Category Archives: Technology

Are Smallholder Farmers Key to Agriculture Sustainability?

The need for investments in sustainable food systems is highly critical. With the world’s population estimated to rise to 9.8 billion by 2050, there will be greater stress on our current food systems. Additionally, the impacts of climate change bring additional threats to agriculture. A warming climate could cut crop yields by more than 25 percent, while the extreme weather events associated with climate change can have devastating effects on farmers, their land, and crop.

Who are the smallholder farmers?

Smallholder farmers are individuals who grow commercial crops or livestock on less than 2 hectares of arable land. Smallholder farmers can also have numerous landholdings in different nations, but their overall landholdings must be under 2 hectares.

The role of smallholder farmers in sustainable food system

Smallholder farmers can be at the vanguard of global efforts to protect and regenerate nature with the correct support. Empowering smallholders to employ sustainable and regenerative farming practices would allow them to replenish the land for current and future generations while increasing yields and creating agriculture resilience, generating prosperity for farmers and their families and positive effects on the environment.

In Brazil, for instance, a report by the Stockholm Environment Institute found that ‘between 2004 and 2011, landowners with more than 500 hectares (1,235 acres) of property were responsible for about 48% of the deforestation. Areas owned by smallholders accounted for 12% of the forests destroyed during the same period. However, since 2005, the contribution to annual deforestation by the largest landowners has fallen by 63%, while that of smallholders has increased by 69%.’ Smallholder farms are crucial in determining whether a sustainable food system can be achieved

Challenges Faced by Smallholder Farmers for Profitability

Few smallholder farmers have access to formal training, sophisticated farm supplies and equipment, and financial capabilities to increase soil health and production. Many smallholders also lack official paperwork proving ownership of their property, limiting their options for growing what, when, and how. As such, long-term, sustainable farming practices are rarely prioritized.

Smallholders are also hampered by systemic concerns such as gender inequity, health issues, and lack of sanitation. As a result, there are significant obstacles and potential in assisting smallholder farmers in adopting regenerative agricultural principles.

Furthermore, many of these variables have limited the contribution of smallholder farmers to urban consumers. As a result, it is evident that a sustainable food system must be supported by policies that allow smallholder farmers to realize their full potential while managing with externalities and limits.

If smallholder farmers are to play an essential part in a sustainable food system as sustainable food producers and food security providers, they will need to be equipped with training, equipment and financing that rewards them for sustainable farming practices. The challenge would then be to ensure that monitor and ensure help is provided to truly sustainable farmers.

How can Smallholder Farmers Benefit from Data Visibility? 

According to Emergen Research, the worldwide food traceability market size reached $4.54 billion in 2020 and is predicted to reach $9.75 billion by 2028. 

Rising demand for food traceability systems to identify mandatory paperwork and tracking for each stage of food processing is predicted to drive this revenue increase. Increased need for critical technologies in the agri-food sector is a very useful tool for analysing, monitoring, and regulating product flow. By digitalizing farm data and visibility, smallholder farmers can organize and improve their farm for higher profit margins and sustainable growth.  

Additionally, as the demand for food traceability technology has been on the rise for both eco-conscious end-consumers and food businesses alike, visibility on the smallholder farmers actions on their farm fields would be key to be able to track provenance of food products.  

How DiMuto  Helps Smallholder Farmer with Sustainability and Visibility 

L to R: Farm profile, Farm Lot Input Information, Farm Wallet

The DiMuto Farm Management application connects growing, harvesting, selling and payments for better visibility of farm operations with its three functions – Grow, Sell and Services. Using the DiMuto Farm Management Application, smallholder farmers can easily set up their digital identity on the Farm Management mobile application and connect their operations to their buyers such as procurement teams and agronomists from larger traders and packhouses within minutes. Through an intuitive interface, farmers can simplify farm administration, storing and accessing digitalized farm records, transport, and sales information easily. Additionally, they can also obtain yield estimates, track production, and get timely reminders to manage their field.   

With DiMuto Farm Management app, smallholder farmers can now: 

  • Simplify farm administration and easily track all farm-related records all in one place, and access it at anytime, anyplace 
  • Connect growing, harvesting, selling and payments for better visibility of their farm operations 
  • Get better prices, market position and premium buyers with produce that’s traceable straight from the farm 
  • Gain better visibility of planning and yield estimates, track production and identify trends and potential problems

Such farm data is then automatically populated to an aggregated web dashboard for agronomists and procurement team to track the farm and estimated harvests, giving more accuracy to supply planning. The Farm Management also seamlessly connects to Production Management and Trade Management features of the DiMuto Platform, allowing AgriFood companies to track the source of their AgriFood products and raw materials, down to the farm and lot that they originated from. As an added layer of verification, all supply chain data recorded on DiMuto Platform is also uploaded on the blockchain, ensuring immutability and trust.  

With increasing demands from consumers and governments for sustainable sourcing, this down reaching level of supply chain visibility will help AgriFood companies track and verify key sustainability metrics.  For instance, e, AgriFood procurement teams are now able to track measures such as the farmer that grew the food, the number of approved fertilizers, and water being used for the products that they purchased – enabling them to work more closely with farmers on the ground to ensure sustainability practices. This is particularly important for companies to achieve supply chain sustainability, given that a McKinsey report has shown that 80 of large multi-national companies (MNCs)’ impact on air, land, water, biodiversity and geological resources comes not from internal operations but from its supply chain, and most MNCs are struggling to accurately and efficiently assess supplier activities.  

Research estimates that 70% of smallholder farmers in global Agri supply chains live below the global  poverty line of $3.20 a day, amounting to over 122 million people. This is despite the fact that smallholder farmers producing a third of the world’s food.  

The DiMuto Farm Management application also has a Digital Wallet function that helps farmers to track, receive and access digital payments. The payment rails will help DiMuto to execute smallholder farmer financing and insurance opportunities, allowing loans and payments to be directly deployed and rightfully received. The Digital Wallet is also connected to the Trade Management and the Grow aspect of the app, creating the ability to verify purpose and usage of the loans and ensuring that funds can be used for improved resiliency and sustainability of these smallholder famers. 

If you are interested to learn more about how DiMuto helps improve sustainability of food systems for global AgriFood trade, reach us at sales@dimuto.io

Leveraging Blockchain Traceability For Brand Building

PT Sewu Segar Nusantara (SSN), a Leading Local Fruit Distributor and Marketer in Indonesia

The Republic of Indonesia is one of the most populated nations worldwide and among the largest countries by total area. In 2020, the total population of Indonesia amounted to approximately 270.2 million. It is the largest economy in Southeast Asia.

PT Sewu Segar Nusantara (SSN) is part of Great Giant Foods, the brand entity of Gunung Sewu Group and a leading vertically integrated food player that cultivates, manufactures, delivers fresh and processed fruits, juice, meat, and dairy.

SSN has a distribution network covering: 133 Cities in 9 Major Regions, 2000 Modern Markets, 52 Sub-Distributors, 65 Wholesalers, 6000 Retailers

A Need For An Efficient Supply Chain Traceability

For some of its local products such as Pisang Mas, Melons and Oranges, SSN employs regional agronomists to work directly with smallholder farmers around different regions of Indonesia.

With the low level of technology adoption amongst these farmers, efficient and cost effective supply chain traceability was needed that could help verify provenance and extend Sunpride’s quality assurance to other local products in their portfolio, ensuring that Sunpride’s brand promise of safe quality products is kept to its consumers.  

The Asian Consumer Perspective: Growing Demand for Safe & Traceable Foods

Over 40% of Asian consumers are concerned over where their food is sourced from and source-checking is a habit for some of them, indicated in a survey by the Asia Food Challenge report done by PwC, Rabobank and Temasek. It is clear that consumers across Asia are demanding stronger reassurance that food is safe, and are turning to brands they feel they can trust. Some consumers also indicate willingness to pay a “trust” premium for food bought directly from their source.

With this trend in mind, there is growing pressure on AgriFood food brands to be able to leverage technology for safe and traceable food solutions in order to buildtrust and credibility with consumers.

Introducing DiMuto’s Solution

DiMuto’s 8 Product Features

See the full picture with Insightful Trade Data 

From Produce, Trade to Market, DiMuto AgriFood Trade Solutions have 8 key Product Features that help you gain visibility of the in-betweens in your supply chain.

DiMuto’s All-In-One Platform

An all-in-one, farm to fork platformOur 8 Product Features include:  

Farm Management 

DiMuto Maximize farm efficiency and profitability, read more. 

Production Management 

DiMuto Organize, track and trace your production, read more. 

Trade Management 

DiMuto ensures that you are in control of your trades with full visibility, read more 

Inspection & Standards Management 

DiMuto Organise, digitize and verify product quality, read more. 

EmVend Marketplace 

DiMuto helps you to Enter new markets and grow your exports, read more. 

SMART Marketing 

DiMuto helps differentiate your brand with traceability, read more. 

Payment Management  

Stay on top of your trade payments & settlements ,read more. 

Financial Services 

DiMuto helps to protect your trades with insurance, read more. 

Tracking Regional Supply Chain with DiMuto

Applicable Blockchain for Food Traceability

Immutable Records of Supply Chain Actions in a single platform

The DiMuto Platform automatically records each transaction onto the blockchain, a distributed ledger technology that uploads information in blocks and adds new information in chronological order to ensure transparency.

Trade Information recorded by the different SSN departments are secured with a blockchain hash to ensure transparency and immutability, achieving supply chain provenance in the most secure manner.

DiMuto SMART Marketing

DiMuto SMART Marketing gives marketing teams of produce brands the ability to seamlessly communicate traceability data that has been recorded by their operational team and display it to their consumers in the form of a Product Passport.

The Product Passport is able to showcase selected Product Certificates that have been uploaded on the blockchain, as well as critical supply chain stages such as Farming, Packing, Shipping and Receiving stages.

This helps produce brands to showcase product provenance and build consumer trust.

Showcasing Sunpride Brand with DiMuto SMART Marketing

Creating Strong Consumer Relationships with Direct Insights and Feedback

With DiMuto SMART Marketing, executing brand marketing campaigns, hosting promotions and lucky draws to raise brand awareness, collecting product-specific feedback from end consumers make has never been easier for PT SSN

Feedback derived from end-consumers directly provide more insights on the individual products, ensuring visibility not only between SSN departments, but also close the loop with regards to product quality at consumer level.

The positive brand engagement ratings from Point-of-Sale promotions indicate strong potential for SMART Marketing to become an important marketing tool to drive sales, better understand end-consumers and build brand loyalty.

DiMuto Helps Brands Communicate Verified Traceability to Consumers

Read more of our Real-Life Case Study about How Deploying Blockchain Traceability Helped to Create Consumer Engagement For A Leading Produce Brand in Indonesia here: Leveraging Blockchain Traceability for Branding Case Study

If you are interested to learn more about how DiMuto helps Agri-Food businesses leverage on blockchain traceability to create consumer engagement, please reach us here or drop us an email at sales@dimuto.io. 

How Retailers Can Better Manage the Impact of The Messy Middle

The Challenges of Managing the Messy Riddle

In the AgriFood industry, it is difficult to track fresh produce along the supply chain due to disconnected visibility. Because of the multiple players involved, critical data regarding product quality is often not shared efficiently between stages in the supply chain.  

Often, buyers and retailers have no visibility on fresh produce products during pre-shipment. Quality issues will only be raised upon goods arrival, making it challenging to ensure consistently good quality supply. Receiving poor quality produce results in rejection-related loss of sales and food waste that can easily amount to thousands of dollars. 

Food Waste Generated by Retailers Worldwide 

In the US, grocery retailers generate a whopping 13% of total food waste, totalling a 10.5 million tonnes that go into landfills annually. Meanwhile, in the EU, supermarkets account for 5% of the food waste problem, sparking a pledge by the EU to cut food waste in half by 2030. 

In Singapore, a central warehouse of a supermarket chain rejects about 15 to 20 pallets worth of fresh produce every day, typically due to not meeting product quality specifications agreed upon with suppliers. Each pallet can contain anywhere between 500kg and one tonne of produce.  

Sources: The Straits Time, Food Print, Global Citizens

How Receiving Poor Quality Fresh Produce Costs Retailers 

A Container of Fresh Produce can value between US$50,000 to US$150,000. When Retailers receive fresh produce that does not meet their product quality specifications, it negatively impacts their inventory and sales. 

  • Loss in sales – where the rejection of fresh produce leads to a decrease in their stock count and inability to fill the floor  
  • Incurred costs not recovered – especially during the Covid-19 pandemic, the rises in freight costs are at an all-time high making goods rejection even more costly 

Sources: Sourcing Journal

Poor-Quality Grapes Rejected at Retail-Level

High-Cost of Poor Quality Produce

In a typical fresh produce trade, buyers and retailers have no visibility on the conditions of the goods that were packed and loaded pre-shipment. This makes it difficult for them to efficiently respond to inventory changes caused by quality issues. 

Based on a Real-Life Case Study on Moving Fresh Produce

  • Programme for 15 containers of fresh grapes from supplier to a supermarket buyer 
  • Lack of visibility on pre-shipment quality from the supplier to retailer 
  • 8 out of 15 containers rejected due to quality issues and poor container unloading conditions 
  • Inefficient communication between Quality Control team and Commercial team regarding quality 
  • Loss of sales from 8 containers amounted to over USD$520,000 
  • Entire programme had to be cancelled and discontinued 

No Data, No Visibility

Often, retail stores receive goods that do not fulfil order specifications or products that have some form of quality issues. Moreover, the defects are only known when the fruit or produce has arrived due to a lack of product visibility along the supply chain. This makes trade managing fresh produce challenging for retailers: 

  • Unable to see pre-shipment product quality and container loading 
  • Unable to quickly respond to inventory changes due to rejections from quality defects 
  • Unable to communicate defects easily and effectively between internal teams 

Introducing DiMuto’s Solution

DiMuto’s 8 Product Features

See the full picture with Insightful Trade Data 

From Produce, Trade to Market, DiMuto AgriFood Trade Solutions have 8 key Product Features that help you gain visibility of the in-betweens in your supply chain.

DiMuto’s All-In-One Platform

An all-in-one, farm to fork platformOur 8 Product Features include:  

Farm Management 

DiMuto Maximize farm efficiency and profitability, read more. 

Production Management 

DiMuto Organize, track and trace your production, read more. 

Trade Management 

DiMuto ensures that you are in control of your trades with full visibility, read more 

Inspection & Standards Management 

DiMuto Organise, digitize and verify product quality, read more. 

EmVend Marketplace 

DiMuto helps you to Enter new markets and grow your exports, read more. 

SMART Marketing 

DiMuto helps differentiate your brand with traceability, read more. 

Payment Management  

Stay on top of your trade payments & settlements ,read more. 

Financial Services 

DiMuto helps to protect your trades with insurance, read more. 

How DiMuto Helps

DiMuto’s Pre-Shipment Quality & Trade Info

DiMuto’s Inspection Module

DiMuto makes all parts of the trade easily visible and accessible to relevant teams within the Retailer. With Trade Management, the commercial, QC, shipping team can access pertinent trade documents and data. 

DiMuto’s Inspection and Standard Management

DiMuto Inspection Management helps digitalize the QC process and allows a more efficient way to standardize, record and evaluate quality inspections for optimal product quality.  

DiMuto Creates Trade Visibility for “The Messy Middle” 

DiMuto’s Accessibility of Pre-Shipment and Post-Shipment Quality 

With DiMuto, Retailers can now enjoy accessible visibility of pre-shipment and post-shipment quality to better manage any potential loss of sales 

  • Pre-shipment product quality down to every single carton easily accessible to commercial team 
  • Trade information, documents and actions of each trade seamlessly recorded and presented in timeline view 
  • Post-shipment product quality efficiently captured and communicated between QC, commercial and retail teams 
  • Dashboard view of Inspection Management to ensure optimal product quality and vendor performance 

Read more on our Real-Life Case Study on Receiving Poor Quality Fresh Produce At The Retail Stage: The Retail Impact of The Messy Middle.pptx

If you are interested to learn more about how DiMuto helps Agri-Food businesses leverage on an increased visibility of Pre-Shipment and Post-Shipment Product Quality, please reach us here or drop us an email at sales@dimuto.io. 

How Blockchain, AI and IoT Simplifies AgriFood Product Quality and Food Sustainability

How Blockchain, AI and IoT Simplifies AgriFood Product Quality for a more efficient, sustainable and transparent food supply chain

In today’s society, AgriFood trading practices have evolved to keep up with consumer demands of high quality, safe and sustainable food products. A key tool to help AgriFood businesses to meet this demand is blockchain.

The use of blockchain technology has become an essential tool to ensure efficiency and transparency for AgriFood trade transactions. Additionally, understanding food provenance is becoming more prevalent among end-consumers, making it critical for AgriFood businesses to better understand, manage and communicate product movement from farm to fork.

What is blockchain technology?     

Blockchain is a shared distributed ledger technology that allows users to share verified, immutable information with each other. In this way, blockchain helps agrifood supply chain stakeholders to share trusted information with each other for each trade transaction, allowing the tracking of food provenance and the building of a more visible, efficient and transparent supply chain. 

Blockchain can be used for applications such as improving food quality control throughout AgriFood supply chains. 

Using Blockchain, AI and IoT to Improve Product Quality Control 

Studies have shown that fruits and vegetables are thrown away due to unsuitable storage and shipment conditions. For instance, in Central and Southern Asia, losses in transport can be as much as 30% of the overall yield, a huge amount of waste.

As AgriFood products are transported along the food supply chain, they often take different routes and go through numerous handlers. This means that the ability to track the produce across the supply chain is challenging, making it difficult to ensure optimal product quality. This is particularly critical in the fresh produce industry where ensuring quality is key to maximizing shelf life. 

The challenges that AgriFood businesses need to overcome to assure product quality are: 

  • Processing large quantities of trade, product and document information 
  • Underutilizing valuable technology  
  • Keeping track of product information 
  • Optimizing processes that ascertain product quality information 

How DiMuto uses Blockchain, AI and IoT to ensure Product Quality

DiMuto uses blockchain technology along with Internet of Things (IoT) and Artificial Intelligence (AI) to determine product quality in an objective and simplified manner.

DiMuto transforms the way of assuring product quality by following four steps: 

  1. Utilizing IoT technology in our Digitial Asset Creation (DACKY) Devices to capture  product data, down to every single carton, throughout the supply chain
  2. Organizing the collected data to be accessible, readable and understandable by different users on our Trade Solutions Platform 
  3. Enhancing the collected data with more insights using AI
  4. Data gets saved on the blockchain to ensure immutability 

DiMuto DACKY devices capturing pre-shipment carton information at various packing facilities. 

Visual Images of each carton of AgriFood product is then automatically uploaded onto the DiMuto Platform, and associated with each trade transaction so that the product, quality control and sales teams across the AgriFood organization can access these data easily.

DiMuto AI and Machine Learning then enhances the information gathered to provide useful insights using predictive models and analysis, this process will procure important product information to assess on its quality score:  

  • Product Identification 
  • Product Size 
  • Product Quantity 
  • Product Quality 

Watch the above video to learn how DiMuto uses AI to determine pre and post shipment product quality 

The insightful data will be stored on the blockchain, ensuring security and immutability through a decentralized node network. 

There is a risk of a single point of failure with the current practice of keeping important information in a centralized server. The data in blockchain, on the other hand, is spread among all nodes in the network. As a result, it prohibits the system from being controlled by a central authority. Thus, accessibility to product quality information is invariably simple and secure. 

This will help to determine the product quality of AgriFood products in a more efficient manner, helping AgriFood businesses to better control food quality at various stages of the supply chain.

With DiMuto’s solution, AgriFood companies can reduce food wastage due to more visible, efficient and reliable product quality controls along the supply chain and take the next step towards food sustainability.

If you are interested to learn more about how DiMuto helps AgriFood companies to utilize blockchain and other technology for a more efficient and sustainable supply chain, please reach us here or drop us an email at sales@dimuto.io.

How DiMuto uses TradeTrust Blockchain Validation to Strengthen Trust in Global Trade

The Problem with Trade Documents in Global Trade

In today’s digital age, it may be surprising that the document trail for international trade is still very much physical.

Due to the complex nature of cross-border trade transactions, there are often many different parties involved across multiple geographies involved, most of whom use fragmented systems that do not harmonize with each other.  The continuance of paper-based processes persists because currently there is no easy way to verify the authenticity of these trade documents.

businesswoman-putting-stamp-documents-office
Manual, physical documents are the default for international trade

Time and money spent on paperwork continues to be a significant cost of conducting cross-border trade – Research done by IBM and Maersk has shown that the costs associated with trade documents processing can cost up to one-fifth of the actual physical transportation costs. Today, exporters need to dispatch the physical documents to consignee in their destination markets, despite having already sent the documents on other digital channels like emails and messaging applications. Thus, it is not uncommon that the goods can be shipped faster than the documents are processed.

The usage of physical trade documents inherently poses a high level of risk, mainly from falsified documentation. According to CNBC article, there has been a rise in falsified trade documents in the last five to ten years. High-tech photocopiers can duplicate trade documents like the bill of lading, in the original ink colours, and add fake information.

Due to the difficulty of distinguishing the real documents from forged ones, fake documents can be used to obtain loans from the banks and increases the risks for all involved parties including legitimate buyers and financial institutions providing trade financing services. The 2020 high-profile case of trade finance fraud by Hin Leong Trading, a Singaporean oil trading company that allegedly forged an email and documents, is proof that reliance on physical documents is a huge vulnerability.  The adeptness of forgers are forcing banks like OCBC to look into going digital and using blockchain for the US$9 trillion global trade finance industry.

What is TradeTrust?

Together with the International Chamber of Commerce (ICC), the Singapore government launched TradeTrust, a set of globally-accepted standards and frameworks that is connected to a public blockchain supporting the exchange of electronic trade documents between governments and businesses.

TradeTrust aims to digitalize global trade and eliminate the inefficiencies caused by manual trade documents and verification processes. TradeTrust works to ensure there is legal harmonisation across multiple countries and jurisdiction for legal validity of digital trade documents, and promote internationally accepted standards that facilitates interoperability of digital documents exchanged across platforms.

Most recently, the Australian Border Force (ABF) started a blockchain trial with Singapore Customs and Singapore Infocomm media Development Authority (IMDA) to digitally verify electronic Certificates of Origin (COO).

How DiMuto uses TradeTrust

The Tradetrust verification is integrated onto the DiMuto Platform. Trade documents that are uploaded onto the DiMuto Platform are automatically pushed onto TradeTrust, allowing users and relevant parties to verify the authenticity of their documents.

When a trade document is uploaded on the DiMuto platform, it is identified uniquely by a Document Hash and saved as a signed TradeTrust JSON file – this JSON file serves as a unique fingerprint that is then recorded on the public Ethereum blockchain.

 

DiMuto’s Trade Contract Timeline captures the documents uploaded and our platform automatically creates a TradeTrust identifier that can be easily verified

This record will be visible on the DiMuto platform to users and relevant trade parties, who can then drag and drop this JSON file onto tradetrust.io and verify the file.

Users will be able to see that a DiMuto certificate of authenticity that verifies the document has been uploaded on the blockchain

Due to the usage of the public blockchain, this allows any relevant parties that have this JSON.file to verify the validity of the trade document on TradeTrust, creating greater level of trust in digital trade documents. By integrating TradeTrust onto our system, DiMuto helps to create trust between trade partners and strengthens the validity of the digital trade documents.

This can help government agencies and authorities that issue certificates and want to verify the validity of these certificates.  For instance, agricultural ministries that issue Certificate of Origins, and global certification bodies like the Global G.A.P that is recognized in over 100 countries, can simply utilize TradeTrust verification tool to verify certificates that have been uploaded on the DiMuto platform. Due to the unique identifying quality of the TradeTrust file, as well as the immutability from using the public blockchain, this can significantly reduce the room for fraudulent certification and speed up the time it takes to verify certificates, reducing the friction brought about by physical documents for global trade.

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

COVID-19 and Its Impacts on AgFood Trends in 2021

It is likely that the pandemic will not be resolved overnight in its second year running. While Covid-19 has caused disruptive shocks to global food supply chains around the world at first, more lasting effects of the virus can definitely be felt on the agricultural and agtech landscape for the rest of 2021.

Renewed Focus on Sustainability

Sustainability and sustainable recovery are the latest buzzwords when it comes to discussion on how a post-covid world would look like, given the mainstream thought that climate change may have played a contributing role to the rise of the pandemic – many factors that cause climate change increases the risk of pandemics according to Harvard Chan C-CHANGE.

For consumers, this has translated to an increased focus on sustainable foods and clean labels.

Research by Palsgaard A/S has shown that four in ten consumers view environmental concerns are now more important when making food purchases since covid-19, and that two-thirds of consumers would be more willing to buy products from a company if they knew it used sustainably sourced ingredients.

Focused African American man reading information on packaging. Concentrated bearded guy buying food at supermarket. Shopping concept
Consumer reading food label at the supermarket

At the same time, there has been more consumer demand for clean label foods, foods that are made as naturally as possible with simple, easily recognizable ingredients that are produced in a manner that is healthy for the planet as well.

According to Mordor Intelligence, sales of clean label ingredients are projected to grow 6.75% annually to $51.1 billion by 2024, with the impact of COVID-19 pushing sales figures higher.

This will likely see suppliers and manufacturers ramp up on sustainability in their sourcing, production and supply chain processes, and communicating this to consumers through branding and marketing in 2021 and beyond.

Doubling Down on Food Traceability & “Messy Middle” Supply Chain

Covid-19 food scares have been aplenty since the pandemic’s onset, with China halting imports of European salmon after traces of the coronavirus had been found on chopping boards used for imported salmon at the Xinfadi market, commonly thought to be the epicentre of the initial outbreak.

That caused Chinese consumers to avoid salmon, hitting the industry hard.

Cherries
Fresh Cherries

Most recently in January this year, there were claims on Chinese social media that Chilean cherries contained traces of the virus. The inner packaging of the batch of cherries tested covid-19 positive, and all unsold cherries from the same batch in Wuxi, the Jiangsu Province, have been collected and are ready for destruction, which could potentially result in massive food waste.

Although there still exists much uncertainty over the validity of these claims and the origins of the affected cherries, the whole imported fruits industry in China has been badly affected. In particular, cherry prices have plunged 90% and sellers have to resort to showing certificates of nucleic acid tests to help boost sales.

Thus, blockchain and its application for recording verified, immutable information from all stakeholders of the supply chain will definitely be a contender as part of the solution.

At the same time, product digitization will need to happen in order for food traceability to be fully effective. This gives industry players the ability to confirm the quality of the product as it moves along the supply chain, particularly through the “Messy Middle”.

Fintech For Food

It is no secret that working capital is a source of friction in global food trade. Due to the seasonality of the industry, agribusinesses have significant short-term working capital needs in the form of advances to farmers and huge inventory.

We’ve previously talked about how supply chain visibility is vital for cash flow management of agribusinesses in Covid-19. At the same time, this supply chain visibility also has potential for tapping on the unbanked or underbanked Messy Middle agribusinesses, who often are unable to obtain financing for their trades due to the industry being deemed too risky, too complex and opaque, and provide them alternative financing opportunities.

Technologies like blockchain, digital wallets and e-currencies also help to establish trust and facilitate transparency that break down the barriers to trade financing access for the agriculture industry. These have already made headway in terms of smallholder farmer financing, but the biggest potential lie in the Messy Middle, where the bulk of goods exchange hands and the biggest challenges lie. For instance, this can help small and medium traders and retailers, who often find it difficult to sustain business during covid, to get access to credit.

It is also telling of the potential of blockchain when the likes of governments, such as in Singapore and China, have also recently committed to significant resources to develop blockchain capabilities of their country.

The overall undercurrent theme for 2021 seems to be data, where visibility of flow of goods and flow of money needs to be achieved, so that we can really ensure that our food systems are efficient and visible, and that food is sustainable and safe for both people and planet.

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

The Digital Food Supply Chain: Preparing for Disruption

This article is a part of 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.

An Urgent Need for Digitalization of Food Supply Chains

The digital food supply chain has been in the spotlight for a while now, and we’ve previously talked about the need to digitalize the food supply chain being made even more obvious during the ongoing pandemic, as well as benefits of digitalization (think better cash flow management and better food safety controls). A digital food supply chain would be more resilient to potential disruptions and allow players in the food system to navigate any uncertainties with data-backed decisions.

Full Supply Chain Visibility is Inevitable

McKinsey predicts a future where “digital platforms enable full transparency and traceability across the food value chain—creating an environment in which actors in the value chain can more easily buy and sell to each other, compare prices, and review and rate suppliers.”

According to PwC, food supply chain visibility is also an “increasingly standard expectation” from consumers.

study published by LogisticsIQ states that the digital supply chain market is expected to reach $75-plus billion by 2030, with major drivers of growth entail Big Data, demand for greater visibility and transparency and the adoption of artificial intelligence (AI) and blockchain technologies.

Thus, it seems like a digital food supply chain with full supply chain visibility is no longer a matter of if, but a matter of when.

So what does a digital food supply chain mean? What would it look like for the different players in the food system, and more importantly, how can companies prepare for digitalization so that they won’t be left behind?

The Implications of Digitalization

Supply chain transparency would likely reduce inefficiencies when it comes to the buying and selling of agrifood products, allowing all relevant information to be shared in a timely, verified manner between stakeholders.

For instance, DiMuto’s 4T Suite Solution allows procurement teams, purchasing managers and retailers to physically “see” the quality of every single carton of food products at the point of the packing house before the products are sent further downstream. Not only so, all trade documents are also tagged to each order, so both physical product information and documentation information can be shared between trade partners easily on our platform. Find out how we digitalize each product here and watch our explainer video here.

DiMuto 4T Suite

Supply chain visibility also creates trust between buyers and sellers and helps to facilitate open agrifood online marketplaces. Sooner than later, buyers would expect full traceability down to the individual product level and this would likely become the market expectation, fuelled by expectations of end consumers. DiMuto’s Global Trade Network helps to connect buyers looking for traceable produce to DiMuto-verified produce growers & exporters.

At the same time, transparency could also mean lower returns for traditional intermediaries such as distributors and traders that have traditionally thrived due to market conditions of information asymmetry and lack of trust. Acoording to McKinsey, trading margins of agriculture commodities have been shrinking, dropping from 15 percent in 1998 to just 9 percent in 2018. In lieu of lower margins, it is now more important than ever for agrifood intermediaries to be cost-competitive and reduce unnecessary losses. This can be achieved by adopting digitalization technologies like DiMuto’s 4T Suite Solution that can help reduce food wastage from trade disputes over quality.

Learn more about how DiMuto has helped a produce buyer to simplify the trade dispute resolution process here.

Thus, with the advent of digitalization, it is important for agrifood companies to adopt holistic trade technologies that will prepare them to navigate and overcome future disruptions.

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.

The Future of Food Traceability

One of the key benefits of digitalizing agrifood supply chains is being able to trace and track food products more easily, thus having more visibility of food supply chains. In lieu of food safety scares, food fraud and food sustainability, food traceability has become a prominent area of focus for many food industry players, food and health authorities, as well as solutions providers.

Consumers Want Greater Levels of Traceability

There has been a burgeoning focus on food journeys and origins as consumers now want to know more about the origins of foods they’re purchasing and consuming. A survey done by the International Food Information Council (IFIC) Foundation found that over half of US consumers surveyed indicated that recognizing the ingredients and understanding where food is from as key factors that affect purchasing decisions. In the UK, 8 in 10 consumers check the origin of their food when purchasing them – ensuring that their food originates from where it is advertised as coming from is important to them.

And the need for traceability and focus on food origins is likely to continue growing. The Center for Food Integrity predicts the number of consumers concerned about the origin of their food will hit nearly 50 million by 2021, with a significant number of them from the younger generation, who are typically more concerned with ethical food choices.

Information about origins and methods of production, with its storytelling ability, comes with huge marketing opportunities to shape the narrative of our foods. Research conducted by the University of Copenhagen’s Future Consumer Lab found that consumers tend to think food tastes better when they know where it came from and how it was made.

Thus, there is a real need for players in the food ecosystem such as food manufacturers, produce growers and suppliers, retailers to meet the demand for such information about their products.

Food Safety Concerns Continue in Asia

According to the FAO, food safety continues to be a concern in Asia. The infant milk powder fraud in China back in 2008, otherwise known as the melamine milk crisis, resulted in the death of at least six babies and a swift response to improve food safety regulations and practices throughout Asia. During the world’s first Food Safety Day in 2019, FAO said that the Asia-Pacific region has a poor track record when it comes to preventing foodborne illnesses, resulting in the deaths of 225,000 people each year, and affecting over 275 million people annually. This shows that there is much to be done still when it comes to food safety.

In Singapore, food safety is also top of mind. The government set out a 30 by 30 mandate in 2019, aiming 30% of Singapore’s food supply has to be homegrown to bolster its food security by 2030. A new statutory board, Singapore Food Agency, has also been created to focus on food safety and food security.

Food safety scares also carries heavy burdens on companies –  Food recalls cost companies an average of $10 million in direct costs alone and reputational damages. Consumers are wary to purchase products that were previously recalled or deemed unsafe for consumption –  A Harris Interactive survey shows that 16% of consumers would never buy a recalled food product again, and 17% of people impacted by a recall would not buy any product from the same manufacturer.

Challenges of Food Traceability Due to Globalized Supply Chains

Between 2000 and 2016, world agricultural trade increased more than threefold in value, rising to USD 1.6 trillion in 2016. While this burgeoning trade provides more food options on our plates, it also creates new risks. With longer and more complex supply chains giving rise to the “Messy Middle”, tracking from farm to fork requires increased scrutiny and accountability throughout the process.

The difficulty here is that each stage of the supply chain depends on one another for full visibility. One weak link could break the whole flow of information, which traceability heavily relies on. It is more difficult to ensure that ingredients and finished products are safe to eat when the responsibility for food safety is spread over many different business partners, as most do not know each other and information is all over the place, yet they all have to work as one to ensure food remains free from contamination at every stage of the supply chain.

Traceability Technologies

With the challenges of food traceability, several traceability technologies have popped up to tackle the problem. There are four aspects to traceability:

1. What is The Data Being Captured 

Details about the product information such as origins, company involved, product health certificates and certificates of origins should be captured.

At the same time, product information is closely related to trade information – i.e. purchase orders, sales orders, invoices all should be captured alongside the product information such that we can easily track and trace the movement of the product as it exchanges hands.

2. How is the Data Being Captured

It would be infinitely complex to try and capture all this information at every single stage of the supply chain. A clever way to capture essential information would be to capture the data at a point of aggregation in the supply chain. For instance, DiMuto helps packing houses to digitalize their fresh and frozen produce, and capture relevant product and trade information for each product and it has worked because packing houses would have the relevant farm information from the farms they purchase from.

DiMuto technology used at the largest Thai Durian exporter’s packing house

Then the question of how to efficiently digitalize each product and associate to the data that we are capturing arises. The operational aspect of tagging and tracking each physical item also comes into question as every company has different operations across the various markets.

Firstly, easy-to-scan produce codes have to be implemented to allow easy, digital identification of products. Universal standards have to be created and adhered to so that the identification code can easily be used and read by all partners in the supply chain, including consumers. For instance, GS1, the most widely-used supply chain standards system in the world, has introduced a GS1 QR Code standards that DiMuto has adopted.

Then, using our propriety DACky machines, DiMuto is able to 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. Thus linking the physical product to the relevant digital data for traceability of both product and trade.

3. Where is the Data Stored

Supply chain players have turned to blockchain technology as a new, effective way to build trust due to its ability to validate, record, as well as distribute transactions in immutable, encrypted ledgers.

DiMuto uses blockchain, AI and IoT in our Track & Trace platform to provide supply chain partners full visibility. It is important to note that blockchain does not prevent errors, but instead places responsibility on the supply chain players with regards to what they declare. What anyone declares, whether it is right or wrong, voluntarily or not, will be analyzed and processed thanks to the immutability of the source of each data. Thus, we are able to show who made the error, and what was the error, if any, in each trade.

4. How Can We Communicate the Data Effectively? 

At the same time, besides solving traceability amongst B2B supply chain partners, traceability solutions have to link back to the end consumers who are ultimately the ones demanding for higher transparency. This is where the easy-to-scan codes come in, as the DiMuto QR labels are easily scanned by consumers to access the relevant information about the product.

We also provide a consumer marketing solution that can help companies to brand their products.

DiMuto Consumer Solution Marketing

DiMuto Consumer Marketing Solution

A Need for Applicable, Interoperable & Customer-Centric Solutions

At the same time, we cannot ignore the fact that many companies will choose to adopt in-house solutions for traceability. However, given the interconnectedness of our agrifood supply chain, solutions that will work in a scalable manner will have to be interoperable and be able to speak to different systems while still maintaining the truth. That is why DiMuto solutions are interoperable, and we work with IBM Food Trust such that our customers can easily provide important information mandated by major retailers like Walmart and Carrefour while using the DiMuto system.

The application of traceability technology has to be well thought out. Data being captured, shared and verified with the blockchain, can now be used for a multitude of purpose – trade financing, data analytics, QR marketing, trading with new trusted partners and more. That is why DiMuto offers a 360 trade solutions so that we can help our customers better their trade from all aspects.

Food Traceability is a promising and exciting space. Allied Market Research has predicted that the global food traceability market will reach some US$22.3bn in 2025, growing 9.3% from US$11mm in 2017. Thus, it is likely we will see new developments in Food Traceability in the next few years.

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.