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Waste not want not

Pascale Martin, founder of Agronomex, describes the company’s ambition to facilitate the direct trade of surplus fresh produce in the UK via a B2B web platform and to improve the efficiency of the supply chain.

Resource optimisation

The UK fruit and vegetable supply chain is facing significant issues with edible surplus wastage. With 85% of agricultural production going to retail, the main UK retailers have a large impact on UK farming production practices. Many UK farmers are contracted to big retailers; contracts often impose an obligation on farmers to make produce available at a specified time and with predefined marketing standards.

In addition, consumers continue to demand high quality produce and retailers respond to this by rejecting up to 40% of total agricultural yields. In the absence of alternative market opportunities, surplus and sub-standard produce is simply left in the field to rot incurring huge losses to growers. The Global Food Security Program estimates that 20 to 40% of edible produce is wasted at the farm gate (harvested or not harvested). There are several reasons why growers are left with excess crop, including stringent marketing standards, changes to forecasts or fluctuations in demand.

According to ‘The Horticulture Innovation Partnership’, imports represent 34% of the source of supply for food processing companies in the UK[1] (Figure 1). Because of this strong dependence on imports from the EU, particularly in a Brexit context, horticulture products grown in the UK bring valorisation and optimisation of existing local resources.

The UK agri-food industry is seeking innovative solutions and new technologies to improve its competitiveness and to boost the productivity of UK food businesses, use resources more efficiently and become more sustainable throughout the food supply chain[2].

Figure 1 Food processing companies – source of supply Horticultural Innovation Partnership 2014

Web platform

The London based start-up, Agronomex, is offering a new, sustainable solution to tackle the problem of fresh produce wastage at source. The aim is to turn surplus fruit and vegetables into income and reduce the sourcing costs of buyers.

A finalist of the Agritech East GROW competition in June 2017, Agronomex is building a B2B web platform to facilitate direct trade of surplus produce through technology and resource optimisation. This is made possible by offering a single interface, linking fruit and vegetables suppliers with food processing companies and providing the appropriate support to manage supply and sourcing processes from one single location. The intention is to improve market transparency and communication within the supply chain.

Volumes of edible crop wastage are so large that a B2B approach offeres the most appropriate and sustainable solution. The Agronomex platform is built on an auction model, where suppliers can promote and sell their available produce while buyers can post their sourcing needs. In response to these posts, suppliers can make an offer of available produce to potential buyers.

From the buyer’s perspective, reducing sourcing costs is a priority, but they also require guaranteed quality in line with food safety and traceability requirements. Suppliers are encouraged to provide evidence of produce quality that buyers can consult on-line. In this way, suppliers maximise their chance of finding a buyer and buyers can select only suppliers meeting their required standards. A single ID is allocated to each successful trade.

A ‘forward contract’ option is also available. This gives primary producers the opportunity to sell produce before harvesting and thus reduce their risk of unsold produce leading to wastage and losses. On the other hand, purchasers can secure their produce needs in advance.

Easy to use

In only a few clicks, users can sell or buy fresh produce as well as managing associated actions. Users log into the Agronomex website and complete a user profile with information related to their type of business, types of produce supplied and collection/delivery address. Suppliers are encouraged to upload online any documentation that could maximise their chance to find a buyer, from quality certifications, crop records to images of the produce for sale.

One reason given for not harvesting surplus crop is the lack of guarantee of selling at an economically viable price. Suppliers set up the auction, determining the asking price and the bidding time as well as the quantity to be sold in one batch and the grade.

Shelf life might vary significantly depending on the produce and the supplier is in the best position to determine for how long the produce is viable.

Suppliers can also market produce for animal feed or anaerobic digestion (AD). Although some produce might not be fit for human consumption, it still has a value and can be redirected to animal feed or AD for valorisation rather than sent to landfill.

Because supply chains are often elaborate, the procurement process is time and resource consuming creating a challenge for each agri-food business. Agronomex offers procurement teams an efficient and sustainable eSourcing solution helping them to be more cost efficient, without reducing quality and food safety.

Since payment can be a barrier for suppliers to trade with new buyers, the platform offers payment facilities and a credit check for each buyer. Suppliers are guaranteed payment within 3-5 working days once the trade is finalised and buyers have access to on-demand extended payment terms where applicable, accessible from the platform.

Although some produce might not be fit for human consumption, it still has a value and can be redirected to animal feed or AD for valorisation rather than sent to landfill.'

Logistics

Agronomex is also establishing a logistics solution on-demand by teaming up with a freight exchange platform to minimise dead mileage and part loaded trucks. Such a system could significantly reduce logistics costs.

Pilot phase

Agronomex is working on the development of its network and looking for new users who want to join its pilot phase, starting soon. It is looking for food manufacturers which buy fruit and vegetables as ingredients for other products, including large restaurant chains, and processing firms specialised in fresh produce.

The pilot will commence with suppliers from farms in the east of the UK, allowing access to the largest volumes and a wide range of produce, before being expanded nationwide. The initial focus will be on farms under contract with big UK retailers, which are the most likely to have secondary produce.

Alongside this, Agronomex is raising funds to move the business to the next level. It is keen to meet people from the industry who wants to learn more about this venture or want to share feedback and experience. Its objective is to be the first fruit and vegetable spot market for B2B users in the UK.

Pascale Martin, founder, Agronomex

Pascale left her permanent job in an investment bank to work full time on this new venture with the objective of building a global solution for a more efficient fruit and vegetable supply chain.

For more information contact Agronomex: Tel: + 44 (0) 7930 397 342

Email: pascale.martin@agronomex.com Web: http://agronomex.com/

References

1. http://www.hip.org.uk

2. https://www.fdf.org.uk/sustainability-ambition2025.aspx



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