Global food supply chains have recently come to the forefront of conversation as UK consumers were hit by restrictions on fruit and vegetable purchases at certain supermarkets. Caused by adverse weather conditions in Northern Africa and Southern Europe, big names such as Tesco, Morrisons, Aldi, Lidl, and more, have been paralysed by production and supply chain issues, leaving them with no choice but to ration certain products until shelves are restocked.
As the climate crisis worsens, there is every chance that retailers will experience similar situations in the future. As such, it will become increasingly critical for the entire supply chain ecosystem – from farmers, to suppliers and retailers – to move to more sustainable methods of food production.
The sustainability challenge
Retail is one of the largest industries with the biggest impacts on our lives. It accounts for 15% of global GDP and 15% of global jobs. At the same time, retail supply chains are responsible for a large part of the world’s GHG emissions (25%).
Data shows that up to 40% of the world’s food is lost or wasted every year, highlighting the importance of improved collaboration between retailers and food manufacturers. Especially as optimising the process could cut food loss by 50 to 70%.
Product disposal and food waste are significant issues in the retail sector. Stores are faced with the need to rid their stores of products that are unfit for consumption, past their expiration dates, or not wanted by their customers, hurting profitability and the environment.
That’s why implementing a better-connected farm-to-fork system and increasing traceability is key. An example of how this can be achieved is through equipping containers with IoT devices to track shipments and deliveries as enlisting IoT technologies at every stage of the food supply chain will bring relevant and impactful information.
Digitising for success
The speed at which retailers have had to digitise their sales and operations due to competitive pressure from ecommerce and the many changes the pandemic brought is at an all-time high. Alongside this, retailers are looking for more ways to cut down on waste, improve and streamline in-store experiences, and deliver higher quality services due to new sustainability laws, consumer demand for local/sustainable products, and general convenience.
By using IoT technologies to gain greater visibility into operations, retailers have access to the data they need to make informed, considered decisions. This might be around which items are selling particularly well and need to be replenished, which products need to be dynamically priced or promoted due to their use by date, or which items have not been in high demand and therefore do not need to be reordered. These technologies have the potential to sharply decrease the volume of products that stores would otherwise have to consider for disposal (items unfit for consumption, past their expiration dates, or not wanted by customers).
The digitisation of physical stores will produce real-time, accurate in-store data analytics, opening an era of enhanced collaboration between suppliers and retailers to improve supply chain efficiency, transparency, safety, and sustainability. To support waste reduction, data insights from stores can even help create accurate fresh food production plans.
The more visibility retailers have on their stores and shelves, the easier it can be for them to adapt their deliveries and logistics. They can re-order when it’s necessary and avoid too many deliveries if products are still on shelves.
The future of retail is phygital
Implementing digital technologies in physical retail is a key sustainability enabler. These technologies encourage sustainable consumption, enable brands to deliver a wealth of information, smart content and transparency to consumers at the shelf.
For instance, Kavanagh’s Budgens in Belsize Park is the latest store that has implemented new IoT technologies to address sustainability, among other benefits. As the first VUSION 360 store in the UK, the store has taken steps to radically reduce food waste, optimise pricing, on-shelf availability, and impact on in-store advertising, including promoting more sustainable food choices. In collaboration with HowGood, the store has implemented sustainability tags that help customers spot products that are climate and water friendly, have been ethically sourced, and can be classified as more sustainably made. SES-imagotag has been further helping with phantom waste and stock, cash refunds, labour savings and promotions. One of the biggest wins has been lowering operating costs and trading significantly ahead of budget.
Digital and IoT technologies will transform stores into more automated, data-rich and data- driven and sustainable environments which enable seamless omnichannel, better service and information, and supply chain transparency.
