestle, Unilever, Walmart, and Carrefour.

Next-Gen Packaging – The Tech

Bioplastics to clean up packaging

Plastic used in food packaging is a growing concern as people realize the impact of single-use plastic on the environment. Among new solutions is the use of so-called “bioplastics” which are generally made of either carbohydrate-rich plants (e.g. corn, sugar cane), sugar derivatives (e.g. cellulose, starch), non-edible by-products of food production (e.g. corn stover, straw, bagasse), or organic food waste.

• Today bioplastics represent less than 1% of the yearly 359mn tons of plastic.

Bio-based, biodegradable, or both

Bio-based plastics are not necessarily biodegradable. Bioplastics can be classified into 3 categories: bio-based & non-biodegradable usually made from bioethanol (e.g. bio-based PET, PE or PP), fossil-based biodegradable usually combined with starch (e.g. PBAT, PCL) or both bio-based & biodegradable (e.g. PLA, PHA. PBS).

• Biodegradability of bioplastic happens when microorganisms present in the environ - ment decompose the material into natural substances (e.g. water, compost, CO2).
• In 2019, 1.2mn (55.5% of total bioplastics produced) were biodegradable.

Active & intelligent packaging on the rise

Active packaging refers to packages that, in addition to contain and protect products, do also provide active functions such as sensing and monitoring food attributes and extending shelf-life. Active components include for instance: oxygen scavengers (preventing oxidation by absorbing oxygen), antimicrobials (prevent food deteriora - tion by stopping the growth of microorganisms), antioxidants (slowing down oxida - tion), or advanced time-temperature monitors.

• Early adopters include U.K.’s supermarket chain Morrison who recently introduced an antibacterial trolley bag (reusable shopping bag).

Players – List Of Relevant Pure* Players In The Industries

Catalysts

• Wider acceptance. All advanced technologies have a steepening acceptance curve, as pioneers are followed by the masses. Early players able to establish brand recognition will reap the benefits.
• Decreasing skilled workforce. Skilled labor scarcity is affecting the agricultural industry in a way that accelerates the transition towards more automation & efficiency.
• Product scalability. Partnerships or M&A with major food and beverage diversified conglomerates will allow smaller, pioneering companies to increase their production, reduce costs and expand markets.
   

Risks

• Health and safety. The lack of long-term studies demonstrating the safety and health benefit balance can represent a limit for wide adoption of advanced technologies across the whole industry.
• Standardization and interoperability. The diversity of solutions and the lack of  standardization might hamper the adoption of innovative farming technologies with traditional farmers being lost in all the new tech.
• Regulation. Regulators have to thread cautiously, and could limit the development of the markets for new technologies until they prove their safety for the consumer.