OW: Talking about the work you do with the IFPA in terms of information sharing between growers, logistics service providers, wholesalers and so on, how do you think dialogue between different parts of the fresh produce supply can be facilitated?
Steve Alaerts: What I like about a show such as FRUIT LOGISTICA is that it is an event in the food industry where there`s a recognition by one half that it`s important to deal with the other half, because you can`t grow and sell produce without having the logistical stakeholders in there. At a lot of shows producers or logistics are represented, but there is no dialogue. For me, collaboration starts with relationships. Are we communicating effectively at FRUIT LOGISTICA? No, obviously not. We are not discussing more technical requirements, like standard operating procedures. What we are doing is laying the important foundation of relationships that allows people to understand and accept each other`s position so that they can get to work later. For me, FRUIT LOGISTICA, as well as the IFPA, is an immense opportunity for people to engage with all the others that have a crucial role in the value chain while not controlling that. It`s one of the reasons why I think a lot of companies have driven themselves into vertical integration because they assumed that the best way to control your market is to control all the elements within the supply chain, which is hard to do because a grower doesn`t know how to run a transportation company. It`s a different ballgame. So I`m more of a believer not of vertical integration but virtual integration. That means that you need to sit together, everyone is good in what it does in its own capacity, and then make sure you understand each other and you align.
It`s very well done at the IFPA what we do now with the Supply Chain Council about sharing information. The idea of the Supply Chain of the Future project is to help to offer a pre-competitive, so pre-commercial, framework to all participants in the value chain, how to more efficiently share data with each other in a harmonised way, in a safe way. You want to be able to share data with everyone, but not with anyone, it`s very different. There are lots of reasons you might not share data, because they don`t trust their data with others where it might be used against them. For that we are working on a smart data escrow system which is pre-competitive and everyone can use. We of course also need to make sure we understand each other`s language, and we are also working towards harmonised standards.
One of the most interesting initiatives is dynamic incentives. The better experience consumers have, the more sales you will have. Everybody knows in the fresh produce industry that quality perception is the key for increased demand. We want to incentivise stakeholders through this framework. For example, in your industry, if there is a logistical stakeholder who really takes the effort to understand that specialty mushrooms have these particular characteristics, they would benefit from that. For example, you cannot mix specialty mushrooms with other products that respire lots of ethylene. Many transport stakeholders may not know that, and a pallet of specialty mushrooms might end up in a container alongside other fruit and vegetables that are respiring ethylene and indirectly damaging the produce. So if we have a framework that allows us to incentivise people that actually contribute to quality, then that framework will be very successful.
I think we need a paradigm shift where there`s a lot more accountability because, as a logistics industry, we have a tremendous impact on the quality of the product. If I`m supposed to move a specialty mushroom at 1 degree Celsius at 95% relative humidity, and for some reason I accidentally move it at 2 or 3 degrees for a few days, that will impact the product by shortening the shelf life, perhaps losing a percentage of sales. It had to do with my role, but as there was no information sharing or no pre-agreement, I`m not accountable and I just get paid for my services and the product is out there. This is an extreme example, and there are lots of people in the transportation industry who take this very seriously _endash_ I`m very proud of our fresh produce logistics in Europe, it`s super advanced, a very dense transportation system, a lot of availability, a lot of investments within their silos whether storage or transportation. But there is room to get to the next level where we share better information and have a good understanding of what to do and what not to do.