The future of food production will connect local communities to local producers, on a digital platform, according to Justin Frank, Marketing and Strategy head, Australia and New Zealand, for CHEP. Mr Frank warned audience members that perishables is a 'battleground', and offered ways of creating value through collaborative networks during his talk at the PMA A-NZ Fresh Connections Conference Day,.
How can sharing economies disrupt?
Uber Taxi and Air BnB were used to explain how digital platforms are disrupting the economy. Audience members heard how Air BnB added the same number of rooms globally in two weeks as the Mariott Hotel did worldwide in a year (30 000). “It’s happening in the produce industry as well. It’s happening in Australia too,” Mr Franks said. “The different lens I’ll bring to it today is that these examples have all been built on collaborative networks.”
“The digital platforms are supported by infrastructure and architecture: 3G and 4G networks that are always accessible, always open, always available for people to do business on. That’s not far off what we do as CHEP with over 75 points of presence in Australia, and over 20 in New Zealand. Where we actually supply a network,” Mr Franks explained.
Mr Frank then told how globally CHEP works as a standardized, unitized, commoditized network that allows innovation to go over the top of it.
Infrastructure was linked to increased consumer choice, another theme running throughout the presentations during conference day. “They [customers] want better quality. Because they have more choice they want the quality of produce that they can get from a local market, at a cheap price,” Mr Frank said. “The same rings true for retailers. Ultimately they want the best quality that they can buy for their stores, at the lowest supply chain cost. It’s all linked. The perishable segment within the retail store is a huge battleground that drives loyalty if you get it right.” Getting that right involved connecting the farm to the store, of the ‘food to the floor’.
Case studies in collaboration
Mr Frank’s also covered how CHEP has assisted customers throughout the supply chain.The first case study was in Australia’s favourite fruit, bananas. Mr Frank told how CHEP’s sister company in the UK, IFCO, worked with supermarket chain ASDA to introduce a curved crate for transporting bananas to avoid neck rub and rot. “ASDA started using the crate back in 2011, 2012 and they’ve seen significant reduction in waste in their supply chain. Not just waste of fruit, but also waste in terms of cardboard corrugate at over 400 stores across the UK,” The audience heard.
The learnings from IFCO were adapted for the Australian environment, and a new crate was designed with ventilation for sufficient airflow. “We’ve kept the innovation from IFCO to have the curved walls, the sides, and the lift lock mechanism for ease of use. We believe this crate will revolutionise the industry,” Mr Frank said.
The second case study was Apples, for Newton Orchards. “They found that they were having significant handling within their supply chain,” Mr Frank said. “We managed to get them over to bins, which can be filled directly from the resizer. That means significant reduction in handling.” The apples then go straight into chillers, so core temperature can be reduced faster. “The bins got 14% more fruit in them and the fruit got to the retailer in a better quality at a reduced cost,” Mr Franks said. “It might not be the widgets themselves, but it’s working to really unlock value. That value comes about by people coming together and saying ‘I’ve got a challenge, will you work with me on it?’”
The final case study was Avanza Avocados in New Zealand. Avanza worked with CHEP and IFCO to bring 30 000 crates over to New Zealand, with the American sized footprint pallet to send an oversupply of avocados to the US. “That supply chain was opened up. That had to be done in very quick time, because obviously it’s a perishable product, and we did that to really open up the market for them,” Mr Frank said.
Mr Franks ended his presentation by reminding the audience of how important an eco system to bring suppliers, people and products together. “It can all come together to collaborate. It helps us to allow the efficient interface between your company, and the retailers. The adoption of commoditization and standardization, that allows for the ability to innovate over the top of it,” Mr Franks concluded.
