Bert Barmans of Special Fruit gave a joint presentation with Daria Reisch and Andreas Allenspach of Agrinorm at Global Berry Congress on the role of quality, the importance of data for quality management, and the potential applications of AI algorithms in the fresh produce industry. During the interview, the specialists expanded on these questions and explained how software solutions, such as Agrinorm, can help in daily business.
30% loss in revenue due to unmet quality expectations
In his position as Head of Category Management Fruit/Vegetables & Flowers at Coop Switzerland, Andreas was often criticized for imposing quality standards which were too high. To find out whether these quality standards were justified, he conducted a study. In test stores, consumers were offered an inferior quality in several product lines. "The results were shocking. In just 3 weeks, revenues dropped by 30% and in-store waste doubled. Moreover, it was difficult to win shoppers back once they left. This experiment demonstrated how important it is for retailers to meet the expectations of consumers in fresh produce." But, Andreas adds "Quality doesn’t always mean top quality; it can also be, for example, acceptable quality for an acceptable price. Traditional retailers often have multiple price lines that come with different quality expectations."
Sourcing fresh fruits and vegetables is tricky
Bert explains that customers not only have different requirements, but these requirements are also volatile and can change during the season. "On the grower’s side, quality is dynamic too. Farms are not factories, and they cannot produce only one type of quality. If it rained or was too hot, the quality will be different. So, getting the correct product to the right buyer is very tricky."
The economic value of quality is huge
Bert is convinced that there is huge economic value in correctly handling this complexity. "If you under-deliver on quality, you will be punished and if you over-deliver then you are giving away value. Retailers pay differently for different lines. It is critical to understand well what your customer really wants and source the right product. If you manage, your customer will be happy, you will have healthy margins and you will be able to provide better returns to your growers. It's a win-win."
Data and metrics are key to success
How to achieve this? According to Bert, the answer lies in moving from working based on opinions and assumptions to making decisions with facts and metrics. "Often in the fruit industry we refer to gut feel. But gut feel can be easily challenged. When you see metrics based on data, you start connecting the dots and learn what is actually happening."
A lot of information is already available to fresh produce companies, we just need to start using it. Based on this information you can decide which fruit should go to which client and to which of their lines. "You can also provide your suppliers with meaningful feedback. For example, the fruit isn’t sweet enough or doesn’t hold up well enough during transportation. Together, you can then see what pre- or post-harvest management practices can help to meet the requirements. Finally, we should learn from the past to help people anticipate the future and plan ahead."
Agrinorm platform is there to support
A dedicated software can be of real help in managing all this complexity according to Bert. Daria from Agrinorm demonstrated how Special Fruit management with the help of their platform can learn from data. "Based on analysis of intake reports alone it is easy to spot underperforming products, and investigate from which origin and supplier they originate. Detailed evaluations of defects are instrumental in providing suppliers feedback and helping them understand what issues must be addressed for the next week or season. With Agrinorm such evaluations are always up to date and readily available for the team." Once there is enough data, Agrinorm can help not only analyze the past, but also use algorithms to forecast the future. "Wouldn't it be great to plan ahead which product from which fields should go to which customers to avoid claims?."
"We see huge potential for the fresh produce industry to learn from the data and use this wisdom. At the end of the day, people still know processes best, but when you help them to navigate all that complexity and feel more confident in their decisions, it makes a world of difference," Daria concludes.
Voor meer informatie:
Daria Reisch / Andreas Allenspach
+41 78 66 888 18
+32 3 317 06 67