COVID-19 pandemic or setbacks in supply chains, that the agricultural and food industries have faced over the past few years?
The heart of this conversation revolves around food safety and distribution, which are both issues influenced by changes in population and global warming. Today, a variety of small businesses, companies, and even countries are reviewing their impact and footprint in the global food supply chain, particularly regarding topics like localization and self-sufficiency. Specifically, two questions that often arise from these considerations are: How can different companies diversify their geographies and sources of commodities or raw materials without relying on any one alone? And how can companies bring their production facilities closer to the end consumer?
Another trend we have seen in the industry is an increase in the presence of governments and regulatory agencies that review agricultural policy and subsidy activity between the United Nations and individual territories. Within “farm-to-fork” supply chains, there is also a growing concern with vertical integration and the question of strategically using data to both invest in and ensure access to areas where companies see the greatest food scarcity and/or technological advantage.
What are PwC’s main projects in the agricultural industry, taking into account these macro trends?
We see ourselves participating in the agriculture and food ecosystem principally by constructing and sharing an understanding of the developments we are seeing in the sector across the world. For instance, recently we have been investigating meat production in New Zealand, agri-tech developments in Brazil, green energy alternatives in the Middle East, and regenerative farming in Europe and the Americas.
Our goal, specifically, is to provide professional guidance and information on the different transformations happening in these regions. And we work with global institutions to help them think through ways of collaborating with food and agriculture companies by setting optimal guidelines, standards, and practices. Some considerations include reducing waste product in the supply chain, finding economic ways of storing commodities, reducing energy consumption, and minimizing obsolescence when distributing the volume of production to the market. We also pre-select innovative tech companies and screen them to determine whether they would be able to push the market forward, while also providing our clients with the equipment most appropriate to their needs.
PwC Belgium has recently launched its Scale AgriFoodTech program, how is it unfolding so far and how easy is it to spot those ag-tech startups that can make a difference?
With Scale we support 10 B2B focused young companies in this specific sector. Next to providing them coaching and publicity, we also open up our larger network. Scale is precisely one of the initiatives that serves as the bridge between technology and our (multi-national) clients. One advantage of the program is that it enables us to select and invite smaller companies that we believe in and that we can directly link them to the relevant and right decision maker within those bigger corporations. Overall, making these connections allows us to anticipate and promptly address global surges in food demand by facilitating the diffusion of technologies such as transparency and traceability, precision agriculture and sensor and drone imagery that can track and stimulate crop growth.
In terms of selecting the industry sub-segments, I would say that automation in labor and farming has been an especially important advancement. The CNH Industrial project, for instance, has supported innovation in manufacturing by investing in automated tractors that function by remote control. Another crucial development has been the use of precision agriculture to improve water and fertilizer management. And in terms of more social considerations within the sector, the trend in companies has been to financially secure equitable pay and wellbeing for farmers. Moreover, there are programs designed to provide farmers with functional knowledge, teaching them to incorporate regenerative agriculture into their practices, find revenue-generating models of production, and collaborate with vertically integrated companies in ways that strengthen the supply chain.
You mentioned that farmer wellbeing and equitable pay have become important considerations in your sector. What is being done in the food and agriculture sector to secure financial security for farmers?
In the European Union, regulatory agencies in the industry are requiring food and agriculture companies to report on farmer wellbeing and abide by guidelines that better address the latter’s needs and financial security. We are also entering an age of transparency in which companies’ emissions within farming communities can be tracked using digital mapping systems. Last but not least, companies like ours are working to improve the social and economic benefits for farmers within the processing chain, a topic that has become a concern among end consumers.
