Food is ripe for an upgrade: how emerging tech is transforming an industry
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In 2018, Americans wasted over $165 billion of food - 40% of the entire US food supply (CNBC). In the meantime, 40 million Americans were listed as "food insecure" (USDA). What's creating this waste? According to Maersk Growth, 75% of food waste happens before product reaches retail shelves. The culprit: inefficiencies created by poor or missing data. There are four emerging technologies that can save billions of dollars and reduce financial, reputational and health risks. They include IoT sensors (to gather data), 5G networks (to connect that data), blockchain data ecosystems (to share that data), and artificial intelligence (to operationalize that data). In this keynote from the 2019 Emerging Technologies Conference, Transparent Path CEO Eric Weaver shares how these four emerging technologies are beginning to work together to leverage data in ways that identify and limit waste earlier in the supply chain.
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Food is ripe for an upgrade: how emerging tech is transforming an industry
- 1. FOODISRIPEFORANUPGRADE Howemergingtechistransforminganindustry ERIC WEAVER • @WEAVE • 2019 EMERGING TECHNOLOGIES CONFERENCE • MSP
- 3. 5 BIG SYSTEMIC ISSUES ARE IMPACTING THE FOOD INDUSTRY HERE IN THE U.S.
- 4. ISSUE#1 TRACEABILITY IS TOUGH 9 of 10 farms are small family farms & generate 80% of world’s food supply WORLD RESOURCES INSTITUTE No records, paper records, human error GLOBAL FOOD TRACEABILITY CENTER A single import shipment uses 30-100 paper documents on average CARGOSMART/IBM FOOD TRUST
- 5. ISSUE#2 ENORMOUS, INCREASING COMPLEXITY IN OUR FOOD SUPPLY 80% of seafood, 50% of fruit, 40% of vegetables are imported FDA 75% of all food loss occurs before retail MAERSK GROWTH, 2018 Avg 7 major changes to PO while enroute ITRADE NETWORK, 2014
- 6. MYPERSONALMISSION ANNUAL FOOD WASTE IN THE US $218BNRDC 1.3B tons 141T caloriesFAO UNITED NATIONS
- 7. WASTED WATER, ENERGY, OIL & LABOR 45T gallons (24% freshwater) WORLD RESOURCES INSTITUTE 2% of energy 350M barrels UNIVERSITY OF TEXAS
- 10. ISSUE#4 CONTAMINATION US GLOBAL SICKENED 48M 600M HOSPITALIZED 128K ??? DIE 3,000 420,000 WORLD HEALTH ORGANIZATION, 2017
- 11. ISSUE#5 NO SAFETY NET <2% of US food imports are inspected Checks for bio contaminants, no chemicals/metals Extensive bribery among inspection teams TEXAS A&M UNIVERSITY STUDY, 2014
- 12. Why do these problems exist? • No one has time to add data collection to their day • Data still largely resides in silos • Global supply chain hasn’t caught up with technology that’s available • Traceability is slow • Companies often use leverage to push blame elsewhere • Margins are razor-thin
- 13. GATHERDATA(IOT) REDUCESACQUISITIONCOST CONNECTTHEDATA(5G) ATSCALEACROSSMILLIONSOFDEVICES SHARETHEDATA(BLOCKCHAIN) ANDITSBENEFITS OPERATIONALIZETHEDATA (AI) LEVERAGINGAIFORINSIGHTS Upgrading foodrequires four emerging technologies
- 14. ANDFINALLY… How do we get people to change? In order to incent people to adopt new tech and processes, the business must provide FINANCIAL & REPUTATIONAL REWARDS for data transparency and sharing. We need to reward people for collaborating.
- 15. Gathering the data with IoT sensors
- 17. WHERESENSORSAREGOING Printed powered sensors make the capture of environmental data easy, cheap, more granular and more sustainable CONTAINER LEVEL - 2016 PALLET LEVEL - 2019 PACKAGE LEVEL - 2021
- 18. GATHERINGTHEDATA A two-layer ProofTag sensor: QRcodefor productlookup, andan environmentally friendly printed electronics substrate
- 19. Connecting the data with 5G
- 20. CONNECTING THE DATA 5G creates the web that enables interoperability • Scalability: allowing millions of sensors to communicate simultaneously • More data to verify regulatory compliance • Inter-device communication will drive cost out of the supply chain • Interoperability: by inter-connecting wifi, Bluetooth and NFC devices and servers, we will have new levels of routing and managing data for auditing, analysis and storage • Connectivity to AI: getting more data into more intelligent apps more quickly to provide greater operational insights
- 21. CONNECTINGTHEDATA Where are we with 5G? • Three main applications • Mobile broadband/fixed wireless • Mission-critical comms • Massive IoT • Lots of spectrums = lots of confusion • Marketing BS • Slower rollout for rural areas • Most device innovation coming via startups; lots of duds out there but time-to-market is compressed — 2020
- 22. Sharing the data with a blockchain data ecosystem
- 23. SHARING THE DATA Blockchain is built for a world without trust TRADITIONAL DATABASE Centralized data controlled by one company (e.g., Costco, Kroger, etc.) BLOCKCHAIN DATABASE Data is stored across all the computers accessing it. Everyone contributes and can see every transaction. No one entity controls the data. It cannot be changed (nor hacked).
- 24. SHARINGTHEDATA During a recall, isolated databases slow the forensics required to identify the source of the problem. SUSPISH FARMS 20 BLACK ANGUS SOLD TO PACIFIC 8/20/2018 “NON-GMO FEED, HUMANELY RAISED” SNL LOGISTICS 20 BLACK ANGUS PICKED UP 8/20/18 DELIVERED TO PACIFIC 8/21/2018 NO INCIDENTS SLEEPYTIME TRUCKING CO. 40 CARCASSES PICKED UP 8/22/18 DELIVERED 8/24/2018 “CONSTANT 40°F” PACIFIC PROCESSORS 20 BLACK ANGUS ARRIVED 8/20/18 SLEEPYTIME PICKED UP 8/22/18 SLAUGHTERED 8/22/18 LIBBY’S (CONAGRA) 40 CARCASSES ARRIVED 8/24/18 SOLD TO SAFEWAYCANNED 8/28/18 SAFEWAY WAREHOUSE 550 CASES CORNED BEEF DISTRIBUTED 9/18/18 PURCHASED FROM LIBBY’S 9/12/18 SAFEWAY STORE 1508 40 CASES OF SIGNATURE SELECT SOLD TO CUSTOMER 9/28/18 ARRIVED 9/20/18
- 25. INABLOCKCHAIN-ENABLEDSUPPLYCHAINECOSYSTEM… Everyone has the same real-time data and can benefit. Fast tracing of issues, and faster reduction of risk. SUSPISH FARMS 20 BLACK ANGUS SOLD TO PACIFIC 5/20/2019 “NON-GMO FEED, HUMANELY RAISED” SNL LOGISTICS 20 BLACK ANGUS PICKED UP 5/20/19 DELIVERED TO PACIFIC 5/21/2019 NO INCIDENTS PACIFIC PROCESSORS 20 BLACK ANGUS ARRIVED 5/20/19 SLEEPYTIME PICKED UP 5/22/19 SLAUGHTERED 5/22/19 SLEEPYTIME TRUCKING CO. 40 CARCASSES PICKED UP 5/22/19 DELIVERED 5/24/2019 “CONSTANT 40°F” LIBBY’S BRAND 40 CARCASSES ARRIVED 5/24/19 SOLD TO SAFEWAYCANNED 5/28/19 SAFEWAY WAREHOUSE 550 CASES CORNED BEEF DISTRIBUTED 6/18/19 PURCHASED FROM LIBBY’S 6/12/19 SAFEWAY STORE 1508 40 CASES OF SIGNATURE SELECT SOLD TO CUSTOMER 6/28/19 ARRIVED 6/20/19
- 26. BEYOND $10M Consumer lawsuits Government fines Lost sales Share price slide Employee retraining Policy changes Reputational impact $10M AVG DIRECT COSTS Investigations Disruption of operations Crisis management Reverse logistics Product destruction Notification costs FOOD MARKETING INSTITUTE; GROCERY MANUFACTURERS ASSOCIATION, 2016 TRACEAPROBLEMFASTERANDSTOPRECALLSEARLIER Recalls cost an average $10M — plus
- 27. SHARING THE DATA Where are we with blockchain? • Third-generation chains removing speed & power issues • “Blockchain for food”: so much PR! • Tokens distract from the mission • General conflation with crypto continues to stymie investments and enterprise adoption • Hitting both startups and investors • However, use cases and enterprise efforts continue to move forward
- 28. BRINGINGITALLTOGETHER Pallet, case and item sensors collect and share time, date and enviro data at each step in the supply chain PHYSICAL SUPPLY CHAIN FLOW SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR CLOUD COMPUTE SERVER TEMP CLOUD STORAGE transaction layer 5G, OR MVNO
- 29. TOP-LINEOPPORTUNITY If you could see the truth about your food’s origins and provenance, would you pay more? PHYSICAL SUPPLY CHAIN FLOW SENSOR 5G, OR MVNO SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR CLOUD COMPUTE SERVER TEMP CLOUD STORAGE PENTA PUBLIC CHAIN transaction layer PENTA PRIVATE CHAIN PREDICTIVE ANALYTICS SERVER VIDEO CONTENT CDN PRICE PREMIUM FOR TRANSPARENCY & PROVENANCE LOOKUP; “SHARETRADE” REVENUE STREAMS CONDITION ALERTS REDUCE WASTE & RISK: ANALYTICS CREATE EFFICIENCIES PROOFSCAN MOBILE APP ADMIN DASHBOARD PARTNER DASHBOARD CONSUMER-FACING TOP-LINE OPPORTUNITY SUPPLY-CHAIN-FACING BOTTOM-LINE OPPORTUNITY
- 30. Operationalizing the data with AI/ML
- 31. BOTTOM-LINEOPPORTUNITY:REDUCERISK,FRAUD,ILLNESS Upstream alerts stop downstream waste & illness; shared real-time data can be processed via ML/AI PHYSICAL SUPPLY CHAIN FLOW SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR SENSOR CLOUD COMPUTE SERVER TEMP CLOUD STORAGE transaction layer PENTA PRIVATE CHAIN PREDICTIVE ANALYTICS SERVER CONDITION ALERTS REDUCE WASTE & RISK: ANALYTICS CREATE EFFICIENCIES ADMIN DASHBOARD PARTNER DASHBOARD SUPPLY-CHAIN-FACING BOTTOM-LINE OPPORTUNITY 5G, OR MVNO
- 32. OPERATIONALIZING THE DATA Individual players can apply AI to the chain for forecasting and resource planning “When should I expect the next shipment?” “When should I put in the next order?” “What kind of logistics do I need to line up?” “How many reefers will I need in November?” “With flooding in Brazil, should I line up other sources?” “I am not hitting my service level agreements.” “What size herd should I be investing in?”
- 33. Encouraging adoption by rewarding good behaviors
- 34. INCENTINGGOODBEHAVIOR ProofScore: the more information you share via sensors, certifications, even video, the higher your ProofScore
- 35. ENABLINGCOMPLIANCE ProofScore: a “credit score for transparency” Calculated based on amount of certifiable information shared with consumers and supply chain partners Sensor-based environmental data, verifiable certifications (fair trade, organic), and behind- the-scene videos all increase a product’s ProofScore. Why ProofScore? • Promotes open sharing of food origin, logistics and environmental data • Dissuades bad or “opaque” actors • Builds consumer trust • “Transparently” produced food commands higher prices; 94% of consumers willing to pay more for visibility into their food LABEL INSIGHTS, 2016 • Premiums can be used to incent supply chain players OUR PROOFSCAN™ MOBILE APP
- 36. “Sensors!5G!Blockchain!AI!Voluntarytransparency!YOUWANT EVERYTHING.” “IoT? 5G? Blockchain? AI? YOU WANT THE MOON.”
- 37. Our first PoC: Michigan Apples April 2019 CUSTOMER: Jack Brown Produce, Sparta MI GOAL: test numerous sensor candidates, connect candidates to a blockchain, and create complete trace from retailer to farm SENSORS: Digital Matter (South Africa); Roambee, Avery Dennison, Identiv (US); CCP (India) BACK END: BigChain, InfluxDB, Penta blockchain, AWS Cloud, Grafana visualization engine DESTINATIONS: Successful traces to Publix DC (ATL), Horrocks Markets (BTL); Andrews Brothers (DTW).
- 42. Key learnings • LTE & Bluetooth workable in the field; RFID & NFC not workable. • Some radio sensors will not penetrate a refrigerated trailer. • We don’t need all the bells and whistles. Simple GPS, date/time, temp, humidity will do. • People systems: drivers will need incentives to comply. • Food safety regs mean sensor placement has limitations. • The holy grail of traceability (being able to trace upstream of commingling) is possible (!) via APIs with legacy inventory software
- 44. 2018 McDONALD’S CYCLOSPORA 507cases, 16states, 24hospitalized Time to trace: May 20-July 30 $6Bin market cap erased over six weeks
- 45. 94%ofUS consumers say it’s important thatbrands are transparent aboutwhatis in foodandhow it’s made.