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Highlights
- Real-time monitoring of food quality across the food supply chain is now table stakes.
- Freshness monitoring is critical to lower operational costs, drive regulatory compliance, and improve customer satisfaction and sales.
- An effective way to monitor freshness is to systematically progress from data analysis and modelling to real-world implementation and optimization.
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Why is freshness monitoring important?
Freshness often contributes to the perceived value of a product and is closely tied to customer loyalty.
Customers walking into stores expect apples to be crunchy, meat to be fresh, and yogurt to be firm and creamy. With freshness being a major purchase driver, the onus of ensuring perishables reach stores intact without losing form, flavor, and nutritional value rests squarely on retailers. Additionally, regulatory compliance increasingly mandates retailers to keep track of the quality of perishables. This poses a huge challenge since the cold supply chain often spans several hundred miles, or thousands in the case of fresh produce, travelling across borders, ports, and warehouses before finally making it to the stores.
As fresh foods and vegetables constitute the major share of food wastage in retail, real-time monitoring of food quality across the food supply chain is now table stakes.
Improving supply chain availability
Fresh farm produce requires a holistic approach that goes beyond just storage for better value realization.
Unlike non-perishable categories with longer shelf life that can be stored in distribution centers till they are ready for pickup, fresh foods and produce need to move as quickly as possible across the supply chain. This requires a holistic approach that goes beyond just storage for better value realization (see Figure 1). In addition to maintaining optimal temperature for each product, retailers need to consider the below imperatives to eliminate cold chain issues and increase on-shelf availability:
Identify categories that require close monitoring: To improve freshness monitoring and thereby ensure better value realization, focus on categories that cause major revenue loss due to wastage, resulting in markdowns.
Think beyond temperature: Retailers should consider produce-specific conditions and thresholds for humidity, atmospheric oxygen, carbon dioxide, ethylene sensitivity, cooling, and pathogens during storage and transportation. These parameters vary based on the category: chilled, frozen, or moderate. For example, the desired transit temperature for strawberry is 0-0.5°C, humidity is 90-95%, and freezing point is -0.8°C..
Handling of produce: The loading and stacking patterns of pallets in trucks or storage, trailer hygiene, pre-cooling of trucks, air flow patterns, packaging, and compatibility with other perishables influence freshness and shelf life. Therefore, retailers need data on key parameters to ensure that the produce are handled properly across the supply chain for wastage reduction.
Perishable information such as transport volumes and wastage volumes during transit. In the case of strawberries, they are extremely perishable and when maintained under ideal conditions can last a maximum of 10 days. They are highly susceptible to decay by fungal rots and molds. Only high-quality fruits must be shipped because fungi can easily spread throughout the shipping container.
Compatibility considerations when transporting or storing multiple categories together. Fruits and vegetables cannot be combined in a single container because the ethylene given off by fruits such as apples can spoil vegetables such as lettuce.
Type of refrigeration and packaging as monitoring might be needed at the package level and retailers can leverage modified atmospheric packaging (MAP) to increase shelf life. For example, fresh meat turns purple red in vacuum packaging due to the absence of oxygen. The different gas composition in MAP helps to keep the meat in an attractive red color.
Fleet information such as the number of trips, high volume of transit spoilage, rejections, and associated fleet costs, including reshipments and insurance.
Key considerations for monitoring the freshness of produce
Technology considerations for smart cold chains
Advanced technologies such as internet of things (IoT), radio-frequency identification (RFID), and data analytics have revolutionized freshness monitoring.
Retailers embarking on the cold chain projects for freshness monitoring should consider the following technology aspects for better value realization:
Choose intelligent sensors: The relevant sensors and devices need to be non-invasive, rugged, easy to mount and track, and GPS-enabled. These devices need to have adequate storage for local data needs and battery life. A good option would be to have the sensors measure multiple parameters as relevant for the fresh fruits and vegetables (FFV) category. These should also be able to seamlessly integrate with the edge ecosystem (local edge processing, gateway to the cloud) for real-time intelligent responses and cloud data transfer.
Leverage cloud for an open, interoperable, and scalable solution: The emergence of 5G, new types of internet of things (I0T) sensors, and emerging standards require an architecture compatible with appropriate capabilities based on specific business needs. 5G could offset the need for remote edge processing at remote field locations. There is also a need to balance local processing, alerts, and communication for critical use cases while leveraging the cloud ecosystem for enhanced processing needs.
Build an AI-ML-powered system for actionable insights in near real-time: Predict, prevent, and minimize losses through pre-emptive detection of anomalies, actionable alerts, and autonomous responses in real time.
Create a single source of truth: Depending on the retailer’s business and supply chain operating model, there could be multiple stakeholders involved in the farm-to-store shelf journey. To avoid disputes and friction on cold chain compliance violations, ensure that all stakeholders have access to a single source of truth in a blockchain-enabled immutable database.
Three-step approach to drive ROI from smart cold chains
A systematic progression from data analysis and modelling to real-world implementation and optimization provides an effective solution to freshness monitoring.
Typical to an edge and cloud investment, the capital expenditure for cold chain monitoring would include investment in hardware and devices for monitoring and processing at the edge, cloud setup costs for advanced analytics (AI-ML), and related software expenses. Apart from this, the operating expenses would include communication in addition to hardware, devices, and software maintenance costs. However, based on the current losses due to spoilage and related markdowns (Figure 2), the benefits would potentially outweigh the expenditure. Improved customer experience will have a positive impact on loyalty in the FFV category. Additionally, there is a need to balance on-shelf availability (OSA) and re-order values at the store level.
Tracking wastage for effective freshness monitoring
The cost benefit from spoilage reduction and improved freshness has to be measured comprehensively based on the data across the supply chain and the business case. Both have to be evaluated with a multi-pronged approach to firm up data progressively as the innovation progresses from consideration to realization.
- Industry reference data: In the initial stages of implementation, actual data is likely to be limited; retailers can leverage industry reference for categories or items to quantify benefits and firm up their business case, evaluate freshness monitoring initiatives, and make informed decisions. As per industry reference data for strawberries (see Figure 3), they should be refrigerated immediately after harvest; delays beyond one hour would reduce the percentage of marketable fruit.
Industry reference for benefits evaluation
- Pilot or proof of concept: By building proofs of concepts (POCs) for select categories based on real data, retailers can refine the potential benefits and validate the feasibility.
- Short-list the shipment category and freshness attributes to monitor. For example, tracking temperature across shipments from the distribution center (DC) to stores for a specific fleet (including the type of reefer container).
- Define the duration of tracking and the frequency of updates from sensors.
- Monitor and evaluate freshness with mixed loads of categories to factor differential cooling requirements. Track data at the pallet level and integrate the freshness monitoring POC with existing enterprise applications like enterprise resource planning (ERP), warehouse management system (WMS), and transportation management (TM) solutions.
- Enable real-time monitoring and actions at the DC.
- Evaluate end-to-end outcomes with data insights for a more refined business case.
- Real data post implementation: Finally, extend the benefits evaluation model across various categories and a more varied set of attributes associated with wastage. This will help fine tune the business case with realistic business benefits. The quantitative benefits can be projected based on the evaluation of the impact of wastage and recommendations on maximizing on-shelf availability (OSA) using cold chain digital twin. This will also help identify challenges, improvements, and benefits.
Freshness critical for customer delight
Freshness is critical to ensure reduced operational costs, improved regulatory compliance, and better business proposition for all stakeholders.
There are varied approaches and solutions that can be built or deployed but impactful benefits can be realized only when there is a clear consideration of the following:
Category-specific wastage
Attribution of wastage across the farm-to-store chains, including in-transit wastage
On-shelf availability and related costs incurred in replenishment owing to increased spoilage
Wastage and losses due to spoilage and markdowns
- Right category and right supply chain elements with the right smart solution for intelligent and smart freshness management.
Retailers investing in freshness monitoring will reap benefits through improved customer satisfaction, better regulatory compliance, and higher sales.
