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The benefits of digitalisation. Sustainability challenges to tackle Food Losses.

Introduction

The issue of food loss is of high importance in the efforts to combat hunger, raise income and improve food security in the world’s poorest countries. According to FAO, Food Losses refer to a decrease in mass or nutritional quality of food originally intended for human consumption, a decrease which is usually caused by supply chain inefficiencies. Food that is discarded, more frequently within either the retail or the final consumption level, falls under the category of Food Waste.

Food losses have an impact on food security for poor people, on food quality and safety, on economic development and on the environment. The exact causes of food losses vary throughout the world and are very much dependent on the specific conditions and local situation in a given country. In broad terms, food losses will be influenced by crop production choices and patterns, internal infrastructure and capacity, marketing chains and channels for distribution, and consumer purchasing and food use practices. Irrespective of the level of economic development and maturity of systems in a country, food losses should be kept to a minimum. Food losses represent a waste of resources used in production such as land, water, energy and inputs. Producing food that will not be consumed leads to unnecessary CO2 emissions in addition to loss of economic value of the food produced.

In the following, we will observe some data about Food Losses, then we will highlight the need for digital solutions to reduce the amount of losses and finally we will present Wenda, an Italian startup supported by European investors that offers an Information Management Hub used by key Food&Beverage actors, which turns advanced supply chain tracking from cost centre into competitive edge, improving quality, logistics and sales.

Food Loss numbers

food-losses-pro-capita

Per capita food losses and waste, at consumption and pre-consumptions stages, 
in different regions (FAO).

According to FAO figures, roughly one third of the food produced in the world for human consumption every year gets lost or wasted across the Food supply chain, for a value of US$ 680 billion in industrialised Countries and US$ 310 billion in developing Countries. It is an enormous quantity, amounting to 1,3 billion tons of food. 58% of food produced is dissipated before it is delivered to consumers, and almost 20% of global Food Losses are due to cold chain issues or interruptions (the engine is shut off, logistical operators fail to fully comply with HACCP guidelines, drivers stop in areas exposed to sunlight, …).

Food Losses produce a large waste of resources such as water, land, energy, labour and capital: the total volume of water used each year to produce food that is lost or wasted (250km3) is equivalent to the annual flow of Russia’s Volga River, or three times the volume of Lake Geneva in the U.S.A. Similarly, 1.4 billion hectares of land – 28% of the world’s agricultural area – is used annually to produce food that is lost or wasted. Moreover, Food Losses produce unnecessary greenhouse gas emissions, contributing to global warming and the resultant climate change: in EU-27 emissions caused by Food Losses and Waste reach 170 million CO2eq/yr tons, equal to approximately 3% of total European emissions. 

In medium- and high-income Countries, food is wasted and lost mainly at later stages in the supply chain, while consumers’ behaviour plays a huge part: for instance, in Italy the amount of products left to rot in the field was equal to 1,4 million tons in 2013, about 3% of national agricultural production; Food Losses in the stage of industrial processing were equal to 2 million tons; Food Losses in the distribution chain were equal to 300.000 tons

In developing Countries, 40% of Food Losses occur in the early stages of the Food value chain, namely post-harvest and processing levels, and are caused by financial, managerial and technical constraints in harvesting techniques as well as storage and cooling facilities. Enhancing supply chains through direct support to farmers, investments in infrastructure, and the expansion of the Food&Beverage and of the packaging industries could help to make a difference. 

FAO’s SAVE FOOD study identifies the lack of coordination between actors in the supply chain as a key factor for Food Loss: farmer-buyer agreements, awareness campaigns among industries, logistical operators and consumers, dissemination of digital solutions for the Food chain monitoring are some of the recommended measures to decrease the amount of Food Losses. 

Here we will focus on the advanced supply chain tracking through digital services and solutions.

The benefits of digitalisation

One of the key elements to reduce Food Losses is the continuous improvement of supply chain efficiency: digital solutions for the logistical management in Food&Beverage supply chains enable a better demand/offer coordination, make transactions more efficient, enhance product traceability and ensure an advanced cold chain monitoring and the associated compliance with Food safety regulations. 

Beyond these considerations, given that a substantial part of Food Losses is caused by poor product-preservation conditions, limited Food traceability along the supply chain, and failure to meet best practices at the stage of logistical handling, companies tend to adopt digital solutions to monitor their products from the harvesting and processing stages up to delivery to the final consumer.

According to a study1, to this day the digital revolution intervenes in a major way to ensure food traceability, reducing wastage, boosting revenues and increasing process efficiency: 36% of agrifood companies, thanks to the implementation of digital solutions, has experienced reductions of time and costs connected to the processes of data collection, management and transmission.

In this scenario, we are seeing a steady growth of cold chains global value, which no later than 2022 will reach a total value of 271,3 bn US$, with a 7% CAGR , while up to 2020 250 bn US$ will be spent in IoT solutions for Food traceability, 40 of which in the single segment of traceability systems for logistics, with a 30% CAGR.

Another element to be considered is the generally insufficient access to traceability, quality and product-related data. Big industry players are going in this direction: for instance Maersk – the world’s largest container shipping company – selected Wenda as one of the 10 best startups that developed innovative technological solutions to tackle Food Losses In the following we will see what they consist of.

WENDA: Information Management Hub for the Food&Beverage supply chain

Wenda, an Italian startup backed by European investors, managed to note in advance the necessity for the application of digital services and solutions to reduce Food Losses, and created an Information Management Hub used by key Food&Beverage actors, which turns advanced supply chain tracking from cost centre into competitive edge, improving quality, logistics and sales.

It consists of a web platform that can support all Food&Beverage actors operating with perishable or sensitive products: data loggers are inserted into each box, pallet or container of any given shipment, in order to collect environmental data (geolocalisation, temperature, Food integrity); data are sent to the Wenda Information Management Hub, the web platform that aggregates, compares and processes them. Subsequently, you can follow in real time and from a single control point the product’s conditions via advanced integrity analytics embedded in the Hub, gaining knowledge of the hazard points in the distribution chain, ensuring the best product care and enhancing internal processes. 

In this way, you can have end-to-end supply chain visibility to ensure transparency, maximise products’ shelf life and increase efficiency: producers, distributors and retailers will be able to substantially reduce Food Losses, which today appear unacceptable.

As claimed by UNDP Administrator Achim Steiner: “In a world of seven billion people, set to grow to nine billion by 2050, wasting food makes no sense – economically, environmentally and ethically, aside from the cost implications, all the land, water, fertilizers and labour needed to grow that food is wasted – not to mention the generation of greenhouse gas emissions produced by food decomposing on landfill and the transport of food that is ultimately thrown away.”

To have further information, to know more about us or to schedule a demo of the Wenda Information Management Hub, we invite you to visit our website: https://www.wenda-it.com/.

  1.  Osservatorio Smart AgriFood – Coltiva dati. Raccogli valore. La trasformazione digitale dell’agroalimentare.