Category Archives: AgriFood

A Growing Demand For Sustainable Foods

It has been a year of living with the Covid-19 pandemic, and it has impacted consumer preferences and business practices when it comes to food sustainability and food labelling.

Clean Labels are a key trend this year – As countries around the world enter various states of lockdowns, more consumers are looking to buy healthier, more sustainable foods to cook at home, turning their attention to food labels for information on the origin and ingredients. Between 2013 and 2018, sales of products with sustainability claims increased 29%, according to a study by NYU Stern center for Sustainable Businesses and IRI.

Consumer’s Distrust of Sustainable Labels

Yet, consumers are not finding the information they need or trust on the labels. In Singapore, while 35% of consumers are willing to pay a premium for sustainable alternatives, 23% do not trust the sustainability claims of businesses. In the US, a FoodThink study showed nearly half of consumers who regularly buy food for their households do not trust the industry to do the right thing. Worldwide, due to the lack of transparent product-level information, there has been increased skepticism amongst consumers that brands are simply greenwashing their products.

Foods Labelled as Fairtrade  (Source)

This problem is evidenced by the low level of influence current sustainable label packaging has on consumer food choices. Research has shown that while consumers view sustainability as an important issue, when it comes to individual food choices, sustainable logos do not play a major role in consumers’ food choices.

One explanation for this curious paradox might be that consumers do not trust current sustainability labels. In his book Organic: a journalist’s quest to discover the truth behind food labeling, Peter Laufer details how sustainability labels are hardly regulated and untransparent, making it difficult for consumers to verify these labels.

Sustainability Certification is Not Enough

At the same time, the disruption of global food supply chains caused by the pandemic has renewed the impetus for businesses to make their supply chains more sustainable and resilient. Increasingly, they are turning to certifications as a way to show consumers that they are taking active steps to address sustainability.

While effective in ensuring the adoption of more sustainable practices in certified entities, it is clear that sustainable certification alone is not enough.

Due to the complexity of modern food supply chains, there is an inherent disconnect between sustainability practices done on the upstream at the farm, and the product data that the end consumers at the tail end of the supply chain receives. There is thus a need for fully transparent sustainability labels that is able to show sufficient provenance information.

DiMuto Traceability Labels

With DiMuto, agrifood companies can now track food products from farm to fork, combining the physical product movement along with documentation.

This visibility can be achieved down to each individual product and carton, by labelling every product and carton with the DiMuto Traceability Label. Product movement through critical supply chain milestones like the packing, transport and receiving stages is then tracked on the blockchain and combined with relevant certificates and trade documents. This ensures an immutable, holistic view of product provenance.

 

DiMuto Traceability label

All these traceability information tracked can be easily communicated to consumers using the same label. By simply scanning the DiMuto QR code on food products like fresh fruits and produce, consumers are brought to DiMuto SMART Marketing Product Page, where they can now view the DiMuto Product Passport.

The DiMuto Product Passport

With the DiMuto Product Passport, consumers are able to access a passport showing verified, important provenance data  related to the product that they just purchased. Supply chain data tracked on the blockchain-powered DiMuto Platform can now be succinctly shared as part of the DiMuto SMART Marketing Product Page.

DiMuto Product Passport

They can view and verify product-related certificates such as organic certifications using the Singapore-government backed third-part validation tool TradeTrust. (To learn more about how DiMuto uses TradeTrust, click here) Consumers can also access the product movement timeline showing each supply chain milestone.

Not only so, the SMART Marketing Product Page allows brands to do more than just share verified traceability data. Brands can also communicate their brand story, sharing more regarding where the fruit was grown, and how the process is organic, sustainable or fair-trade, and even get feedback or host campaigns on the same page.

DiMuto SMART Marketing

With this, agrifood businesses can now easily communicate their product-level traceability information to end consumers. DiMuto can help companies improve consumers’ trust in their sustainability labels. It is likely we will see more consumers make sustainable food choices with transparent, verified sustainability labels, helping to make the global food supply a truly sustainable one.

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If you are interested to learn more about our solutions, please contact sales@dimuto.io.

 

 

 

During the first ever digital edition of the Asia Fruit Logistica (AFL) last week, the fresh produce industry took a look at the future of Asia and Southeast Asia for the fresh produce industry.

Recovery of Asian markets

Like we predicted in our previous article, Asia’s fresh produce trade is set to bounce back and recover from the global pandemic according to the panel of experts in Asia Fruit Congress 2020. As the Fruitnet report on the event states, even a tourism-based economy like Thailand is beginning to see signs of recovery, and consumers in Asia are already veering towards e-commerce well before the coronavirus.

Demand for traceable produce

More and more consumers in Asia are expecting traceability when it comes to fresh produce, according to key findings in a Southeast Asian market report from The Australian Trade and Investment Commission (Austrade) shared during AFL. Consumers in Singapore, Malaysia and Thailand are looking for traceable, high quality and premium fresh produce.

Excerpt from AusTrade sharing session during AFL2020

Opportunities for fresh produce suppliers

For produce grower-exporters looking to enter the different Asian markets, this presents a great opportunity to leverage traceability as a way to differentiate your brand of fresh produce from others in the market.

In order for traceability to make sense to producers, the value it can bring to the table has to be outweigh the cost of implementing new technologies and adapting existing work flows. Thus, “will consumers pay a premium for traceability?” is a big but necessary question that producers ask when it comes to the topic of traceability. According to a scientific study published by the Europe PMC, about 70% of consumers in China are willing to pay a premium for traceable fresh pork, and quality certification mattered most. A report by the Label Insight and Food Marketing Institute found that 75% of consumers are more likely to switch to a brand that provides more in-depth product information beyond what is provided on the physical label. 73% of consumers are also willing to pay more for such information transparency, and 56% of them trust brands that provide these information more.

By engaging end consumers at the retail level and showing them that your produce has been tracked and trace from farm to fork, producers are able to build trust with end consumers and strengthen their brand with an ability to command higher price premiums and more loyal customers.

Getting Started – First Trace, then Communicate

How to get started? Firstly, producers will need to deploy traceability systems to make sure that they can see all the important supply chain information in one place.

This means that the information on the fruit level has to be tracked and recorded throughout the supply chain, beginning from the packhouse or farm and continue as it travels towards the consumer. Information here includes fruit quality, product certificates stating origin, good manufacturing practices and more.

It is also important to ensure the integrity of the information, so that producers can communicate information that is verified – which is why many grower-exporters have been looking at blockchain for its ability to preserve and record information in a shared, immutable manner.

QR codes on fruit labels that give the ability to communicate to consumers directly

Then, there is the issue of communicating such provenance information to consumers. How can producers directly engage end consumers around the world? The answer lies, simply, in QR labels. When producers label every single fruit with a QR code, consumers can then scan the code with their mobile phones to retrieve and access such information.

DiMuto SMART Marketing Tool – Traceability with a Story

DiMuto helps produce suppliers to digitize, organize and capitalize their product and trade data. With our trade solutions, producers can track and trace their products, down to every single carton and every single product on one single platform. This product level of granularity is then combined with the relevant trade information such as shipping information and buyer receipt information on the blockchain.

As part of our trade services helping suppliers to capitalize on their traceability data, the DiMuto Sales & Marketing Retention & Awareness Tool (SMART) Marketing solution then helps brand owners and suppliers to communicate this traceability information to end consumers.

Our product page allows you to conduct cost effective marketing campaigns to engage end consumers – consumers will be able to see verified product origins, obtain information about the farm and growing practices, as well as learn new recipes and participate in exciting lucky draw promotions conducted directly by growers and brands. Consumers are also able to leave feedback on the produce quality, giving suppliers important information about the product quality and consumer experience, something that producers were previously unable to learn about due to supply chain complexity.

Consumers are able to access verified traceability story of their produce with DiMuto

We have helped suppliers like Newton Orchards, Morning Glory Farms and Pukuna Farms to engage end consumers with our solutions. Click on the links to read their customer success story.

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If you are interested to learn more about our solutions, please contact sales@dimuto.io.

The Singapore Food Agency ordered a recall of US peaches that were potentially linked to the ongoing Salmonella outbreak in the States and told consumers to look out for specific PLU codes. However, “not all peaches with these price look-up codes are supplied by Prima Wawona” – this could cause confusion for end consumers.

Singaporean Consumers were told to look out for the code numbers on the peaches to know if they were unsafe 

The Problem with PLU Codes

Prima Wawona packaged peaches [Source: FDA]

For consumers, it is easier to identify exactly which brand or producer the affected produce came from, as in the picture of packaged Prima Wawona peaches shows. It is much more complex when it comes to loose packed fruit that has already been distributed out in the market.

According to the Produce Marketing Association (PMA), PLU codes, otherwise known as Price Look-Up codes, are codes that are labelled onto individual produce based upon the commodity, variety and size group. They are primarily used by supermarkets to make check-out and inventory control easier, faster and more accurate.

Thus, this means that the PLU code does not indicate which supplier or grower the produce comes from, which can make it challenging to do accurate, timely food safety recalls for loose packed fruit. This can also result in unnecessary food wastage due to the wholesale dumping of food simply because it is not possible to properly isolate the affected unsafe food.

In addition, these codes are also typically meaningless to the everyday consumers in groceries stores, which makes it difficult for them to remember what exactly which PLU codes mean on the spot, especially when the list of codes is extensive – they would likely have to search it up.

DiMuto Traceability Labels

With DiMuto traceability labels, a QR code is effectively applied onto each fruit. In the event of food safety recalls, end consumers can easily scan the QR code and be notified immediately if their fruit is safe to consume. This QR code brings consumers to a product page where the supply chain information communicated to them is verified and uploaded on the blockchain, on our DiMuto platform.

 

With DiMuto solutions, we are able to track down to every carton and every fruit by tagging each fruit and carton with unique digital identities or QR codes.

By tracing the fruit or produce from the supply chain upstream all the way to end consumers, we can then tackle food safety challenges in an accurate, timely and verified manner.

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If you are interested to learn more about how DiMuto helps create traceability for fresh produce, please reach us here or drop us an email at sales@dimuto.io.  

Covid19 has hit the world hard, and many countries are still reeling from devastating impacts. One region that has the global consensus of being the leaders in covid19 response is Asia.

As we have seen throughout this year, China and the Asian region in general have demonstrated a greater recovery in economic terms from the current Pandemic. China has managed to keep its cases under control and has been beginning to open trade with new markets and reinforcing the existing ones with the same Asian countries. Throughout the pandemic, China has grown by 1.2 percent, although the number is relatively low, which China has been able to maintain at a positive number, has demonstrated its economic strength. For 2021, the IMF predicts China’s economy will grow by 9.2 percent, leading all major economies.

 

The future is in Asia

In the current coronavirus climate, the International Monetary Fund (IMF) has predicted that only emerging Asia will see growth in 2020 and Asian Development Bank has stated that growth in Asia will rebound next year.

Over the past 10 years, GDP in emerging Asian economies have expanded 160%  while global growth measured about 30% according to IMF. With a strong foundation of economic growth in the last few decades, Asia is on track to top 50% of global GDP by 2040 and drive 40% of the world’s consumption, representing a real shift in the world’s center of gravity.

In China, the world’s largest economy, economic growth has exploded over the last 30 years. China’s economy has enjoyed 30 years of explosive growth, making it the world’s largest. At the moment, despite the pandemic, China´s economy have been recovering, and companies have also been shifting towards Southeast Asia as global supply chains continue to shift – a region that has US$5.3 trillion of global trade passing through each year. There is only a matter of time that Southeast Asia to become the fourth largest single market in the world by 2030 – putting it behind only the US, China and the European Union.

DiMuto Trade Network 

DiMuto understands the many difficulties in conducting cross-border international agrifood trade, and the various risks involved, due to the disconnected flow of information across global supply chains where buyers and suppliers are often located in very distant geographical areas.

With DiMuto and our trusted network of buyers in the region, you can trade agrifood products and fresh produce products with peace of mind. DiMuto Global Trade Network is made up of an exclusive network of trusted buyers and suppliers conducting traceable trade on the DiMuto Platform. With full supply chain visibility, growers and retailers are able to buy & sell fresh produce more effectively and efficiently. By joining our network, you deal with traceable, trackable fresh produce that has been digitized on the DiMuto blockchain-powered platform, creating data-backed trust and peace of mind when you conduct global produce trade.

Now more than ever, the coronavirus has disrupted trade, so the need for alternative suppliers & buyers is imminent. With our Global Trade Network you can find Suppliers/Buyers in different regions of Asia, so you can expand your supply chain network of trusted trade partners.

Tackling the Messy Middle Nightmare

Doing business with Suppliers / Buyers that are far apart can eventually end in a nightmare – creating what is called the “Messy Middle” where miscommunications, misinformation and trade disputes thrive due to the lack of data and information flows in the supply chain.

The Messy Middle of agri-food supply chains

Due to this Messy Middle, there is a lack of transparency, so packers and suppliers find themselves facing heavy burden of proof when it comes to proving that they have packed produce of order-specified quality to buyers and retailers.

It’s worth pointing out that Asian countries, especially China, have become increasingly important destination markets for Latin America’s agricultural exports. Therefore, agricultural products are exposed to larger transit times, composed of unreliable cold chains and a complicated mix of on-land, maritime and air logistics. It is impossible to successfully and safely arrive in Asia without Midstream Technologies providing packaging, shelf life support, traceability and know-how to support the product during its journey to the end-consumer. It’s very likely a consumer will receive a fruit that has travelled for 30 days but that doesn’t mean they won’t expect the same quality as one that was locally harvested.

With DiMuto 4T traceability solutions, you are now able to have visibility over the provenance of the food products moved from farm to table, all stored on the blockchain on a single platform.

When buyers receive the products, with the Dimuto Receiver App, the buyer has to scan the QR code of the carton boxes and take pictures of them as proof that the shipment has been received. This allows the buyer to provide feedback of the quality of the products or report defects if it is necessary. On the other hand, the supplier has the chance to prove they have sent their products in good conditions, being able to upload all the photos at the carton level into one single platform. So it is able to track quality issues down to individual cartons.

 

With our Digitalization solution packers and suppliers are now able to see the quality of the product before the products are shipped off, and access the information easily according to each sales and purchase order, reducing trade disputes. Learn more about how DiMuto has helped a Peruvian supplier with their avocado trade disputes here.

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If you are interested to learn more about how DiMuto helps create traceability for fresh produce, please reach us here or drop us an email at sales@dimuto.io.  

 

 

Food Safety is More Important Than Ever

The issue of food safety is, now more than ever, at the public’s top of mind.

China recently discovered heavy traces of the coronavirus in the meat and seafood trading sections of wholesale markets in Beijing and China’s supermarket shelves cleared of imported fish and meat amidst concern about the virus being imported from Europe.

This has led to government agencies like Singapore’s SFA to issue a statement to clarify that there is currently no evidence showing the coronavirus can be spread through salmon or food packaging.

Incidents like the above can lead to a lot of disruption for the growers and suppliers of our global food ecosystem. Even with clarification statements from authorities in Norway, consumer perceptions will undoubtedly be shaken by such uncertainties and consumer speculation may still exist.

A Need to Foster Consumer Confidence in Our Food Supply Chain

This then highlights the need to bolster consumer confidence in our food supply chain. But food producers around the world may find it challenging to show, for certainty, that the food they provide to consumers is safe due to a lack of visibility of the current food supply chain.

This is despite the fact that there exists many global food safety guidelines and standards such as the Global G.A.P, the worldwide standard for good agricultural practices, as well as country-specific and trade-specific associations and agencies governing food safety and hygiene.

On top of this, in many food production sites, food safety, and personal guidelines such as adequate personnel training, effective supervision, good hand washing practices, wearing gloves and masks etc are actively enforced and has been the norm for quite some time.

It is perhaps telling that Produce Marketing Association, global fresh produce and floral trade association with over 53,000 industry professionals from over 2,900 companies, launched the Joy of Fresh campaign during the pandemic to reassure consumers about the availability and safety of fresh produce.

A 2018 study done by the International Food Information Council Foundation found that consumers get their food safety information through third party channels such as news article, friends/family members, or government agencies.

Given the current state of food safety, the question that agrifood players need to ask will be how can they directly communicate to consumers regarding food safety information in a timely, accurate, and verified manner?

Communicating Food Safety to Consumers Begins with Digitalization 

The answer to this perennial struggle may lie in digitalization.

When every single carton of food products and every single product is digitized,  agrifood players such as farmers, growers, packers, importers, distributors, retailers are then able to track and trace every carton and every product, even up till when consumers purchase the food. With digitization, not only do we have the digital footprint of the food product, but we can marry it with the physical characteristics of the product – namely the condition of the product, the temperature, the location and so on.

When we connect the dots of the food supply chain by having both the data from digital documentation associated with supply chain movements and the data of the physical condition of the food product, food system stakeholders will enjoy supply chain visibility that gives them the ammunition to confidently communicate to consumers the good work that they have done.

So how can we digitize the food supply chain to reap such benefits?

DiMuto 4T Suite Solutions

With DiMuto 4T Suite Solutions, agrifood players are able to track fresh produce and food products as they move through the supply chain to ensure compliance with hygiene and safety regulations.

DiMuto 4T Suite enables producers to digitize their products for seamless food traceability and supply chain visibility. Powered by blockchain, AI, and IoT, blockchain’s incorruptible traceability features allow agricultural products like fresh produce, livestock and seafood, as well as food ingredients to be actively tracked throughout the supply chain.

At the upstream of the food supply chain, unique DiMuto QR Codes and our proprietary Digital Asset Creation devices, DACky, are able to help create a digital identity for every single carton of food product and every product. We also use a combination of AI & IoT in our DACky devices to capture data about produce conditions that can help with quality assurance regarding food safety.

DiMuto QR Codes allows traceability of every single fruit throughout the supply chain

On our blockchain-powered DiMuto Platform, companies can record any and all certifications required by the industry of the particular product offered and associate it with the particular product. The immutability of our records deters fraud and helps attest that the company is carrying out good health and hygiene practices.

At the same time, we are also able to capture poor quality fruit that is not safe to consume on our system. Buyers and importers receive goods that do not fulfill orders specifications or products that have some form of quality issues. Our Dimuto Receiver App allows buyers to record issues immediately upon arrival and capture a photo of any food quality issues on one single platform. Thus, this helps to strengthen the visibility of the supply chain and safeguard food safety.

Find out how we were able to track every single carton with quality issues and visual evidence showing the poor physical condition of the fruit for a Thai importer for a shipment of US Citrus here.

DiMuto SMART Marketing

With food traceability, companies and producers can then communicate to consumers and show that the proper handling processes have been done, product certifications have been verified. Our marketing module, DiMuto SMART Marketing, allows companies to easily communicate this traceability story to consumers with DiMuto SMART Marketing.

Now consumers can scan the Dimuto QR code tagged on each product, and access product information and verified certificates that have been captured on our blockchain and learn about produce origins and get to know their food producers.

The added level of visibility on their food source will alleviate concerns about food safety and help with building confidence in a brand that is traceable and transparent with their food handling and food safety information.

Thus, in addition to current communication channels, companies are now able to directly communicate to end consumers and build trust with consumers.

Read more about how we have helped Morning Glory Farms to tell their traceability story to consumers and build their brand in new export markets.

Food Recall & Food Safety Outbreaks Continues to Plague the Industry

Food safety recalls due to either contaimination of foregin material or foodborne illnesses are common – just take a look at the top 50 recalls of 2019 in the US.

The 2018 outbreak of E. coli infections related to romaine lettuce from the Yuma growing region took about three months to resolve, resulting in 210 sick people, 96 hospitalizations, and five deaths. Most recently, the FDA is working with retailers to ensure the potentially adulterated Freshworld bagged salad products are effectively removed from the market place in the June 2020 Cyclospora outbreak.

The lack of visibility of the supply chain makes investigation time consuming. Companies can get in front of this and conduct efficient recalls and directly communicate to consumers.

With DiMuto Solutions, products can also be easily recalled, aiding in limiting the spread of the disease (regardless of whether the disease is due to a pandemic virus or a food pathogen) due to additional traceability down to individual product levels. If an affected product needs to be recalled, consumers can just simply scan the QR and will be notified by a pop-up if there is a problem with their product.

Therefore, in addition to transmitting security and confidence to consumers, our solution can also help retailers to quickly and efficiently find a contaminated product. Traceability could reduce exposure to the risks of food outbreaks by making it faster, more efficient, and feasible to contain the impact of food contamination.

This helps create a food system that can better meet food safety standards for end consumers in a timely and precise manner.

The Future of Food Safety

So what does the future of food safety look like?

With the increased consumer focus on food safety and the urgency to foster consumer confidence in the food system, it is imperative that we look at digitalization and traceability as a solution to be more efficient and coordinated when issues concerning food safety occur.

Be on the forefront of food safety with DiMuto.

In light of the current coronavirus crisis, we remain committed to helping agrifood players trade better and build a more transparent food supply chain. If you are interested to find out how DiMuto can help your business, please reach us here or drop us an email at sales@dimuto.io.

“Disrupting Agriculture” is the theme for Start-up Day 2020, an event organized by Fruit Logistica, the largest global exposition for the fresh produce industry. With the boom in agtech innovation in the last few years, the produce industry is indeed ripe for disruption.

The wave of new technology trends such as vertical farming, agriculture robotics, smart farming is spurred by problems affecting the supply side of our food supply. Vertical farming has been seen as the next big solution to mitigating climate change and climate-related natural disasters threatening food security, while labour shortages have long plagued farmers prompting the adoption of mechanization and robotics technology – As many as 40% of farmers in California have regularly been unable to fulfill labour required for crop production for the past five years.

Export Fruit Trade as Key Driving Force of Agriculture Industry

While there have been many companies coming up with solutions to solve the problems mentioned above, it is also worth looking at the key driving force behind the global fresh produce and agriculture industry. According to a 2018 FreshPlaza report, the total export trade in fresh fruit and vegetables has developed more rapidly than the total global trade in goods in the past ten years. The international trade in fresh fruit increased by an average of 2 million tonnes per year to about 80 million tonnes in the past 10 years, and the five key trade flows pegs Southeast Asia as the growth market. Mutual trade flows in Southeast Asia performed best with the largest absolute growth in global trade flows of fresh fruit to almost 8 million tonnes worth of fruit a year, as well as rapid growth of exports from North America, Latin America and the rest of the world into Southeast Asia.

Apples, Citrus, Bananas, Grapes are amongst the top exported fruits. 

Trade Dispute: Huge Problem of Companies Doing Export Trade

The high growth of cross border trade in the produce industry has also magnified the problems of conducting produce trade. Problems like trade disputes over food quality can cause up to 5-10% loss per container of fruit exports. Food safety issues, a rampant problem of the industry, often result in entire batches of produce being rejected or destroyed, creating millions of losses. It is no wonder that the need for supply chain and trade transparency was one of the key highlights during Produce Marketing Association (PMA)’s 2019 Tech Knowledge event to solve the “Messy Middle” of global produce supply chains.

Supply Chain Transparency Solves The “Messy Middle”

Supply chain transparency has been little more than a buzzword due to the overwhelming complexity of food systems. While industry giants such as Walmart, Carrefour and Nestle have started implementing traceability solutions in a bid for more transparency, it has been difficult for supply chain transparency to gain more traction throughout the industry. There are limited players that have adopted traceability solutions. This is mainly because the produce supply chain simply involves too many moving parts and stakeholders, and no one traceability solution has been able to work for all the players.

Getting Supply Chain Transparency to Work

For supply chain transparency to work, it is important to target the meat of the problem – getting the data from physical produce.

What does this mean? Millions of physical cartons of fresh produce products are being moved every day,  yet there has not been a way to effectively and efficiently track them, as well as easily access information related to each carton, nor prove the quality of the produce. A key obstacle would be digitalizing the produce and the carton it is packed in. Without a digital identity, it would be extremely difficult to track. (We previously talked about digitalized produce here)

Operational aspects also need to be considered for digitalizing produce to be applicable.  They include being able to efficiently capture all the digital identities of the produce and cartons as they move through packing lines on the ground so that there are minimal disruptions to existing workflows. Not all packing houses are created equal – some are highly automated, while others are still largely manual. Thus for traceability solutions to work down to the product level, it is important to cater to the needs of different produce companies.

At the same time, digital identities need to be easily readable by all supply chain stakeholders. A good solution would be to adopt GS1 Standards for labels, a common foundation for business by uniquely identifying, accurately capturing and automatically sharing vital information about products.

Thus, a deep level of understanding about the workings of the produce industry is key in coming up with a solution that is truly applicable and scalable. That is why at DiMuto, we have developed different machines to capture product information at the packhouse that we call Digital Asset Creation machines (DACky). Our DACky machines are designed to capture a photo of each carton and each individual produce, associate it to the relevant trade that it is packed for so as to relieve the heavy burden of proof on suppliers when it comes to trade disputes.

Not only so, DiMuto is a GS1 Solutions Partner, and we use QR Labels following GS1 Standards for all our customers, as consumers are able to easily scan the QR code for traceability information related to the product.

DiMuto QR Labels

Maximizing the Data from Digital Supply Chains for Added Benefits

At the same time, the benefits of adopting traceability technology have yet to be communicated well to fresh produce companies. Traceability alone is not enough to motivate industry players to adopt potential solutions. The ability to do branding with QR Marketing, as well as direct consumer engagement, is also highly attractive to brand owners looking to build their brands in new overseas markets. The potential to capture more personalized consumer data can let producers and retailers understand more about their consumers and facilitate the matching of supply and demand on the consumer level.

Another advantage of digitalizing supply chains would be trade financing – Produce companies, traditionally, never had trade financing opportunities as many financial institutions often consider the perishable industry too complex, and too high a risk. With digitalization and easily accessible supply chain information, financial institutions may be more keen to provide trade financing opportunities to fresh produce companies.

That is why DiMuto offers a 360 trade solutions platform that solves the challenges of suppliers, traders, buyers and brand owners operating in the produce trade. The ability to reduce trade disputes, access to trade financing and the opportunity to do marketing are key motivators for companies looking to adopt traceability and digitalization. Learn how we have helped provide trade financing to Thailand’s largest durian exporter here.

It is well-known that Data is king in the era of digitalization. Armed with having trusted, quality data about the agrifood supply chain, then can we truly disrupt one of the biggest driving force behind the produce industry.

DiMuto is one of the twenty startups to be selected to participate in Fruit Logistica’s Start-up Day 2020. If you are interested to learn more about how DiMuto helps create traceability for fresh produce, please reach us here or drop us an email at sales@dimuto.io.

This is the second article in the series “The Digital Supply Chain”. This series explores what is digitalization, reasons for digitalization and best methods for digitalization of agri-food supply chains.

Managing agri-food supply chains is notoriously fraught with challenges. Today, global agrifood supply chains are extremely complex,  as agricultural products such as fresh produce often pass through many different stakeholders and cross international borders before finally reaching the end consumer.

The current modus operandi of modern agrifood supply chains often means that information stored at one layer of the supply chain remains accessible only at said layer. For instance, information regarding the sorting and packing process of fresh fruits into different cartons often stays at the packers – meaning only the packer knows how were the fruits sorted and what was packed and shipped for each carton.

This often results in a disconnected visibility of the supply chain where companies are unable to track products as they move across borders – creating what we in the industry call the “Messy Middle” where miscommunications, misinformation and trade disputes thrive due to the lack of data and information flows. Due to this lack of transparency, packers and suppliers find themselves facing heavy burden of proof when it comes to proving that they have packed produce of order-specified quality to buyers and retailers.

The Messy Middle of agri-food supply chains

The Unspoken Challenges of The “Messy Middle”

Operating in the “Messy Middle” is a giant nightmare for both buyers and suppliers alike. Currently, the information flow for each trade is all over the place, made more complicated with the onslaught of country-preferred instant messaging applications. Sales teams often communicate through both messaging applications and email threads, making transactions prone to miscommunications and misinformation.

Without a single trusted platform acting as a unifying depository of sales and product information categorized according to each trade conducted, internal company resources like manpower and time are predominantly allocated towards coordinating, tracking and tracing sales orders, shipping documentation, and financial payments.

With the different communication channels, there is no way to verify, find and share information in a timely and efficient manner.

This becomes a huge problem when quality disputes over goods received are raised. A Chinese apple supplier receives a quality complaint for a container order of Fuji apples from its buyer in Indonesia – “there’s a problem with the apples for order number 123, they are of poor quality”.

Now the apple packer faces an overwhelming burden of proof in trying to show that they have indeed packed their apples to the specifications of said order, as all the information regarding the trade is all over the place, and this trade dispute resolution process is only beginning to happen after the packing, transporting and receiving has been done.

Because suppliers often find it difficult to prove what happened at the point of packing, professional quality control groups are often hired in order to provide a “fair” evaluation of the quality of the products, adding yet another cost of doing the trade.

Disputes often translate to a drastic loss of margins of up to 5 – 10% per container, amounting to as much as $2,500 to $5,000, which is why such a problem is often swept under the rug. Nobody wants their competitors to know they are not doing well or there was a supposed problem with their product. Hence, a key unspoken challenge remains for players navigating this “Messy Middle” nightmare

Hear our founder explain the problems of the produce business here

Blockchain Touted As Revolutionary Supply Chain Technology

That’s why blockchain technology has come under the spotlight recently for its application to the supply chain industry.

Blockchain can publicly validate, record, as well as distribute transactions in immutable, encrypted ledgers.

With its ability to upload immutable trade documents, blockchain has the potential to share verified documents relating to each trade in a secure and efficient manner.

This means that that custody of truth is no longer with one single party within each trade, but instead, trade partners now look towards the blockchain as a source of truth and verified information.

This is also especially valuable when it comes to entering new markets and working with new buyers and suppliers. Having a single, shared platform where information on it is trusted by both parties significantly reduces the friction of conducting business.

With blockchain, buyers and suppliers can now see and agree upon the order specifications that was finalized between both parties, as well as access to relevant product information such as health certificates necessary for exports.

DiMuto goes a step further beyond blockchained trade documentation by providing physical asset digitalization – meaning we assign a digital identity to every single physical produce, and are able to capture a photo of each carton and product before each carton is sealed, upload this photo and associate it to the specific sales order it was packed for. (We previously explained what constitutes a digitalized produce here)

Our proprietary Digital Asset Creation machine, affectionately named DACky

The moment a physical asset like fresh produce can be digitalized, businesses can easily track not only the movement of the product but also critical product information such as quality, health certificates, certificate of origins, product photos tagged to the specific individual product, as well as relevant trade documents surrounding each supply chain transaction.

2019 was the year the world saw more public awareness on climate change.

Locally, 90% of Singaporeans surveyed are aware of climate change and 79% are prepared to do more to combat it. It is clear that the public’s sentiments on climate crisis are also echoed worldwide, with an eight-country poll conducted by showing global citizens prioritizing climate change as an emergency over migration and terrorism.

Problems of Climate Change – Food Security and Sustainability

A big part of the problem with climate change is that warming temperatures threaten food security. According to the Intergovernmental Panel on Climate Change (IPCC), food security will be increasingly affected by future climate change through yield declines -especially in the tropics – increased prices, reduced nutrient quality, and supply chain disruptions.

Source: AFP

The ongoing Australian bushfire crisis has resulted in closed roads that meant food supply running low all over Australia, threatening food security. In Perth, Coles and Woolsworth have warned consumers to expect food shortages.

Experts believe that while bushfires in Australia are an expected natural occurrence, the intensity of the latest fires were aggravated by hotter and drier conditions associated with rising temperatures, exacerbating the crisis.

In lieu of changing weather conditions associated with climate change, we can expect that global food supply chains to be greatly affected.

Thus, there is a need to improve food security and consequently the sustainability of our food systems.

Food Security and Sustainability Challenges in Asia

Asia is often heralded as the fulcrum of our global food system, being both as a producer and a consumer of critical commodities including but not limited to rice, wheat, oil crops, cereals, livestock, root vegetables, and aquaculture.

Despite this, food security is a mounting concern as farmers in Asia actually produce less food per hectare than other regions –  with the exception of Korea, no country in Asia exceeds the Organisation for Economic Co-Operation and Development (OECD) average for staple crops such as rice, soy, and corn.

Increased frequencies and intensity of climate-related disasters in Asia have been reported by the FAO to cost a staggering loss of US$48 billion. In Southeast Asia, the agriculture sector is exceptionally vulnerable to the impact of climate change due to its location in the tropics.

Source

Natural disasters worsen food security through reduced food production, which can then cascade down to the entire food value chain, affecting livelihoods and causing economic and agricultural loss. Disasters can impact the agriculture sector through a loss of assets and rural infrastructure, and through increased disease outbreaks.

This is compounded by the fact that Asia will grow exponentially in the next ten years, adding further demand pressures on the food supply chain in the region. By 2030, Asia will have an additional 250 million population, representing a whopping 65% of the global middle class population. In ten years time, Asia will also have doubled its spending on food, amounting to over US$8 trillion.

 

AgriFood Tech Opportunities in Asia

One of the ways to tackle the challenges of the Asian agricultural sector would be through investing in innovative technologies that help transform the food supply chain.

The recent Asia Food Challenge report jointly produced by Temasek, PwC and Rabobank estimates that a cumulative investment of US$800 billion above existing levels over the next 10 years will be needed to grow Asia’s food and agriculture industry to a sustainable size, in order for Asia to feed itself. The majority of these investments – around US$550 billion – will enable key requirements around sustainability, safety, health, and convenience.

“Efficient Marketplaces, Digital Adoption and Greater Traceability” is cited in the report as one of the five key areas of new technologies that can solve Asia’s food challenge.

Food supply chains in Asia are complex and opaque, with disconnected visibility of data. With digitalization and a marketplace platform, various agrifood industry players including smallholder farmers are able to connect the dots and have access to more information that can better match supply and demand to reduce food waste and improve efficiencies of the supply chain.

For buyers and relevant food authorities, visibility of the supply chain allows for the identification of issues in a way that was never possible before, allowing for targeted intervention in areas such as food waste. At the same time, suppliers can also get access to trade financing due to this new data.

Consumer involvement through scanning of QR codes to access food provenance and safety information allows data to be obtained, supporting growing consumer demand for greater sustainability.

2020 & Beyond

Agri-food technologies are on the rise, and more collaboration from all stakeholders ranging from corporate investors, government agencies and private businesses can be seen.

In Asia, more government policies have also focused on food sustainability.

The Malaysian government has also announced in 2019 the Agriculture and Agro-Based Industry Ministry 2019-2020 Roadmap in a move to look at revitalizing the agricultural industry and strengthen food security. Five key action plans have been raised, including increasing agricultural trade export and spurring agriculture modernization.

In Singapore, the government has set out a 30 by 30 mandate, where 30% of Singapore’s food supply has to be homegrown to bolster its food security – a new statutory board, Singapore Food Agency, has also been created to focus on food safety and food security.

Given the pressing need to revolutionize Asia’s current food systems and regional governments’ push for better food security, food sustainability innovation in Asia is definitely an exciting space to watch this year.