In my previous article, I covered the status of food waste and sustainable food production in the Nordics. Now I’m looking into areas with potential for improvements and the digital solutions that can enable the transition towards sustainability in the food industry.
Statistics for the Nordics show that the waste at the production stage of the food supply chain is the second highest after the food waste by the consumer at the end of the supply chain. To reduce food waste, we need to improve the sustainability of food production businesses, and also improve sustainability of operations in retailer and consumer food services.
Improving sustainability of agriculture and aquaculture
Precision agriculture, livestock management, and fish farming can answer the multidimensional challenges of the food industry in the Nordics. These technologies can let us meet the growing demand for food, reduce waste, improve quality, and ensure sustainability in production. At the same time, they allow us to take a more resource efficient approach to food production and reduce the carbon and water footprints of the food industry.
For example, in open sea fish farming, digital technologies such as IoT and AI can improve the sustainability of the operations by optimizing feeding and thereby reducing the impact on the environment.
- Precise individual monitoring of fish with Industry 4.0 and AI solutions can result in early detection of stress or discomfort in the fish and reduce the fish mortality rate. Better management of water parameters and filtering by using sensors can create a more controlled environment and optimize energy consumption. On the other extreme of the fish farming spectrum, in-land recirculating aquaculture systems (RAS) may be the future of a more sustainable and resilient fish farming industry, and it relies heavily on digital technologies.
- Precision agriculture. In agriculture, managing soil fertility is among the essential criteria for crop yield and quality, next to water management and seed quality. Remote sensing of the environment and soil parameters through IoT, wireless connectivity, and space-borne satellite imagery can result in better management of moisture and the use of Nitrogen fertilizers to improve crop production and environmental conditions. It contributes to better control of the interaction with the environment and more sustainable nitrogen management, and it can also enhance farmers’ financial situation and reduce wastage. Technologies like AI can provide a more science based decision support system for farmers and let them employ a more predictive than reactive approach to environment changes. Agriculture 4.0 empowered by Industry 4.0 and 5.0 technologies are already being deployed at scale. Recently, Cognizant designed and deployed such platforms at scale for Monsanto in Southern Europe, which significantly impacted saving water and improving yield.
- Livestock management. In the livestock business, the management of livestock manure is critical to reducing nitrogen pollution of the environment. An integrated approach to agriculture and livestock can be a solution for both industries. By leveraging IoT and digital technologies, it is possible to manage and separate manure and apply it to crops at appropriate levels. Providing guidance and knowledge to farmers to train them on best practices can also improve farming practices and reduce the environmental impact of livestock. Cognizant has deployed such solutions for a dairy farm corporation in Western Europe to improve their decision making and production quality.
Reducing food waste at retail stores and guiding consumers
It is essential that supermarkets and retailers understand the causes of food waste. Implementing digital solutions to measure and track waste in their warehouses, operations, and in the stores, combined with closely observing and analyzing consumer behavior, can unlock opportunities to better plan, place, and promote goods in the stores:
- Avoiding overstocking. For example, overstocking shelves commonly results in damaged packaging, spoilt fruit and vegetables, or passing fish and meat expiration dates. Overstocking in warehouses or shelves is usually due to difficulties in forecasting consumer demand. Overstocking can also result in unnecessary promotions, which motivates consumers to buy more or pushes supermarkets to sell larger quantities of food in bulk to move stock quickly. Both of them result in potentially more waste in households. IoT and AI, paired with studying consumer behavior and shopping patterns, can help retailers collect and analyze waste information, achieve better stock planning, and seamlessly guide consumers. This highlights the importance of systems thinking rather than focusing on short-term planning.
- Better packaging. Better packaging for better food preservation and presentation combined with showing the food labels and nutrient information on top of the package (instead of at the back) can help the consumer adopt more sustainable shopping behavior. In this area, AI and data analytics can help retailers identify the balance point between sustainability metrics and financial benefits.
- Improving cold chains. Optimizing and improving the cold chain and in-store fridges are other areas where digitalization can reduce waste. Cold chain and transporting chilled food often have minimal margin of error. Unforeseen technical problems in transportation or temperature variances between the front and back of the fridge shelves may result in a large amount of food waste. These risks can be mitigated by employing IoT technologies, predictive maintenance, and automation of fridge control systems. Recently, Cognizant helped a large American retail store deploy such a solution in their cold chain to improve their sustainability and profit significantly.
- Smarter labeling. Another area to consider is labeling, where printing the optimum in-store preservation temperature and better tracking of goods' expiration date through digital solutions can guide the supermarket crew in shelf planning. Also, printing the carbon or water footprint of the product on the label may improve consumer shopping habits.
Improving sustainability in the food industry and reducing waste can go hand in hand. However, achieving this with small scale and incremental measures will not be feasible in the short timeline ahead of us until 2030 and 2050 with the environmental challenges at hand. A more holistic approach to the food supply chain and its stakeholders is necessary to succeed in the sustainability journey. Putting more emphasis on creating an ecosystem of partners, and enhancing supply chain data collection and information management are essential in achieving SDG goals. It is crucial to consider the whole business model and analyze it across its value chains and actors to design a sustainability transformation journey.
The food industry in the Nordics should change the narrative from producing a higher quantity of food to producing higher quality food at a higher value – and the keyword is systems thinking.
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