Tracking Quality Track quality control assessments right through the chain and turn up some ‘quick wins’.
Professor David Hughes Professor David Hughes talks about the Global Trends that will impact the food industry, 2020 and beyond.
Environmental Responsibility Every business carries a responsibility to the customers, colleagues and communities it serves.
Reduce Rejections, Enhance Reputation & Improve Bottom Line CostaExchange is able to measure and manage quality performance across its supply network using Greenlight.
50% Reduction in Time Spent on Label Checks Huntapac has reduced the time spent on label checks by 50% since implementing Muddy Boots.
Welcome Dear Readers I would like to welcome you to the Muddy Boots magazine 2012, where we will be discussing some topical industry issues and taking a look at how new and emerging technologies can support the future of food and farming. This magazine coincides with the recent arrival of the 7 billionth birth on the planet, which once again throws the spotlight on the rapid ascent of the global population. Couple this with our ageing population i.e. baby boomers living longer due to better health, and we really start to see the enormous pressure it is placing on our planets resources to feed, clothe, shelter and provide energy for its rising number of inhabitants. This theme is touched upon by Professor David Hughes, an Emeritus Professor of Food Marketing at Imperial College London, in Part 1 of his 3 articles that explore the global trends that will impact the food industry, 2020 and beyond. The shifting of economic power, urbanisation and an increasing spread of wealth are all hot topics in this edition. We were recently interviewed by Tom Bicknell, the Editor of Produce Plus magazine, which has become one of the leading fresh produce publications in Australia. Tom interviewed Jason Considine, our General Manager, about the importance of tracking your quality assessments right through your supply chain. You can read the full article on page 4. We share with you some of our latest case studies from our Greenlight Quality Control customers. First, learn how CostaExchange has significantly improved quality management since implementing Greenlight QC. The company is experiencing a decrease in rejections, an increase in productivity and a stronger bottom line performance. Finally, Stephen Shields, Technical Manager at Huntapac, talks about how the business has witnessed a 50% reduction in time spent on label checks since implementing our software. I hope this issue stimulates some thought, and as always we would be pleased to hear from you on your news and views. Join in the conversation on Twitter @MuddyBootsLtd. Best wishes Jonathan
Jonathan Evans Managing Director Muddy Boots Software
Contents Page 3: What’s new? Meet our Service Delivery Manager, read the Word on the Tweet and Dates for your Diary.
Page 4: Tracking Quality. Our General Manager talks to Produce Plus magazine about tracking QC assessments right through the chain.
Page 5, 6: Professor David Hughes discusses the global trends that will impact the food industry, 2020 and beyond.
Page 7, 8 : The environmental responsibilities that every company carries to the customers, communities and colleagues it serves.
Page 9: Case Study: Costa Exchange improves quality management, enhances its reputation and improves bottom line performance with Greenlight QC.
Page 10: Case Study: Huntapac reduces time spent on label checks by 50% with Muddy Boots.
What’s New? Meet The Team Member... Nick Page Service Delivery Manager IT and Media degree . The fresh produce and farming industry is relatively new to me but I’m thoroughly enjoying it! My main roles include keeping current clients happy, making sure that they are provided with all the information they require to make informed choices with the software , but also to make sure their requests are best expressed to developers so that their requirements are well met.
Word on the
It gives me a great insight into several industries, and I’ve developed some really good working relationships with our customers. Being involved in a new pilot for red meat quality control, for an industry quite different to anything we had been involved in before has been really exciting. Other than Batman, probably a movie director.
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Dates for your Diary To Meet Muddy Boots
@BASFAgro Key to unlocking different problems in the rural sector? Government needs to harness IT for innovation #agriculture
Fresh Connections 26 - 28 June 2012 Melbourne Exhibition Centre, Australia
@Unilever_Press Unilever in India is committed and investing in community through water conservation projects in agriculture #SustLiving
Romeo Bragato 22 - 24 August 2012 Marlborough Convention Centre, NZ
SainsburysPR By 2020, all the fish we sell will be independently certified as sustainable #20by20
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BLSA Conference 14 November 2012 KingsGate Conference Centre, Peterborough, UK LAMMA Event 16 - 17 January 2013 Newark & Nottinghamshire Showground, UK
Fresh Thinking Tracking Quality Jason Considine, Muddy Boots’ General Manager, was recently interviewed by the editor of Australia’s leading fresh produce magazine, Produce Plus. Jason discussed how being able to track quality control assessments right through the chain can turn up some ‘quick wins’.
In a market with a fresh produce supply chain as fragmented as Australia’s, keeping track of quality control can be a time-consuming procedure. Ironing complications out of that system is an important goal at all stages of the supply chain. Muddy Boots Software, leaders in quality assurance solutions for sustainable food and farming, has been supplying a system for the last few years targeted at just these problems in the Australian market. The company’s Greenlight Quality Control software is designed to keep quality control assessment reports centrally accessible, so that they can be seen and updated by all stakeholders at every stage of the supply chain. The key advantage of such a system is being able to track quality through the chain to see where any problems might be occurring, even if that chain runs across multiple companies. Finding those loose links is something Muddy Boots’ general manager for Australia-New Zealand Jason Considine calls finding “quick wins”.
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“What we’re finding is in the Australian market, there are lots of companies who are just wholesalers or just growers, while some are full supply chains,” explains Considine.
GREENLIGHT WAS MADE FOR PRODUCE COMPANIES. AUSTRALIA IS A LARGE PLACE WITH A LOT OF PLAYERS, AND IT HAS BEEN DESIGNED TO CATER FOR THAT. The system has won Muddy Boots recognition from Coles Supermarkets, which adopted Greenlight in 2010 and named the company ‘Coles IT Vendor of the Year 2011 – Support Category’. Considine says Greenlight is able to be integrated with existing warehousing and order systems, and can run on handheld computers for quality assessments in the field.
FOOD & GROCERY REMAINS THE KEY DRIVER TO FOOTFALL IN SUPERMARKETS
04.
Professor David Hughes
The Global Trends that will Impact the
Food Industry...2020 & Beyond Part 1 of 3 I would like to review the trends that will have a big impact on the global food industry through to 2020 and beyond. There’s a round dozen to get through and Part 1 will take us through the first 4, so let’s get cracking!
1. Shifting of Economic Power, Globally Yes, this is about the continued emergence of new economic powers, more than just the BRIC’s but, clearly China and India are particularly influential. In 2000, at purchasing power parity (PPP), China accounted for 7% of world GD; by 2020 it’s forecasted to be threefold this number, at 21%. India’s a step behind and, by the end of 2012, should account at PPP for 6% of world GDP. Outside the BRIC’s we must watch Turkey, Mexico and Vietnam. These fast-growing, emerging countries are changing the structure of our food and drink industry around us! A new generation of globally competitive are increasingly influential countries: From Brazil: the meat company JBS reached Number 1 position globally through domestic growth and of Swift’s (beef, lamb and pork), and Pilgrim’s Pride (chicken). Its major international
acquisition of the likes competitor is Marfrig, also from Brazil, who bought OSI in Europe, McDonald’s major supplier of meat, and completed 40 acquisitions between 2007 and 2010. The iconic English tea brand Tetley’s; owned by the Tata Group from India (who, by the by, also own Jaguar and Landrover). John West canned tuna and salmon is now in the hands of Thai Union Frozen Products from Thailand. The big FMCG guys haven’t been sleeping on the job either. Years ago, they decamped in emerging markets: In 2004, one-third of Unilever’s global sales came from emerging markets. By 2010 this had grown to over half total sales. Take a look at what is leading Tesco’s sales growth – yes, it’s emerging markets in Asia and in Eastern Europe. Do we expect more of the same through to the end of this decade? Quite possibly, although the shift in economic power is gradual and not necessarily in a straight line. There will be greater volatility in the growth rates of the emerging countries, greater business risks relative to the slow poke old economic world, and don’t be surprised by occasional shocks which at the extreme end could be cataclysmic!
George Friedman in his controversial book “The Next 100 Years: A Forecast for the 21st Century” posits that China will increasingly be distracted by internal dissension and much energy will be expended in keeping this disparate country in one piece. Be that as it may, I do know that the challenge of managing the flow of citizens from rural areas to the cities without a lot of tears will be substantial. This leads us to Trend 2.
2. Urbanisation Half the world’s population live in cities. By 2050, the figure will be 70%. By 2015, the number of cities with a population of more than 8 million will double. By 2020, there will be 14 cities with over 20 million people; I’ve visited them all! Mumbai, Kolkata, Delhi, Dhaka (Bangladesh, that is), Shanghai, Jakarta, Manila, Seoul, Tokyo, Cairo, Lagos, New York, Sao Paulo, Mexico City, and for good measure, there won’t be a blade of grass between Hong Kong, Shenzen and Guangzhou – in essence, another meta-city as these huge conurbations are called. So what does this mean? Meta-cities attract international retailers like bees to honey and there is substantial supply chain implications associated with this. Starting in developed countries, there will be a shift
to smaller footprint urban stores with likely rationalisation of skus (products). There will be no room for 4 brands of ketchup and unproductive inventory will be anathema. New distribution infrastructure will be required with intermode transfer points placed strategically (in Europe, one can see the emergence of road-rail-water transfer points linking sea, road and rail freight much more effectively than in the past). International food service companies will flourish in meta-cities and, along with the global retailers, will accelerate the transformation of farm to fork food chains in emerging countries. I fancy urbanisation will encourage the internationalisation of the diet, to a degree. This is good news for Italian food. Why? Around the world, consumer’s select Italian food as the most liked after their own food! So, worry not, wherever you go there’ll be plenty of pasta and pizza. Mind you, maybe not a pizza topping that you are familiar with – it was ever thus! Pizza entered this world in Italy as working class fast food. Wherever you go, it’s the same, so look out for sea cucumber on your pizza in south east China!
3. Increasing Spread of Wealth & Wealth Disparity Folk leave the country for the city largely for economic reasons; they follow the money. The BIG opportunity for the food and drink industry through the decade is the expansion of the global middle class. Purchasing power parity income is expected to triple in emerging countries by 2030. In 2000, just over half of the world’s middle class were in emerging countries; by 2030, this number will be over 90%; a terrific target for the major manufacturers and retailers who will fight tooth and nail for the attention of shoppers. It’s about brand development and who will win – manufacturers or retailers? In North America and Europe, retailers were largely late to the party with retail own brands and, when they came, retail brands flagged “cheap”, “lower quality than major branded goods”. Look at the increasing sophistication of retail branding in countries such as the UK, with a tiered “Good, Better, Best” offer.
In emerging markets, retailers have the opportunity to jump from “own label is low price - low quality” to a much more competitive position vis-á-vis the manufacturer brands. Go early to a “Good, Better, Best” own label offer, I say to retailers particularly in high growth economies where shoppers are intrinsically brand conscious. It’s not too late yet…but hurry! Instant coffee and chocolate are new for most Chinese. What are the preferred brands? You guessed it Nescafé and Dove (Mars). The increasing spread of wealth will drive demand, in particular, for premium protein, oils and alcoholic drinks. Good news for meat, dairy products, olive oil and wine. But, be careful – take a good look at food traditions and culture in your target emerging market. When the Wong family of Nanjing see their household income pop over US$5,000, they don’t wake up the next morning and think “funny, I fancy a rib-eyed steak”! They’ll look first for more and better quality of what they eat now, such as fish, chicken and pork. Beef and lamb is as exotic to them as ostrich and venison is to you.
4. Ageing Population There’s an extraordinary difference between the population age profile in developed countries versus emerging countries – the former looks like a pillar (roughly similar numbers in each age range) and the latter looks like a pyramid (with a huge base of young people and a pointy peak or apex with very few oldies. Mind you, China is a little different as, reflecting its 1 child policy, it tends to the developed pyramidal model. Focusing on oldies in developed countries for the moment, there’s good news and bad news. The good news is that there’s a lot of them and they are relatively well off – baby boomers are as much as 50% of the population in some countries and they have 70% of the wealth. Yet, oldies are not well-served by our industry – opportunities are enormous. What are their specific requirements: • Easy-to-open and read pack sizes for one; • Not multi-buy family packs; • Accessible on the retail shelf; • Products with strong health and wellbeing hooks, and nostalgic/memory jogs;
• Sensitive aids such as trolleys with magnifying glasses, seats, a senior crèche corner for older males, wider aisles; • Shuttle services from protected accommodation to stores; home delivery; • Stores in nursing homes. Oh, it’s endless. Don’t underestimate the political clout of oldies – they can and do change the voting landscape. Remember, some sage said “if you are not a socialist at 20, you have no heart, and if you’re still one at 40 you have no head”! The oldies will place enormous political pressure on social programmes, for example. Of course, the really bad news about ageing nations is that it indicates a shrinking population – Japan is a case in point where its current size of 130 million is estimated to shrink by 10 million over the next 20 years. That’s bad news for almost everyone in business (funeral firms excepted). Can you imagine being in the baby products industry? Mind you, incontinence is a characteristic of the beginning and end of life’s journey! Enough dark frivolity, that’s got the first four big trends out of the way. Take a break – I am, it’s wine time – and make an effort to get back to my second article looking at trends 5 to 8. They have a green tinge to them, but don’t let their colour put you off! Talk to you soon.
Professor David Hughes, Professor of Food Marketing profdavidhughes@aol.com +44 (0) 7798558276 http://www.profdavidhughes.com/
06.
Sustainability Environmental Responsibility of Businesses in the Food Industry Every business carries a responsibility to the customers, colleagues and communities it serves. Nick Page, Service Delivery Manager at Muddy Boots, explores the impact the food industry is having on our planet.
Consumer knowledge, expectation and media exposure means that environmental responsibility is, or should be, at the forefront of every businesses agenda. A recent study by The Nielson Company revealed that more than 67% of Australians are more likely to choose one retailer over another if they can demonstrate a high level of social and environmental responsibility; 75% of Australians think more highly of companies that are considerate to the environment; and 68% are willing to pay more for goods from responsible companies.
The issue of reducing waste across the food industry is critically important. Consumers are witnessing an increase in the price of food and yet the media communicate excessive food waste as product is being rejected for being the wrong shape or size. This media exposure continues to raise questions about the responsibility every business carries to the people it serves.
The cost associated with household waste in Australia is $5.2 billion every year. The majority of which is fresh produce, with $1.1 billion worth of untouched fruit and vegetables being wasted each Retailers and brand holders are year. The environmental impact of subsequently faced with a this is huge – water resources are complex task, particularly within wasted and greenhouse gas the fresh produce supply network; emissions are generated through where they are dealing with wasted production and diverse, global supply chains and decomposition in landfills. factors such as large numbers of small-scale growers, diversity of A study commissioned by CSIRO geography, cultures and an (Commonwealth Scientific and increasing trend for fresh produce Research Organization) on the to be packed at source. carbon and water footprints of the
Australian fresh mango industry revealed that 54%, or 19,000 tonnes of the average yearly production of mangos are wasted from field to fork. This doesn’t sit well with the whole supply chain efficiency element or the retailers’ long term sustainability agendas.
“Harnessing technology enables our suppliers to self-assess themselves against Unilever’s Code and identify good stories or areas for improvement,” explains Andrea Granier, Global Sustainability Manager Natural Ingredients, Unilever Global Supply Management.
The impact of this on the retailer is becoming even more significant as they continue to take ownership of the problem with own label produce. As the retailer becomes the brand, any scrutiny relating to methods of supply, availability and cost can seriously affect their reputation.
“The Reporting Tool allows us to spot trends in the industry which can be broken down by individual supplier, country and product. As a result, we are able to see what the issues are and what needs to be improved, without having to interrogate endless paper-based records.”
process. Accurate specifications should be communicated between the retailer, suppliers and primary producers to ensure that time, energy and cost efficient quality and quantity expectations have been met. This planning and forecasting will lead to more informed and accurate decision making which will reduce waste and increase profit. The environmental impact of the supply chain will escalate if retailers and brand holders do not challenge these areas and the efficiency throughout their supply chain is not improved.
As part of Unilever’s campaign to highlight its sustainability UNDERSTANDING WE HAVE TO MAKE A REAL credentials to consumers, they put DIFFERENCE IN SUSTAINABILITY TERMS AND the Muddy Boots self-assessment BEING ABLE TO COMMUNICATE THIS THROUGH tool in place in 2007. Loaded with the Unilever Sustainable OUR BRAND IS LEADING US TO CREATE NEW Agriculture Code, the tool is WAYS OF WORKING WITH OUR SUPPLIERS. enabling Unilever and their suppliers to track and monitor progress and create evidencebased improvement plans. Without this, production costs “By introducing the sustainable will continue to rise and there initiative to fresh produce, our The software is used to monitor communication down the supply will be more price pressure. areas such as social accountability, chain has significantly improved. environmental impact, corporate We now know how many suppliers Crucially, software systems can governance, food safety, ethics we have, their locations and what put better check controls and and health and safety, and can be they are supplying to us; this level work-flow controls in place to adapted to accommodate virtually of transparency is key to that drive ensure that the process of any inspection protocol. With rejection happens at the initial for sustainability,” concludes intelligent software systems in stages of supply chain, before the Granier. place to consolidate data, environmental and financial geographical spreads, supplier impact of freight and packaging Using technology to harness size, waste management and the have been incurred. better business information use of renewable energy can be throughout the supply chain is used to identify supply chain key to that drive for efficiency. issues and measure the success of Better planning and forecasting green initiatives. must play an important part in this
08.
Case Study Reduced Rejections, Enhanced Reputation, Stronger Bottom Line.
CostaExchange, part of the Costa Group, has selected Greenlight Quality Control from Muddy Boots to measure and manage quality performance across its diverse supply base, consisting of various fresh produce categories including avocados, bananas, mushrooms and tomatoes.
CostaExchange is one of Australia’s leading vertically integrated horticultural businesses and a major grower, packer, marketer, distributor and exporter of fresh fruit and vegetables. The business has an economic presence in more than 30 regional and rural communities across Australia, including farms, packing facilities and distribution centres. In order to maintain its reputation as a supplier of quality fresh fruit and vegetables, the business identified a requirement to measure and manage its quality performance across multiple product categories and subsequently selected Greenlight Quality Control to improve visibility and pinpoint areas where improvements are needed. Greenlight Quality Control ensures consistency in the measurement of product quality attributes. The paperless mobile technology software captures and processes information at the point of input, enabling businesses to identify problem areas and collaborate with suppliers to deliver consistent improvements. With increased transparency and the wider sharing of data, businesses have a 360° view on site, supplier and product performance up and down the chain.
Brett Heather, Group Technical & Alliance Manager at CostaExchange, comments; “Quality excellence is a core pillar of the Costa business strategy, fundamental to this is an ability to measure and manage our quality performance across multiple product categories, across a diverse supply base. The deployment of the Muddy Boots Greenlight system into our business gives us the visibility (by trending performance over time) to highlight areas where improvements are needed, be that product temperature, size, weight, aesthetics and so on. “With improved quality management, through the utilisation of Greenlight QC, Costas see significant benefits flowing, with improved efficiencies, reduced rejections, enhanced reputation and a stronger bottom line performance.” Jason Considine, General Manager at Muddy Boots Software, discusses the new partnership with CostaExchange; “We are delighted that CostaExchange has selected Muddy Boots to manage quality control across its Distribution Centres. Quality is a key element to their business strategy and the adoption of IT has underpinned the quality and consistency of their product offer, whilst also demonstrating a good return on their investment. “We are now actively working with the Costa Group to implement Greenlight QC across other areas of the business.”
Case Study 50% Reduction in Time Spent on Label Checks Huntapac has been using Muddy Boots’ CropWalker software to manage grower records since 2002 and identified a further need to implement a mobile electronic solution that would manage quality control in the packhouse more efficiently. They selected Greenlight Quality Control (QC) from Muddy Boots as having the best ROI and it has delivered by halving the amount of time spent in label checks each week.
Huntapac Produce Ltd. specialises in growing, packing anddistributing a variety of organic and conventional vegetables, brassicas and salads to major UK supermarkets. The company has a reputation for supplying high quality produce and needed a software solution that would assist with improving the efficiency of quality control processes and reduce the time spent on inputting data. “Traditionally we were using pen and paper to collect all data in the pack-house,” explains Stephen Shields, Technical Manager at Huntapac Produce Ltd. “We had 2 members of staff that would manage label checks, one of which was working on this fulltime,and therefore the impact of this process in terms of time and money was huge. Muddy Boots’ Greenlight QC eliminates this challenge by halving the amount of time the business spends on label checks per week.” In the last week Huntapac has completed 1,800 label checks, which would have previously taken approximately 60 hours to complete; 40 hours for the QC to validate the label information and a further 20 hours for the Print Room manager to verify the validation. Using Muddy Boots’ Greenlight QC, these label checks
have been reduced to 1 minute per check, making a total of 30 hours spent on this process in the last week; a reduction of 50% on traditional methods. “In addition to this significant time saving, we are now given greater visibility on the performance on quality control processes throughout the busi- ness, resulting in improved management efficiency. Traditionally, if produce was rejected, a full report would have to be generated and members of the management team would be individually contacted. This process would take time; there would be a delay in sharing the data and on busy days we were always playing catch-up. There fore, complete visibility of the current business status was a real challenge. “We can now instantly generate an inspection report on the produce, take pictures on the hand-held device as evidence and send the report straight to the manage ment team and supplier. This instant alert has improved the communication both inter nally and with our suppliers and has allowed us to identify which areas of the busIness are working well and which areas need improving.
10.
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