More than half of the world’s population lives in cities. They have nothing to do with how food is produced or distributed. They just expect it to be on the shelf when they want it.
At least, that’s how it worked for a good part of 100 years. The pandemic has given us all a hard lesson in supply chain fragility — a couple of words that weren’t previously known for thrills — and that lesson holds true for producers feeling the pain as well.
“A lot of companies were kind of forced to break supply chains they hadn’t touched in 30 years and assumed they could push a button today and tomorrow the product would arrive. At the last 15 months, in food chains and other supply chains, this is not the case.
So said Are Traasdahlfounder and CEO of Crispthe open data platform that collects feeds from some of the largest retailers and consumer packaged goods (CPG) brands to inform purchasing decisions at scale.
In a recent conversation with PYMNTS editor Matt Nesto, Traasdahl believes that a third of the world’s food production is wasted. However, he said it was fixable with more supply chain visibility.
“Nobody makes money from waste and food waste. The other side is out of stock. Nobody makes money from being out of stock,” Traasdahl said. optimize supply chains by having enough products, getting products to stores when needed and at the same time [not wasting] whatever [drops] all the way for everyone.
Looking at data from some 100 million companies around the world, “and it’s an $8 trillion industry,” he said, “take a third out of $8 trillion and that’s more bigger than most markets in the world, so there’s a lot of will here to change that and make those supply chains more efficient.
See also: Data platform Crisp believes the solution to food supply problems is cooperation
Food feed wheel
Just as supply chain grunts can create havoc – and they are – the reverse can be achieved with the right data insights, delivered in a way that keeps commerce ahead of the curve.
Saying that food brands “typically increase their sales between 15% and 20%” by being better suppliers, Traasdahl explained what it means to use data to be that better partner.
“They make sure they have products on the shelves when a consumer comes to the store. It’s a positive flywheel because now the retailer orders more, they are more reliable and they take more market share.
On top of that, internal cost reductions can be as high as 20-25% because “they remove so much inefficiency. On the retailer side, it’s usually a bit the reverse of that. Those who participate in the programs [have] much better levels of service and they understand consumers better. Because of this, sales are also increasing for retailers.
This falls under “programmatic commerce” where legacy technology like Electronic Data Interchange (EDI) – first developed in the 1960s and popularized by Walmart as an early form of inventory and supply chain management data-driven – gets a necessary upgrade.
That’s where platforms like Crisp come in, giving retailers and CPG schedulers subscription-based access to application programming interfaces (APIs) that give them easier access to supply data so that they can keep the shelves full – or know when to expect a shortage.
“We view programmatic trading as a much…better kind of data-driven, machine-to-machine communication, collaboration, and information exchange. It’s much more programmatic and data driven, and [more] computer-driven than fax and e-mail.
See also: New FDA Rule Could Spark Blockchain Adoption in Food Tracking
A trillion dollar goal
Traasdahl told Nesto that Crisp expects to see $1 trillion in transactions through its platform over the next year. The company has aggressively pursued corporate clients, he said, and signed 15 in the past week alone.
Growth is so promising after the global supply chain fluctuations we’ve seen over the past two years that Traasdahl doesn’t feel threatened by competition – or the possibility of a drop in demand for crisp.
“We’ve built a lot of technology companies before and we’ve always had a lot of competition,” he said, “but three or four years ago supply chain wasn’t a particularly interesting area for anybody. I feel like we now have a product in the market and very few – or almost no – competitors at all.
See also: In Europe, funding is pouring in for online grocery platforms