The recent rationing of french fries sales in Japan recently hit home the importance of food supply sustainability and resilience.
In February this year, fast food chains across Asia were directly hit by a global potato shortage, with several chains replacing or limiting the purchase of foods made with the tuber.
McDonald’s Japan even started rationing french fries due to “ongoing supply chain uncertainties” and “shipping problems”.
This supply crunch of just one food has cast the spotlight on other F&B vulnerabilities ranging from talent shortages, manufacturing delays, production stopgaps and many more pandemic-linked supply chain issues.
How can the Asia Pacific region tap digitalization to work around the risks and become more resilient going forward? Joseph Ryan, the co-founder of an F&B robotics and automation startup Hit Refresh, shared some ideas with DigiconAsia.
DigiconAsia: Could F&B businesses in South-east Asia/APAC have embraced digital transformation earlier to weather the pandemic better?
Joseph Ryan (JR): The F&B industry in SEA has been a late adopter to digital transformation, and the inefficiencies stemming from such a lack of innovation had led to widespread casualties during the COVID-19 pandemic. This is especially so for the massive group of small F&B operators comprising independent restaurants, standalone eateries, coffee shops, hawkers, street vendors and the like.
Many businesses feared the terms “innovation” and “digitalization”, which were associated with high costs, extensive research, testing and training to get right. However, they could have chosen many ready-to-use technologies that can be implemented immediately.
For small F&B vendors, this could be as simple as capitalizing on joining a food delivery platform to reach more customers, or adopting an e-wallet system to accelerate order times and enable contactless payments. These systems are quick to integrate, and often charged on a commission basis thus avoiding intimidating upfront investment.
Now that industries in the region have embrace digital transformation in one form or other, the right mindset is to treat it not as a destination but a continuous journey to remain relevant and effective. A digitally aware F&B operator will always have the tools to increase efficiencies over competitors that are less inclined, and this is not only a safety net during pandemic times, but also a competitive edge in a progressively more saturated marketplace.
DigiconAsia: Pandemic-driven vulnerabilities have highlighted the global need to reduce wastage, boost ESG and avert F&B supply chain bottlenecks altogether.
JR: Yes.It is vitally important to integrate meaningful technology purposefully to tackle the problems that lead to wastage, cause adverse environmental effects and inadvertently impact the supply chain.
As we develop greater scientific knowledge of how to care for fresh produce, technology can assist in creating optimum parameters to slow the deterioration of our food supply.
The use of sensor-based technology (IoT) can help businesses keep produce fresher for longer to eradicate wastage. Known as ‘paper-based electrical gas sensors’ (PEGS), they detect spoilage gases like ammonia and trimethylamine in meat and fish products.
The sensor data can be read on smartphones so that people can scan the packaging on their smartphone to see whether the food is safe to eat, thus replacing ‘best before dates’, which are often attributed with leading to unnecessary wastage/spoilage.
Less food waste will lead to fewer animals culled and fewer ingredients discarded.
DigiconAsia: How can F&B industries gain funding and support to be more future-ready?
JR: There is no better time for F&B businesses to adapt to the pandemic-era realities and protect themselves against future crises.
For funding of continual digitalization, F&B companies can obtain assistance from government agencies or industry organizations.
For example, in Singapore, Enterprise Singapore (ESG) has launched a multi-agency platform called FoodInnovate to support F&B businesses in creating and commercializing food products, to give them access to shared production facilities and networks with partners and accelerators.
There is also the Innovation Advisors Programme, which connects start-ups to work with industry veterans in areas like developing innovation strategies, new products and solutions, and getting connected to the right partners.
These initiatives can help the F&B and other industries to modernize and build resilience. Similarly, many digitalization funds and schemes in various countries are available. F&B industries can also take the initiative to propose public-private partnerships with governments, and also form self-help groups to pool resources and boost collaborations with other industries for support.
DigiconAsia: How can the region avert ‘french fries rationing’ episodes and other food shortages?
JR: There are no hard and fast rules, here are some immediately accessible suggestions:
- Source local produce
- Explore alternative proteins
- Get onto the online marketplace
The most obvious solution to overcome supply chain problems is to maximize the availability of local produce. In land-scarce countries, technology is now making vertical and rooftop farms a reality.
For alternative protein sources, the plant-based food industry has grown exponentially, increasing accessibility to a broad array of proteins that are all non-animal based, thus avoiding unnecessary animal culling and meat wastage.
The last suggestion involves more developing more efficient, resilient supply chains that are managed through analytics to predict and preempt demand-and-supply trends, leading to greater market responsiveness and rationing in case of trouble.
DigiconAsia thanks Joseph for sharing his insights with readers.
