Did you know that agriculture is the least digitized of all major industries, according to the McKinsey Global Institute’s Digitization Index? Luckily, over the last few years, technological solutions which are suitable for the agri food market (f.e. robotics, lab based meat/milk and novel farming) have undergone considerable development, providing agri food companies with ample opportunities to improve the way they produce, sell and manage their business. On this page, we zoom in on these developments in agri food technology and explain how agri food companies could benefit from them.
Although the agri food industry has been relatively late in incorporating technological innovations in their supply chains, agri food companies have caught up significantly in recent years. As a result, one can see technological innovation taking place at every level of the supply chain. From increasing production efficiency with the help of robotization to limiting their impact on the environment with advanced food processing technologies that ensure optimized resource consumption and agricultural output. The possibilities are endless. Companies that do not make an effort to optimize their supply chain with the help of technology run the risk of not keeping up with their competitors in the future.
In general, the technological developments within the agri food sector can be divided into 4 trends:
Technological innovation in the production process
To feed the growing population in the future, agri food companies have to find ways to create a more efficient production process. Through recent developments in robotization, automation, and precision agriculture, the agri food industry is increasingly more capable of beating these challenges and creating a safer and more secure way of producing, resulting in higher quality produce. For example: farm management systems.
Technological innovation driven by sustainability
Amongst players in the agri food industry, the realization has set in that to still be relevant in the future, they have to take action to create more sustainable production methods. As a result, new production technologies have arisen, helping agri food companies be less dependent on animal products and opening new ways to serve the vegetarian market. For example: cultured meat and lab milk, or vertical farming.
Technological innovation in the way business is done
As the world slowly but surely shifts to a more online-focused way of doing business, the agri food market cannot be left behind. Although this is somewhat of a complex case in the food industry due to products having to be cooled at any point in the logistics chain, more and more food retail companies are shifting their focus to online e-commerce solutions. The increased consumer demand for buying products online has led to more and more agri food companies looking for suitable technological solutions to keep up. As it requires a reinvention of how business is done, technology in e-commerce, warehousing, and transportation has improved significantly over the last few years. For example: automated warehousing.
Technological innovation in management
Whereas in the past C-level had to make important decisions about the company's future based on experience and gut feeling, nowadays advanced reporting technologies provide management teams with up-to-date data about trends and developments within the agri food market. This does not only concerns external data sources. Nowadays there is also a lot of internal data available in agri food companies. Levering both the available data on the market as well as your internal data has become a lot easier, providing C-level with the opportunity to quickly analyze new target markets, perform competitor analysis, and benchmark their performance. For example: market monitoring dashboards.
The future of the agri food industry depends on the proper adoption of smart technological solutions in supply chains. Technology in agri food is all about leveraging data to your advantage. Using data to create more efficient production processes, organize smoother transportation and warehousing flows, and make better business decisions. If you don’t do it, your competition will.
But how can you start levering data to your advantage? At Annual Insight, we’ve developed the following model which helps you to make your analyses more data-driven:
Information gathering and reporting - The first phase is to gather, organize and be able to report relevant information.
Analyze information - Here we look at trends and insights that can be extracted from the reports. For example, why are sales lagging this month? This is where many companies limit themselves to internal numbers and miss the comparison with competitors.
Monitor KPIs - When you have a clear picture of which KPIs and figures are crucial for the company and the market, you then want to monitor them. The use of external data becomes necessary here, such as production and global import and export data.
Predict - In the next phase, organizations try to foresee how certain markets develop, such as the price of or demand for a certain product. Recognizing correlations provides insights that can be used to make predictions.
Market Determination - The final phase is primarily theoretical. In a data model, the behavior of market players is predicted on the basis of simulations. In this way, it is analyzed which activities, events or incentives can provide the desired outcome.