We interviewed Dr. Vijayender Nalla, the tutor of our Masterclass Food Security and the Director of Agribusiness Academy. We talked about one of the disruptive food chain projects he has been involved in. He also talked about the lessons European Agribusinesses can learn from emerging markets like India. We also talked about what steps we should take to avoid a food related virus to grow into a pandemic in the future. At the end of the interview he gives us some tips on business opportunities in the Agribusiness sector.
“How can we avoid food becoming such a problem? Transparency is key.”
Can you give us an example of some of the disruptive food chain projects you have been working on?
“Prior to my educational activities, I was investing in some food projects. For example, in 2011-2012 we started a project where we processed fresh products like mangos. The process was about drying and extraction. With some innovative technology from France, we divided this into two different stages: one stage close to the source, and one stage close to the market. The normal process was that the mangos would be transported to the Netherlands in its fresh form. This fresh product had a shorter shelf life. The drying and extraction close to the source had very basic requirements and it did not require a lot of investment. The processed product had a longer shelf life of up to six months and it gave a higher return for the farmers.
In the Netherlands we used the innovative technology to process the products in such a way that we could bring the processed product up to a higher level. We developed it for snacks and ingredients. We built it up to a certain extent but realised that the market needed more time. It was received very well in the Netherlands and we received a lot of support and funding from investors. Now two of my students are picking up that project, trying to scale it up. That was what we wanted and needed: entrepreneurial people from Africa.”
You have experience in Africa, Asia and Europe. We understand that the Netherlands is famous for technology and innovation. But what could we learn from Africa and Asia?
“That is a great question. The technologies that are developed in the Netherlands, for example the technology to process, package and transport, are developed in Europe for European conditions. The conditions in Africa or Asia are different. The road infrastructure, the skills and their ability to understand the value chain is different. So as a European business you need to localise your services, whether it be technology, knowledge or a combination of both. For example if you are a food company.; the tastes are very different around the world. The preferences are different, and of course everybody prefers convenience. European businesses need to adapt to the local markets they want to serve.
But from a learning experience perspective, what I have learned in India is how you can innovate at a low cost. For example when I started to develop digital learning modules, I laughed at people who said it costs 50 000 Euro to develop one course. I think we can develop 10 courses for that kind of money. If you can combine the quality approach of the Western world and the cost focus of the emerging markets, I think there is a lot of value there.”
What do you think the world needs to learn in terms of food security to make sure these kind of viruses do not have the chance to grow into a pandemic in the future?
“It is a great question. Food safety is a big challenge. You have to look at the use of pesticides, storage, cleaning of the equipment, the correct processes, packaging of products and hygiene aspects. We know that Food security and the spread of SARS viruses are related.
But Food security is not only important because of viruses. Several hundreds of thousands of people get sick on a daily basis because of the food they consume. How can we avoid food becoming such a problem? Transparency is key.
Technology will have a great value in this. For example, the internet of things, which is becoming a big part of the food value chain and another example being block chain. With these technologies, certification standards can be monitored more closely because you have real time access to factory facilities.
For example, a retailer in the UK can ask for a video feed of the factory they purchase processed food from. It is possible to avoid these kinds of challenges and create food security, but we have to work on the value chain.
One of the main topics in the Master Class in Food security is the Food Value Chain of the future. The value chain has to be redesigned and restructured to be able to deliver safe, nutritious and sufficient food. If you want to take corrective actions faster, you need transparency and a good view of the value chain. You also need the information to be able to inspect.
You can do wonderful things. For example, products often get spoiled when in transit. If you have a continuous monitoring of these products, you could avoid a lot of spoilage of products. If you cannot avoid, you can reroute. If your products are transported over a long distance maybe you can find some customers halfway along the route.
Not avoiding product spoilage is going to be a big waste and a big cost when it reaches its destination. It is also a possibility that the retailer has a system and the relationship where they can sell the products in bulk to the restaurants for a discounted price. The restaurant can use all of that before the end of the day, and then it will not be a waste. If the retailer keeps it for a whole day then it will be a waste. Those relationships are the future: value chain relationships.”
You mentioned that flexible pricing can also help to reduce waste
“There is a company called Chobani foods in the US that have a different price for their yoghurt based on the shelf life. When it is going to expire in one month it will cost more, than when it is going to expire in one week. Flexibility depends on certain parameters. As a consumer you have to understand and accept these parameters.”
How much has the food industry been affected by the Corona virus?
“The food industry has coped well. There have been some disruptions, for example the flower industry has struggled. The US poultry industry has struggled, as well as the meat industry. But there hasn’t been a disruption that has hurt the consumer or consumption in a big way. However, the amount of people in Africa and Asia that have not secured enough food has increased.
The retailers have done better. All in all it is possible that the food industry is the least affected industry. Could they have done better? Yes, on an individual level businesses have struggled, for example, some businesses could not get their products to the market. People who have ignored the digital component have struggled the most. They did not have access to a digital distribution channel. They were too dependent on the food service industry only (restaurants, party catering etc.)”
What are the biggest opportunities post-Corona?
“The future opportunity is to help agribusinesses have a digital distribution channel. Two entrepreneurs we are training in our mini-mba, one in Kenya and one in Nigeria, are active in that area. The B2B channel is very interesting. The future of buying and selling will be very different. When those opportunities develop, a lot more product innovation will take place. A lot more agricultural value will come out of it and the farmers will make more money.”