Revolutionary role for ‘big data’

by Morton Sosland
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Morton Sosland

In a paper making the case that the packaged food industry has much to gain from “big data,” McKinsey & Company cites the industry sector engaged in processing agricultural commodities as perhaps the main beneficiary. Since flour milling and baking are both at the middle-to-upper position in the food chain such a finding by this highly regarded management consultant not only merits study but immediate adoption. As an industry that is more and more aware of how digital technologies are reshaping “consumer decision journeys,” grain-based foods should be eager to examine the promise of this revolutionary change in both the downstream and upstream parts of the food industry.

Downstream, of course, refers to agricultural production. It, too, is singled out by McKinsey as an area where untold benefits lie ahead from application of digital technologies. The paper points to the efforts under way to allow producers of crops like wheat to maximize production by the application of new data on climate variations and the relevance of what is called precision agriculture. It points to the immense increases in production that are available in both the dimensions of crops obtained per acre but also by reducing the sizable losses that now plague production. Noting that halving current global post-harvest losses would produce enough food to feed a billion more people, McKinsey also points to savings that total $940 billion from such endeavors.

Pointing to the large investments currently being made in precision agriculture to make such advanced farming attractive, McKinsey says sensors being placed in fields to determine irrigation, fertilizer and chemical application levels promise farmers the ability to manage crop growth. Other digitally-enhanced approaches affect control of payment systems to make food chains increasingly efficient. Automated detection systems will be important to guard against deviations in planned growth rates or quality of maturing crops.

When it comes to factors affecting procurement decisions for wheat and other major crops utilized by processors, the study holds out the promise of increased sustainability as well as economy. These digital advances in monitoring crops would allow millers and other food manufacturers to choose the best regions to source from and also how to adapt crop buying to weather-related and quality considerations. These same data should be helpful to a region or a nation in determining what mix of crops will make for an ideal agricultural portfolio.

Much is also to be gained from applying digitalization to avoiding potential bottlenecks of critical equipment. Along the same line is the way these data optimize fleet management for the movement of agricultural crops, as well as for shipping processed products like flour, and the ultimate downstream delivery of bread. McKinsey says transport times may be halved by improved routing, outdoing the average gains of 10 to 20 per cent from coupling agricultural transportation with in-field sensors.

It should be no surprise that McKinsey has included systems meant to guard food safety as essential to how it sees “big data” making for a vastly different food system in the future. Food scanning is a vital part of any food marketing and production system, not just to assure safety and quality but to provide guidance for consumers. It makes the case for new systems like sensors that would be swallowed by individuals to provide guidance on what is being consumed or could be used to measure the impact of a meal on the body before consumed. The potential market for such scanners is estimated at $1 billion by 2020, especially with the power to trace a food along its chain.

The latter technology, the consultants say, could be valuable to demonstrate to consumers the reality behind marketing. It would be an effective way of responding to increasing consumer skepticism about food marketing claims. These steps make “big data” not just important at food’s source in the fields but along “the entire journey from field to fork.”

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