03/08/2023 – Technology / Studio Graphene / Inflation / Supply Chain / Innovation
EXPERT COMMENT: Tech innovations are key to countering food price inflation impacts
Ritam Gandhi – Director and founder of Studio Graphene – outlines what tech can do to support F&B businesses in tempering the impacts of food price inflation across the supply chain.
Food price inflation has been a prevalent theme of 2023, as consumers and businesses alike were forced to adjust their outgoings to combat strained budgets and swelling overheads. Encouragingly, food price inflation seems finally to be trending in the right direction, dropping from 19 per cent in April to 18.3 per cent in May – however, the underlying causes of that inflation (the Russia/Ukraine conflict, Brexit and production setbacks) have not gone away, meaning the return to normalcy may yet take considerable time.
Businesses may not be able to wait that long for prices to drop, and so must be willing to take matters into their own hands. They may not be able to lower wholesale prices themselves, but by optimising operational efficiency and minimising waste, they can lower their own overheads and even pass some of those savings on to beleaguered consumers. The key to this is embracing innovation, and the best place to look is the field of technology.
Better production with tech
Technology has the power to improve systems and enable greater productivity, and this can be true of every step of the food supply chain. Players in production, transportation, storage and even retail have already implemented some tech-based solutions to level themselves up digitally. Still, in order to tackle this crisis, they will have to go even further.
At the root of most food production is agriculture, an area that has been transformed heavily by innovation – mechanisation, irrigation, and even genetic modification have all massively increased the yields of commercial farming operations. Despite this, tech still has the potential to support agriculture businesses.
Cutting-edge technology, such as drones and remote sensors, can play a role in further optimising agricultural output. This precision farming improves crop yields through data gathering and analysis, allowing operations to maximise output with the minimum resources.
Tech can further improve efficiency and profitability through novel farm management software, optimising inventory management and identifying systemic blind spots. Energy is a major element of farming overheads, but investment in sustainable energy sources such as solar and wind can help keep down farms’ costs – and carbon emissions to boot.
Transportation and storage upgrades
Storage and transportation both factor heavily in the final retail prices of food, so both are fruitful avenues for tech-based intervention to food price inflation. Optimising these processes to reduce waste and increase productivity could have a real impact on consumers, as well as the businesses themselves.
One such avenue would be the Internet of Things (IoT), which along with the blockchain, can improve both transparency and efficiency throughout. Smart IoT-powered systems can enable real-time monitoring of food storage conditions, such as temperature, humidity and shelf life. This data allows for more efficient energy usage and minimised waste, lowering overheads and promoting sustainability.
Using tech to improve monitoring can also benefit transportation businesses, ensuring consistent temperatures within vehicles and minimising spoilage. By starting with a light framework, these businesses can test the effectiveness of IoT solutions for their business without significant investment, and then choose to scale up if the benefit outweighs the cost.
Those savings will allow both transportation and storage businesses to lower their overheads and become more profitable while further reducing retailers’ overheads and lowering consumer prices.
Finally, in retail, the benefits and savings of a tech-forward approach can be felt most directly by consumers. Lowering overheads by improving storage efficiency and monitoring allows businesses to profit on lower prices, and through the use of data analytics, that pricing can be continually optimised.
Major retailers that offer dynamic pricing by leveraging data analysis and machine learning are able not only to provide consumers with the best prices but also to adjust prices specifically to consumer preferences to influence loyalty and guarantee competitiveness in a crowded market.
Better prices through tech
The potential for technology to tackle food price inflation is considerable, and this is true across the entire food supply chain. By embracing innovative technological solutions, businesses can establish streamlined and efficient processes that ensure long-term profitability and sustainability.
This approach not only helps mitigate the effects of food price inflation but also enables non-tech companies to harness the advantages of tech innovation. Just as technology companies constantly strive for improved solutions, businesses in other sectors must actively adopt and utilise these advancements to their fullest extent.
Ritam Gandhi is the Founder and Director of Studio Graphene – a London-based company that specialises in the development of blank canvas tech products, including apps, websites, AR, IoT and more. The company has completed over 250 projects since it was established in 2014, working with both new entrepreneurs and product development teams within larger companies. www.studiographene.com
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