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Thinking

Consumers lead the digital charge in the agrifood industry

Food as fuel: it's a necessary and inescapable component of life. It's a practical commodity that, quite literally, we are unable to live without since our bodies simply do not have the integral sustenance to survive.

While food is nourishment, it can offer a lot more for most people, beyond being an essential requirement for life. Food can be a connection to certain people and places, a gathering of family and community, a trend, an income, a story, or a form of self-expression.

With an estimated future global population of more than 9 billion by 2050, the global demand for food will continue to rise and with great expectations for human health benefits.

The agrifood industry faces the ever-increasing challenge of growing, transporting and processing enough food to feed our growing population well. Embracing a digital future by the agrifood industry will be imperative to produce and manufacture enough food to meet consumer’s needs while also reducing the impact on our planet. This was the theme of recent research undertaken by Aurecon and Australia’s independent scientific research agency, CSIRO.

In a series of thinking papers, Aurecon’s Dr Ingrid Appelqvist, Client Director Manufacturing, and Hester de Wet, Digital Lead Energy, Resources and Manufacturing, present ideas from the research that address new frontier markets, technological advances, digital disruption, environmental impacts and changes in consumer demands.

This first thinking paper explores how changing consumer demands will lead digital changes in the agrifood industry.

How much is global food demand rising?

The International Association of Agricultural Economists estimate that food demand is expected to increase anywhere between 59 and 98 per cent by 2050.

So, there are enormous problems to be addressed:

  • A world population of more than 9 billion people, plus pets, by 2050
  • Climate change and global warming
  • Changes in consumer demand for less processed foods and more locally-sourced produce
  • Limited natural resources
  • Food waste
  • Human health

This will shape agricultural markets in ways we have not seen before, as farmers worldwide will need to increase crop production, either by increasing the amount of agricultural land to grow crops or by enhancing productivity on existing agricultural lands, and by adopting new methods like precision and intensive farming. However, the ecological and social trade-offs of clearing more land or applying more intensive farming practices are often quite high.

Advanced logistics, transportation, storage and processing are also crucial for making sure that food goes from where it grows in abundance to where it is needed, especially as the world population becomes more urbanised. An increase in transportation and processing could further contribute to greenhouse gas emissions, energy usage and food wastage.

Changing consumer demands

Today’s consumers are no longer satisfied with not knowing where their food has come from. Information technology has increasingly enabled the consumer to access, share and validate information about products and gain an understanding of what happens to their food across the supply chain from paddock to plate.

Now, more than ever, they’re sensitive about how food is grown and how it is processed, with a greater awareness and concern for the ethics and environmental footprint of agriculture itself. The impact of foods and diets on human health is also of high concern among consumers.

We’re seeing more discerning choices for what makes it into the grocery trolley that are influenced by how people feel about where food comes from, how it’s grown or raised, and its overall impact not only on the individual or their family, but on the community and world as well.

We believe that, ultimately, it will be information-empowered consumers that drive aspects of digital disruption in the agrifood industry. They will want assurance on the safety, provenance and traceability of their food, as well as to know how ethically and sustainably their food is grown and treated, and its global footprint.

The megatrend of the ‘choosy customer’ is seeing a shift from mass to customised production, with a focus on food becoming more personalised and having outcomes in better health for people. As consumers become more digitally capable and start to demand bespoke food experiences, the more digitally mature manufacturers will respond to this gaining the competitive advantage.

With a powerful computer in the pocket of almost all consumers, the power of the smartphone or tablet is changing the agrifood landscape exponentially. Understanding food, ordering food, watching it, researching it and sharing photos of it, occurs within a few fingertip taps.

With a strategic approach to embrace digital technology, producers, manufacturers and retailers are well placed to ride the waves of customer demand as they use advanced materials, sensors and data analytics to produce bespoke products or services.

Digital innovation and advancement in the agrifood industry will also create traceability for consumers as they continue to learn how, where and when their food is grown and processed.

Managing food waste

Did you know that up to one-third of food produced is wasted? Consumers are becoming aware of food wastage and the need to use what they’ve got and reduce what they throw away. This also has an impact on reducing waste sent to landfill and household expenditure on excess food.

The issue of food waste and limitation of our natural resources, experienced along the food chain, can also be better solved with data capture and management that comes from a digital view of the entire value supply chain.

This technology is allowing us to track, analyse and understand the way our food system works to help reduce the amount of food waste and greenhouse gas emissions.

Change or be left short-changed

The wheels of digital change in the agrifood industry have started to turn for a transition to a high-tech future. However, the industry hasn’t kept pace with other sectors, so there are plenty of digital disruption opportunities to reach for. Those who don’t embrace the future will lose customers and be left behind. What does the industry need to do?

Here’s what the research study found:

  • Have a digital vision that is closely aligned with business strategy
  • Use data analytics in an intelligent and effective way
  • Incorporate digital food chain technologies such as biotechnology, robotics, remote sensors, digital twins and artificial intelligence (AI)
  • Use sensors and data to understand consumer demands and respond to consumer trends
  • Digitally upskill the labour force

There are opportunities along the agrifood industry value chain to embrace digital disruption and jump on the digital curve. Aurecon and CSIRO are already working with clients to plan for, and introduce, digital disruptive technologies into their agrifood industry projects, to increase crop and livestock yields, incorporate sustainability, introduce new manufacturing and digital technologies, increase automation, pinpoint efficiencies and decrease costs.

There is no need to jump into buying the most advanced technologies and then realise it’s not fit-for-purpose. Instead, organisations can take small steps to digital investment and become bolder as advantages evolve. Progress, however incremental, is vital. 

We leave you with one question: What does food mean to you?


About the authors

Dr Ingrid Appelqvist is a food material scientist with strong multidisciplinary interests in reformulating food to developing a healthier and more sustainable food supply for the food industry and consumers. She has led research projects in developing novel healthy food using alternative plant-based proteins, which included reducing the carbon and water footprint of the products. She also developed research in personalised food based on the human genetic blueprint and using individual biometric data from wearable technology. She is currently Aurecon’s Client Director for Manufacturing.

Hester de Wet is a chartered electrical engineer with industry experience ranging from mining, transmission and distribution systems, renewable energy, and civil aerospace to construction. She has worked in countries throughout the world with a focus on project management, design management, business strategy and innovation across the complete system life cycle, from research and product development to on-site project delivery. She leads the digital strategy for Aurecon’s Energy, Resources and Manufacturing market, focusing on digital solution implementation to solve key challenges for our clients.

 
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