The Quintessential Food Value Chain

According to the United Nations Environment Programme’s (UNEP’s) Food Waste Index Report 2021, people globally waste 1 billion tons of food each year. A staggering one-third of all food produced globally is lost or wasted. Food supply chains are complex and opaque networks involving various stakeholders such as farmers, government machinery, retailers, logistics providers, etc. Moreover, external factors such as climate change, price inflation, Covid and the Ukraine war are creating further strain on the global food value chain. These global disruptions are reinforcing the need for Sustainable and Resilient Food Chains. In lieu of this, the ‘Quintessential’ Food Value Chain urgently needs an OVERHAUL, which should be ably supported by new age tech deployment, adoption of sustainable practices & innovative approaches to reduce wastages and a collaborative spirit to drive holistic growth. Aspects such as streamlining of processes, improvements in cold chain infrastructure, complying with regulatory standards would help in redefining the overall food supply chain andmake it READY to serve the global markets.

A recent Press Information Bureau release stated that India’s agriculture sector has been witnessing robust growth with an average annual growth rate of 4.6% over the last six years. This has enabled agriculture and allied activities sector to contribute significantly towards country’s overall growth, development, and food security. Further in recent years, the country has emerged as the net exporter of agricultural products, with exports in 2021-22 touching a record US$ 50.2 billion.

While these stats offer much to cheer about… there are myriad challenges on the way to achieve the ultimate vision of achieving an agile, adaptive, and efficient food supply chain. A well-developed food processing sector with improved infrastructure like cold storage and better logistics can help the country in not only achieving the stated vision, but will also result in reducing wastage, improving value addition, ensuring better farmers' returns, promoting employment, and increasing export earnings. 

Initiatives like the National Agriculture Market (eNAM) and the Promotion of FPOs formation have been introduced to strengthen the agricultural market. With the interventions including Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), PM Formalisation of Micro food processing Enterprises (PMFME), production linked incentives (PLI), etc., attempts have been made to boost the food processing industries to harness its linkages with the agriculture sector. 

Ministry of Food Processing Industries (MoFPI), through its schemes, is helping to strengthen food processing/ preservation infrastructure with efficient supply chain across the country and thereby reducing gap between production and processing capacity & post-harvest losses. The Ministry is also implementing a Scheme for Integrated Cold Chain, Value Addition and Preservation Infrastructure as one of the component of Pradhan Mantri Kisan Sampada Yojana with the objective of reducing post-harvest losses of horticulture and non-horticulture produce and providing remunerative price to farmers for their produce.

As per the Economic Survey 2022- 23, to facilitate the unfettered growth of the food processing sector, there is a continuous need for extensive investment in cold chain infrastructure and address logistical challenges. In fact, the NITI Aayog Strategy for New India also identifies the lack of adequate and efficient cold chain infrastructure as a critical supply-side bottleneck that leads to massive post-harvest losses (mostly of perishables) estimated at ?92,561 crore annually. The uneven geographic distribution of cold storage infrastructure also contributes to regional-level disparities.

During a recent event, Shri Manoj Ahuja, Secretary, Department of Agriculture and Farmers Welfare, said, “Ministry of Agriculture recognizes the importance of the cold chain industry in ensuring food safety, reducing food waste, and increasing the shelf life of perishable products and ministry has set up an extensive outlay of policies and programs to give strength to this sector.

Technological innovation is crucial for the growth and development of the Indian Cold Chain industry. With the advent of advanced refrigeration and cooling systems, industry is now able to store and transport goods at much lower temperatures, which helps to extend the shelf life of perishable products. This has led to an increase in the export of perishable goods from India, as the products can now reach international markets in better condition.”

Dr. Abhilaksh Likhi, Additional Secretary (DA&FW), said, “The Indian Cold Chain industry is expected to experience significant growth in the coming years. The increasing demand for perishable goods such as fruits, vegetables, and meat products, as well as the rise in e-commerce and online grocery sales, are driving this growth. As the demand for these goods continues to grow in India, the government recognizes the need to support the development of the cold chain industry in order to ensure food security and public health.”

In the management of food supply chains, criteria including the incoming quality of materials, processing methodology, storage conditions, outgoing quality, and much more must be documented at each link in the chain. Synchronizing and sharing this information among all of the parties along the chain is critical for enabling lot traceability, collaborative coordination and optimization of operations, product consistency and quality management, regulatory compliance, and ultimately, customer safety and satisfaction. Industry experts in this sector have been vocal about the challenges being faced to streamline their supply chain network and have been taking innovative measures to strengthen FOOD supply chain network in the country aimed at reducing wastage on the go and delivering FRESH produce to their end consumers.

Here’s capturing the developmental landscape and strategies to enhance the logistics infrastructure…

WASTE MITIGATION STRATEGIES – A MUST FOR SURVIVAL

The Food Value Chain has been marred with one of the biggest constraints in its growth – HUGE WASTAGES. Globally, around 14% of food produced is lost between harvest and retail, while an estimated 17% of total global food production is wasted (11% in households, 5% in the food service and 2% in retail), according to stats by UN Food and Agriculture Organization (FAO). Forward-looking companies are constantly addressing this challenge through innovative measures.

Somnath Chatterjee, Executive Vice President & Head of Procurement and Logistics, ITC Foods Division, elaborates, “Forward-looking companies are addressing the challenge of food wastage by focusing on more efficient and sustainable production processes, utilizing more data-driven solutions to optimize, and forecast supply chains, and developing innovative retail solutions to reduce food wastage. Companies are also investing in conservation technology, investing in education, and training initiatives that promote food waste prevention, and collaborating with local markets and farmers to reduce waste.

Additionally, companies can implement incentives to promote food donations, source or produce products with higher nutritional value and longer shelf life, or use non-toxic packaging materials to extend the shelf life of products.”

Abhishek Joshi, Country Lead - Ag-Business & Supply Chains, Transform Rural India, states, “The key differentiation is to clearly identify two distinct areas for addressing this, without which any strategy or operational intervention within the entire supply chain would be meaningless. These are “food loss” & food waste”. Perhaps they appear similar, they are not. Food loss is lack of planning of supply & demand vectors, non-directed efforts in mitigating risks & misaligned production feeding the downstream channels – inventories, warehousing, channel alignment and fulfilment. At the composite upstream system, food waste majorly, is at consumers’ and channels’ level, resulting from misaligned upstream plays.

Overstocking of inventory, non-directed inventories to identified channels, packaging-pack- mixing with lots over or its under availability at shelfs, better transport configurations, seasonality pull strategies, predictive forecasting not meeting or over exceeding demand at retailers’ end and timely marketing or directed promotional priorities. For the composite downstream system. concurrently for both, Data visibility is important.”

He expresses that the highperformance companies with a good product mix of perishables & expired products for food consumption are able to sequester integrated efforts across all nodes of their supply chain system. Some measures are interlining the ‘origin source’ of forecasting, planning and procurement, outlining key inventory standards for optimized efficiency, increasing digital adoption across the curve & investing in technologies where efficiencies are shorting performances, increasing visibility for both synchronous & asynchronous nodes, collaboration beginning from suppliers-suppliers to customers-customers, adaptive packaging with transportation and fulfilment as key fulcrums ‘the product line / SKU density’ mix, as we say & NOT solely on center of gravity of distribution priorities for omni channels. The key aspect however, which has differentiated these high-performance organizations to reduce both ‘loss & waste’, essentially lies in collaborative efforts of all partners in their supply chain system.

According to Harish Kumar, Director – Supply Chain, House of Spices India, most companies in the food & beverages sector are addressing the challenge of food wastage through various strategies and initiatives. Some key approaches include:

Improving Supply Chain Visibility: Enhancing visibility across the supply chain is crucial for identifying areas of waste and implementing targeted solutions. Companies are utilizing advanced technologies to track and monitor food products throughout the supply chain. This enables better inventory management, reduces losses due to spoilage, and facilitates real-time decision-making.

Cold Chain Management: Maintaining proper temperature control throughout the cold chain is crucial to prevent food spoilage and extend shelf life. Companies are investing in advanced refrigeration technologies, cold storage facilities, and transportation systems to ensure optimal temperature conditions and reduce food waste associated with inadequate cold chain infrastructure.

Product and Packaging Innovations: Companies are investing in research and development to develop innovative products and packaging solutions that minimize waste. This includes techniques like modified atmosphere packaging, intelligent packaging, and compostable materials that extend shelf life, reduce spoilage, and enhance overall sustainability.

Collaborative Partnerships: Many companies are forging partnerships and collaborations across the food value chain to address wastage collectively. This involves close coordination between farmers, suppliers, manufacturers, distributors, retailers, and even non-profit organizations. By sharing information, resources, and best practices, these collaborations can identify inefficiencies, streamline processes, and reduce overall food waste.

Consumer Education and Awareness: Companies & government both recognize the importance of consumer behaviour in minimizing food waste. Examples like the campaign of "Love Food Hate Waste" initiated by the UK's Waste and Resources Action Programme (WRAP) and "Save Food, Share Food" Campaign by Feeding India. They invest in educational campaigns and initiatives to raise awareness about the issue and provide practical tips to consumers on reducing waste at home, proper food storage, etc.

PITFALLS ON THE WAY…

There are several pressing concerns that companies are facing in managing their supply chain, deciphers Somnath Chatterjee. Some of the most common ones include:

Supply Chain Disruptions: One of the biggest challenges companies face is supply chain disruptions, such as natural disasters, pandemics, trade disputes, and transportation issues. These disruptions can impact the entire supply chain and can result in delayed or missed deliveries, increased costs, and loss of revenue.

Managing inventory: Companies must strike a balance between holding enough inventory to meet customer demand and controlling inventory costs, such as storage and obsolescence. Accurately forecasting demand and effectively managing inventory levels is a key challenge facing companies.

Supplier management: Companies must ensure that their suppliers are reliable and ethical. They must monitor suppliers for quality, delivery performance, and financial viability. The challenge is to find suppliers that meet these criteria and to maintain good relationships with them.

Cost pressures: Companies are under pressure to reduce costs while maintaining high-quality products and services. They must find ways to reduce costs across the entire supply chain, including sourcing, transportation, and inventory management.

Managing complexity: Many companies have complex supply chains that span multiple countries and involve numerous partners and vendors. Managing this complexity, while maintaining visibility and control, is a significant challenge for companies.

Overall, managing the supply chain is a complex and challenging task for companies. Companies must adapt to changes in the market and maintain flexibility, while also ensuring that they meet customer demands and remain profitable.

Harish Kumar adds that in managing the supply chain in the food industry, companies face several challenges that impact their operations and overall performance. Here are some of the most significant challenges:

Food Safety and Quality: Ensuring food safety, following regulatory compliance and maintaining high quality standards is a critical concern for companies. They must adhere to strict regulations and standards to prevent contamination, maintain product integrity, and safeguard consumer health. Monitoring and managing food safety risks throughout the supply chain, including during production, transportation, and storage, is a top priority.

Supply Chain Complexity: The food supply chain is often complex, involving multiple stakeholders, diverse products, and global distribution networks. Lack of end-to-end visibility hampers efficient decision-making and increases the risk of disruptions.

Demand Volatility and Forecasting: The food industry is subject to demand volatility influenced by changing consumer preferences, seasonal variations, and unforeseen events such as natural disasters or pandemics. Accurate demand forecasting becomes challenging, leading to inefficiencies such as overstocking or stockouts.

Cost Pressures and Margin Optimization: Cost management is a constant concern for companies operating in the food industry. Fluctuating raw material prices, transportation costs, energy expenses, and labour challenges can impact profit margins.

Sustainability and Environmental Impact: Growing concerns about sustainability and environmental impact drive companies to address issues like greenhouse gas emissions, water usage, waste management, and responsible sourcing practices. Balancing economic viability with sustainable practices is a key challenge in managing the food supply chain.

Supplier Risk Assessment: Maintaining a reliable and resilient supplier base is crucial for companies in the food industry. Supplier selection, qualification, and performance management are essential to ensure consistent product quality, on-time delivery, and continuity of supply. Companies actively assess and mitigate risks related to supplier reliability, geopolitical issues, natural disasters, and other potential disruptions.

INNOVATIVE PRACTICES TO MANAGE FOOD SUPPLY CHAIN

Large companies often implement innovative practices in managing their supply chains to increase efficiency, reduce costs, and improve the overall performance of their business. Overall, the use of innovative practices in managing supply chains enables large companies to gain a competitive advantage in the marketplace, while also improving their sustainability and resilience in the face of ongoing challenges and disruptions. Some innovative practices that large companies follow in managing their supply chains, as offered by Somnath Chatterjee, include:

• Implementing real-time tracking and monitoring of inventory levels and shipments using advanced technologies such as RFID, GPS, and IoT
• Using predictive analytics and machine learning algorithms to forecast demand and optimize inventory levels and distribution patterns
• Collaborating with suppliers and distributors to share information and improve visibility across the supply chain
• Adopting sustainable and environmentally friendly practices such as using renewable energy, reducing waste, and implementing reverse logistics
• Establishing agile and flexible supply chain models that can quickly respond to changes in market demand, disruptions in the supply chain, and new opportunities
• Investing in automation and robotics to increase efficiency and accuracy in the supply chain, especially in areas such as warehousing and transportation 
• Implementing blockchain technology to improve supply chain transparency, traceability, and security, making it easier to track products and prevent counterfeits.

To address the concerns in managing the supply chain in the food industry and promote more efficient and effective operations, companies have implemented various innovative practices. Here are some examples presented by Harish Kumar:

Supply Chain Digitization and Integration: Digital transformation initiatives involve integrating disparate systems, applications, and data sources to achieve end-to-end visibility and streamline processes. This includes implementing Enterprise Resource Planning (ERP) systems, cloud-based platforms, and supply chain management software to enable seamless information flow and collaboration.

Supplier Collaboration and Risk Management: Effective supplier collaboration is crucial to managing risks in the supply chain.

Companies engage in proactive supplier relationship management, including regular communication, joint planning, and risk mitigation strategies. Supplier assessment programs help ensure compliance, quality, and reliability.

Last-Mile Delivery Innovations: Last mile delivery is a critical aspect of the food supply chain, and companies are exploring innovative solutions to improve efficiency and customer experience. This includes route optimization algorithms, delivery drones, lockers, and crowd-shipping models that leverage the sharing economy.

Robotics and Automation: Robotics and automation technologies are employed to streamline processes, reduce labor-intensive tasks, and improve operational efficiency. Automated systems can handle tasks such as sorting, picking, packing, and palletizing, leading to faster order fulfilment and reduced errors. India is still catching up on this trend and there’s a long way to go.

Advanced Data Analytics and Predictive Modelling: Leveraging data analytics, machine learning, and predictive modelling techniques can provide valuable insights for demand forecasting, inventory optimization, and risk management. Companies analyze historical data, market trends, and external factors to make informed decisions and mitigate supply chain uncertainties.

ENHANCING DEMAND PLANNING AND FORECASTING

The latency of demand planning & forecasting has predominantly now covered with the rapid adoption of digital tools and emerging ML/AI embedded standard definitions of such digital products. According to Abhishek Joshi, the assimilated technology is enabling to overcome any planning elasticity, which could have earlier impacted the synchronization of processes, facilitating companies to reduce risks, optimize both – information & physical flow of products & services envelope – meeting customers’ end requirements. However, despite these trends, most organizations continue to grapple with meaningful decision-making insights. One aspect of that is proliferation of ‘fad techs’, which do not necessarily integrate or speak easy to each other when adapted to larger aspect of whether they have been carefully deployed to address any of the pertinent challenges, which the organization struggles to respond.

“The answer is not simple, however enhancement or value earning pivot purely from system and processes standpoint can only be secured when organizations are acutely aware of their process strengths and weaknesses. The balance of efficiency, optimized flows, increased visibility, predictive and prescriptive analytics for demand analysis, sales & operations planning, forecasting accuracy with visibility to shifting trends in demands, consumer choices and channels to inventory management & fulfilment have to be balanced to ensure any digital adoption is cost effective, reinforces, and enhances value and is able to differentiate the competitive value both for its suppliers and its customers. The choice of evaluation is critical, the objectivity of changing landscape and dynamics of linear and omni channels is critical. Above all, customer preferences, serve cost to customer, cost of change management, scale up of the adopted tech besides other aspects of redundancy by exercising investments in such technologies is the most critical aspect when planning to enhance functions. Organizations would have to layer these up and see if automation is for automation’s sake justifies for organizational long-term objectives without operational supply chain systems’ dilution,” elucidates Abhishek Joshi.

There are several ways companies can work towards enhancing demand planning and forecasting, according to Somnath Chatterjee. These are:

Collect and analyze data: Good data is key to accurate forecasting. Companies should collect historical sales data, customer orders, and market trends from various sources and use analytics tools to gain insights into how different factors affect demand.

Improve forecasting methods: Companies can use statistical models and machine learning algorithms to develop more accurate forecasting models. They can also use scenario planning to evaluate the impact of changes in economic conditions or other factors on demand.

Increase collaboration: Companies should involve all relevant stakeholders, such as sales teams, marketing teams, and supply chain partners, in the forecasting process. Increased collaboration can help identify potential demand drivers and barriers, as well as improve the accuracy of forecasts.

Leverage technology: Many software solutions are available that can help with demand planning and forecasting, including enterprise resource planning (ERP) systems and demand planning software. These tools can help automate data analysis and forecasting tasks, freeing up resources for strategic planning.

Adapt to changes quickly: Demand planning and forecasting must be flexible enough to adjust to changing market conditions and customer preferences. Large companies must be prepared to modify their forecasting methods and strategies when necessary to stay ahead of the curve.

Additionally, various strategies are being explored and implemented in improving the forecast as most of the agricultural commodities are seasonal and availability is a concern. Harish Kumar captures few of them:

Demand Sensing Technologies: Implementing demand sensing technologies, such as point-of-sale (POS) data analysis, social media monitoring, and web analytics, enables companies to capture real-time demand signals. These technologies provide more accurate and timely information about changing customer preferences and market dynamics, improving demand forecasting accuracy.

Demand Segmentation: Segmenting customers based on their characteristics, behavior, and preferences helps in understanding their unique demand patterns. Companies can develop tailored forecasting models for different customer segments to account for variations in demand drivers and seasonality. This approach allows for more accurate and granular demand planning.

Statistical Forecasting and Predictive Analytics: Companies can leverage statistical forecasting techniques, such as time series analysis, regression analysis, and exponential smoothing, to predict future demand. Advanced predictive analytics models, including machine learning algorithms, can be used to incorporate a wide range of variables and generate more accurate demand forecasts.

Scenario Planning and Sensitivity Analysis: Companies can conduct scenario planning and sensitivity analysis to assess the impact of different scenarios on demand. This involves evaluating various factors such as changes in customer preferences, economic conditions, and market trends. By simulating different scenarios and their potential effects on demand, companies can develop contingency plans and better prepare for uncertain situations.

Sales and Operations Planning (S&OP): Implement a robust Sales and Operations Planning process that aligns sales forecasts with operational capabilities. This involves cross-functional collaboration, regular demand reviews, and scenario planning to align supply with expected demand levels.

Continuous Monitoring and Adjustments: Demand planning is an iterative process, and continuous monitoring is essential. Companies should regularly review and update forecasts based on actual demand, market dynamics, and changing customer behavior. By monitoring forecast accuracy, identifying forecast errors, and making necessary adjustments, companies can continuously improve their demand planning capabilities.

INVENTORY OPTIMIZATION IN FOOD VALUE CHAIN

Inventory optimization plays a crucial role in the food value chain by helping to ensure that the right amount of inventory is held at the right time. This can have a significant impact on costs, quality, and efficiency throughout the food value chain. Somnath Chatterjee elaborates, “Food products have a limited shelf life, and if they are not sold or consumed within a certain time frame, they may have to be discarded, resulting in waste. By optimizing inventory, businesses can minimize waste and reduce associated costs. Additionally, having the right amount of inventory on hand can prevent shortages and stockouts, which can lead to lost sales and dissatisfied customers.”

He adds that inventory optimization can also help improve quality and safety throughout the food value chain. By managing inventory levels, businesses can reduce the risk of products becoming outdated or deteriorating, which can affect taste, texture, and nutritional value. Proper inventory management can also help ensure that products are stored and transported safely, reducing the risk of contamination or spoilage. Overall, inventory optimization is essential for companies in the food value chain to minimize waste, ensure product quality and safety, and improve efficiency and profitability.

Adding further, Abhishek Joshi, states, “Without a doubt, inventory management is the most critical part of the planning process in any food value chain. The perishability of the product portfolios for any organization could make or break the entire gamut of its assiduously efforted customer positioning and fierce fencing of its own corporate competitiveness vis-à-vis its competitors, eroding entire trust & resulting in the lost value of sales. Overstocked and understocked inventory can play havoc to even best of laid plans for any supply chain, however for food supply chains, this adds to an already complicated layer of robust demand analysis with astute focus on forecast visibility along the entire curve from procurement to production to end fulfilment.”

Traditionally, primary wastage (muda) is better efficiently controlled, owing to lean-semi lean but effectively optimized production linear philosophies. However, research has shown that thelumpy part of it is the secondary food waste down the distribution chain at consolidation dock storage facilities to wholesalers, tertiary retailers, and customer channels where inventories have to be mandatorily controlled to be as closely remain in sync with planning cycles when serving consumer demands.

Using the right inventory system whether integrated as an enterprise platform or embedded into crucial stocking and distribution tier nodes becomes important. “The responsiveness agility is critical in food chains. The key variables prior to inventory optimization require synchronized processes layout focused on the foremost optimizing safety standards, efficiently driving processes to ensure that it reduces the chance of perishable products going to waste, products are on shelf when needed with effective batch and lot controls policies within desired fulfilment cycles with optimized packaging and transportation suite plugged appropriately to respective product lines and SKUs attributed to their useful life for lesser returns of near to expiry food products or avoiding inventory obsolescence. The inventory optimization engine relevant for inventories depending over this landscape could structure itself.

Key outcomes would be to ensure adapting digital processes to maintain desired equilibrium from demand side, standardizing differentiated strategies for inventory controls and management with enhanced visibility tier up & tier down distribution nodes for any changes or disruptions ensuring efficient working capital management tied up to inventories,” Abhishek Joshi adds.

According to Harish Kumar, there are some key aspects of inventory optimization:

Balancing Supply and Demand: Inventory optimization helps companies strike the right balance between supply and demand. By accurately forecasting demand and aligning it with production and procurement activities, companies can maintain optimal inventory levels. This prevents stockouts and excess inventory, reducing the risk of lost sales or wastage due to spoilage.

Minimizing Holding Costs: Holding excessive inventory ties up working capital and incurs costs such as storage, handling, and insurance. Conversely, insufficient inventory levels can result in increased order lead times, rush orders, and lost sales. Inventory optimization aims to minimize holding costs by ensuring inventory levels are optimized to meet customer demand while minimizing excess inventory.

Reducing Food Waste: Excess inventory can lead to increased food waste, especially in perishable food products. By optimizing inventory levels, companies can minimize the risk of products reaching their expiration dates before being sold. This reduces the amount of food waste generated throughout the food value chain, contributing to sustainability goals and minimizing financial losses.

Improving Supply Chain Efficiency: Inventory optimization enhances supply chain efficiency by reducing stockouts, improving order fulfilment rates, and streamlining replenishment processes. With optimal inventory levels, companies can respond more effectively to customer orders, reduce lead times, and improve overall supply chain responsiveness.

Enhancing Product Freshness and Quality: Proper inventory management ensures that food products are maintained in optimal conditions, preserving their freshness and quality. By avoiding overstocking and minimizing excess inventory, companies can reduce the likelihood of product spoilage, deterioration, or obsolescence. This, in turn, enhances customer satisfaction and reduces waste due to unsellable products.

Seasonal and Promotional Planning: Inventory optimization supports effective planning for seasonal variations and promotional activities. By analyzing historical data, customer demand patterns, and market trends, companies can align their inventory levels with expected demand fluctuations during peak seasons or promotional periods. This ensures the availability of products when demand is high, without excessive inventory during slower periods.

TECHNOLOGY FACILITATING THE FOOD SUPPLY CHAIN

According to a Deloitte study, technology is a key enabler disrupting the entire agri and food value chain. Technology adoption is being led by 1,000+ operating agri-tech start-ups in India. The entire agri-tech market size is estimated at ~Rs14 billion in 2020 vs. a potential ~Rs1687 billion, indicating a massive opportunity ahead. In fact, this year’s

Union Budget has clearly identified technology as the lever of change for effective decision making and planning. Furthermore, the Ministry of Agriculture & Farmers Welfare has commenced the work for creating Agristack in the country. In order to create Agristack, the department has finalized the core concept of “India Digital Ecosystem of Agriculture (IDEA)”, which lays down a framework for Agristack. Agristack is a federated structure and ownership of data is with the States only. This will enable agricultural value chain players take data-backed decisions and will also assist in serving the farming community efficiently.

Highlighting the crucial importance of technology, Somnath Chatterjee adds, “Technology is playing an increasingly important role in facilitating the food supply chain.” According to him, some of the ways in which technology is being used to improve the food supply chain include:

Farming: Technology is helping to increase agricultural productivity, reduce waste, and improve sustainability. For example, precision agriculture uses sensors and GPS to gather data on soil moisture, nutrient levels, and weather conditions, allowing farmers to optimize their use of resources.

Transportation: Technology is making it easier and more efficient to transport food from farms to consumers. For example, refrigerated trucks and containers help to maintain the quality and freshness of perishable foods during transport.

Warehousing: Technology is helping to improve the management of food inventories and reduce waste. For example, warehouse management systems can track inventory levels and expiration dates, making it easier to rotate stock and prevent spoilage.

Traceability: Technology is improving the ability of food companies to trace the movement of food from farm to table. For example, blockchain technology can be used to create an immutable record of every transaction in the food supply chain, making it easier to trace the source of foodborne illnesses and other issues.

According to Abhishek Joshi, adoption of technology is creating wonders in the modern food supply chain. It is perhaps one of the best sectors, immediately after pharma, which has not only evolved upon adding to its supply chain maturity standards but also been at the forefront in not only in leveraging but frequently seen deploying unique high-end technology driven models for its customers. With customers keen not only about the safety, quality and batch life of the products anymore but are demanding to know the origin source of raw materials in processed foods, from sourced ethically to processed hygienically, the traceability in modern food supply chains is now given. The technological advancements have quelled this all must know appetite of customers to not only increased essence of visibility, but also given standards of consumption for food chains, which further brand this as part of its overall customer experience and product-services value.

The food supply chains internally also are shifting from earlier track & trace to now monitoring real-time data by harnessing powers of IoT (sensors) for efficient monitoring and control of its inventories in flow to retail shelves. Tracking location of goods, ‘in-transit motion’ by monitoring humidity, temperatures, cold chain transportation at adequate levels by setting up supply chain control towers for both cross border or domestic or even last mile fresh deliveries, the digital tools through integrated inventory, warehouse, transport and order fulfilment systems are constantly meeting service efficiencies, resiliency, responsiveness and sustainability of business objectives.

One of the most promising technology, which has recently seen enormous interest is ‘blockchain’ pivoted by IBM Food Trust & Walmart Global tech in food supply chains. IBM has deployed this emerging platform under its ‘farmer connect’ program for coffee beans, enabling ‘digital trust platform on blockchain’ for consumers that is ‘sustainably grown & responsibly sourced’. The platform, hence, is able to leverage the platform on counts of proof of origin with reliable trust-based documentation among all stakeholders in the supply chain, enhancing brand equity of suppliers with consumer trust by reducing fraud & waste. After partnering with IBM to create a food traceability system based on the Hyperledger Fabric (a project hosted by the Linux Foundation), Walmart could trace the mangoes stored in its US stores within 2.2 seconds, literally, the speed of thought!

Creating accountability and ensuring transparency across the food supply chain is a necessity rather than an afterthought, especially with food contamination being rampant across the globe. Blockchain tech can effectively help trace the contaminated product (even if it is just an ingredient) back to its source and curb the further spread of foodborne illnesses. Also, granular information about food items derived from Blockchain supply chain solutions removes the guesswork and helps merchants make decisions on how they handle the goods such as getting the accurate shelf-life data of fruits to halt discarding food that is still fresh, a Walmart news release stated.

ENHANCING SUSTAINABILITY IN FOOD VALUE CHAIN

During a recent Deloitte Food Summit, Paul Polman, Co-founder and Co-chair of IMAGINE, and former global CEO of Unilever, was quoted as saying, “Our global system is broken. We are realizing that we can’t have infinite growth on a finite planet, and the costs of not acting become higher than the costs of acting.” We need to move to a net-positive food system and create a reliable food value chain for the long term. That means giving back more than we take from our planetary food system, making things better than we found them.

Now is the time to do it. “This is the decade of action,” continued Paul. “And the agricultural value chain is the biggest opportunity we have.” Creating a regenerative food system can createa financial benefit of US$4 trillion andit contributes to solving about 30% of global climate issues. But we must realize that it is a leadership issue. “We need political and industry leaders to show courage to set real targets and work in broad partnerships that may, potentially, uncover inconvenient truths.”

Food and FMCG (fast-moving consumer goods) industries together produce more than one-third of global emissions, which mainly come from their upstream supply chains. A recent study finds that – combined – China, India, the US and Brazil generate just over 44% of the global supply-related emissions from food waste and 38% of the global wastemanagement- related emissions. A WEF study highlights that more than 70% of the food industry’s emission sources come from land use, more specifically by agriculture and deforestation. With this large carbon footprint, decarbonizing value chains in these sectors is a gamechanger for achieving the netzero goal. A shift to a productive and regenerative approach to restoring soil health and fertility is an emerging opportunity, expected to generate $1.14 trillion of annual business opportunities by 2030.

Coca?Cola India, in line with its efforts towards creating an Atmanirbhar Bharat, has announced a decade of successful implementation of its Project Unnati. The project aims to support the Indian agri-ecosystem by enhancing farming efficiency, strengthening forward linkages, and building foodprocessing capacity in the country. The projects also facilitate farmers’ access to enabling infrastructure via high-yielding planting material and Good Agriculture Practices (GAPS) such as ultra-high-density plantation (UHDP) which involves drip irrigation, on-site training, and farm supplement support. These new technologies lead to a substantial increase in quality, productivity, and profitability per unit of land which further makes fruit cultivation lucrative. Rajesh Ayapilla, Director-CSR and Sustainability for India and Southwest Asia (INSWA),

The Coca?Cola Company, said, “Farmers are the backbone of the Indian agrarian economy. Through project Unnati, our aim has been to elevate and enhance the livelihoods of these farmers by not only enabling them with advanced horticulture solutions, but also empowering them to substantially increase their incomes. This is a step in line with the Government of India’s vision towards AtmaNirbhar Bharat, making the agrarian economy self-reliant.”

According to Somnath Chatterjee, there are several ways companies can enhance sustainability in the food value chain. Here are some suggestions:

Reduce food waste: Companies can reduce food waste by implementing better storage practices, using technology to track inventory and expiration dates, and donating surplus food to food banks or charities.

Improve packaging: Companies can redesign their packaging to minimize waste and choose compostable or recyclable materials.

Use sustainable sourcing: Companies can ensure that the food they source is sustainably produced by using environmentally friendly farming practices, reducing pesticide and fertilizer use, and supporting local farmers.

Implement energy-efficient practices: Companies can reduce their carbon footprint by using renewable energy sources, improving transportation efficiency, and investing in energy efficient technologies.

Engage in community initiatives: Companies can engage with local communities to build awareness and support for sustainable practices and involve them in initiatives like community gardens and composting programs.

Embrace circular economy principles: Companies can aim to design and operate their food value chain according to circular economy principles by reducing waste and actively reusing or recycling materials wherever possible.

By implementing these practices, companies can enhance sustainability in their food value chain and contribute to a more sustainable world.

FAST SHIFTING FOOD SUPPLY CHAIN DYNAMICS

The future of the food supply chain is likely to be shaped by several factors such as changing consumer preferences, advances in technology, environmental concerns, and globalization. Here are some possible ways the food supply chain dynamic may change in the future, as enumerated by Somnath Chatterjee…

Increased focus on sustainability: Given the growing concern about the impact of food production on the environment, there may be a greater emphasis on sustainable practices and reducing waste throughout the supply chain.

Shift towards plant-based alternatives: With the increasing global demand for plant-based protein sources, it is likely that the food supply chain will adapt to cater to this trend. Consumers could see a rise in the availability of plant-based meat and dairy alternatives.

Adoption of technology: There will likely be an increased adoption of technology in agriculture and food production, for example, through the use of GPS tracking and data analytics to improve crop yields, or robotics and automation to increase efficiencies in food processing.

Greater demand for transparency: As consumers become more concerned with the origins of their food, the food supply chain may shift towards greater transparency and traceability, enabling consumers to make more informed choices about what they eat.

Overall, the food supply chain is likely to become more diverse, flexible, and responsive to changing consumer demands, while at the same time adopting more sustainable and efficient practices to help meet global food demand.

Harish Kumar believes that the food supply chain is expected to undergo several changes and trends in the future as the industry responds to evolving needs of the consumer. There will be focus on:

Shift to Local and Regional Sourcing: There will be a notable shift towards local and regional sourcing in the food supply chain. Companies will focus on shortening supply chains, supporting local farmers, and promoting sustainable agriculture practices. This trend is driven by consumer preferences for fresh, locally sourced products and the desire to reduce transportationrelated emissions.

Demand for Healthy and Functional Foods: The increasing focus on health and well-being will drive the demand for healthy and functional foods. This will impact the supply chain dynamics as companies’ source and produce ingredients that align with these preferences. Supply chains will need to adapt to handle specialized ingredients, certifications, and additional quality assurance measures.

E-commerce and Direct-to-Consumer Channels: The growth of e-commerce and direct-to-consumer channels will reshape the food supply chain. Companies will need to optimize their logistics and fulfilment capabilities to meet the demand for home delivery and online shopping. Last-mile delivery solutions, cold chain management, and packaging innovations will be critical to ensure product integrity and customer satisfaction.

Supply Chain Resilience and Risk Management: The COVID-19 pandemic highlighted the importance of supply chain resilience. Companies will continue to invest in risk management strategies, scenario planning, and diversification of suppliers to mitigate disruptions. The focus will be on building agility, flexibility, and redundancy into the supply chain to respond effectively to future disruptions and uncertainties.

SUPPLY CHAIN MEGATRENDS IN FOOD SECTOR

In the food sector, several supply chain megatrends are expected to shape the industry's future. These megatrends reflect the overarching shifts and developments that will have a significant impact on the food supply chain. Harish Kumar enlists some of the megatrends… 

Digital Transformation and Industry 4.0: The food supply chain will undergo significant digital transformation and embrace Industry 4.0 technologies. This includes the adoption of automation, robotics, artificial intelligence, Internet of Things (IoT), and data analytics. These technologies will enhance efficiency, visibility, traceability, and decision making throughout the supply chain.

Enhanced Traceability and Transparency: Increasing consumer demands for transparency will drive the need for enhanced traceability in the food supply chain. Blockchain technology and other traceability solutions will enable real-time tracking of products, ensuring visibility and accountability. This will enhance food safety, quality control, and consumer trust.

Customization and Personalization: Consumer demand for customized and personalized food products will drive supply chain megatrends. Companies will adapt their supply chains to accommodate flexible production processes, enabling customization based on individual preferences, dietary requirements, and health considerations. This trend will require agile supply chains capable of managing small-batch production and quick turnaround times.

Increased Emphasis on Sustainability: Sustainability will continue to be a driving force in the food supply chain. Companies will focus on reducing carbon emissions, minimizing food waste, implementing circular economy practices, and adopting environmentally friendly packaging solutions. Sustainable sourcing and ethical production practices will gain prominence as consumers demand greater transparency and accountability.

According to Somnath Chatterjee, there are several megatrends that are expected to impact the food sector supply chain. some of them are:

Sustainability: There is an increasing focus on sustainability throughout the food supply chain. Consumers are becoming more conscious of the environmental impact of their food choices and are demanding more sustainable products.

Traceability: The ability to trace products and ingredients throughout the supply chain is becoming more important, as consumers are increasingly concerned with food safety and quality. Advances in technology, such as blockchain, are making this easier to achieve.

Digitalization: The use of digital technologies in the food supply chain is expected to continue to grow, from automating manual processes to using data analytics to optimize operations.

Flexibility: The ability to adapt quickly to changes in demand or supply is becoming more important in today's fast-changing business environment. This requires a more agile and responsive supply chain.

Collaboration: Collaboration between different players in the supply chain, such as farmers, processors, retailers, and logistics providers, is becoming more important to improve efficiency and reduce waste.

ARE YOU READY FOR A NEW DAWN?

The Indian food and agriculture sector is at the cusp of a transformation and would require all value-chain members to act in tandem, along with government support to secure the future of food in India. India’s farms have been putting food on the table for India and the world for decades. Digital technologies could enhance production at every step, from high-quality agriculture inputs to world-class agriculture outputs. This could help create sustainable growth for the Indian farmer, boost economic fortunes in rural areas in a flourishing ecosystem, and benefit the entire economy, a McKinsey study stated.

“It may sound like a massive task but transforming the food system offers the opportunity to contribute to a better, healthier, and more sustainable world; to tap into new markets and profit opportunities; and to make an impact that matters. It is the time to be bold, brave, commercial, and take up the challenge together—as together is the way we can take major steps,” stated a Deloitte report.