From farm to fork: exciting challenges ahead for the agri-food supply chain

The recent SIAL Paris 2024 event marked sixty years of celebrating the agri-food industry. This year’s show was followed by a conference on 22 October, the theme of which was ‘What responses to supply chain challenges in the agri-food industry?’

The agri-food industry is a driving force in our economic well-being, and supply chains that deliver food to consumers will continue to be vitally important into the future.

For as long as farmers have produced food for markets, their challenge has been to get it to the marketplace as quickly as possible. Indeed, agri-food is what put the ‘fast-moving’ into fast-moving consumer goods.

Move fast or perish. Literally.

And as the revolutions in trade, communications, and transportation have increased the reach of markets, the tyranny of distance has remained very real. Logistics and technology have combined to enable vast FMCG networks to get agri-foods from the farm to the table.

The foundational requirements of the FMCG sector have always been clear. Fast. Trackable. Large quantities.

But today, distance is no longer the primary challenge. Rapidly changing technology cannot be ignored. The consumer is demanding. They have ever-changing needs. They demand the best customer experience that technology can provide; they are increasingly conscious of ethics, brands, and carbon footprint; and yet they still expect to pay the same low prices to consume agri-food products when they want them. The omnichannel has emerged as a way to mount a real-time response to the ever-evolving consumer.

And sustainability shines a (blow)torch on everything. Efficiency. Energy. Carbon footprint.

The answer is yes.

What are the ecological impacts of the FMCG supply chain? Perhaps this question should have been asked, and addressed, more than a century ago. But in an age where global overshoot has become a serious topic of discussion, it is now the most important question for the sector.

Storage. Bulk transportation. Final-mile delivery. Energy use. Wastage due to perishing. These things all create impacts on the environment, and it is the responsibility of the FMCG sector to find ways to move high volumes of agri-foods as lightly as possible from the farm to the table.

Players in the FMCG supply chain are fortunate that solutions to reduce their ecological impact will also help them address the challenge that has always faced the sector. According to Séverine Demange, FMCG sector expert at FM Logistic, ‘Everyone explores different strategies, but the main problem lies in the low monetary value of many products.’

The FMCG sector’s challenge is to make the distribution of low-value agri-foods in large quantities profitable in the long term.

FM Logistic’s Sustainability and QHSE Director, Penelope Laigo, says the sustainability challenge for the food industry is two-pronged: to decarbonise and reduce wastage.

At the Supply Chain Summit, a round table hosted in October in conjunction with the SIAL Paris 2024 conference, she explained that decarbonising meant rethinking the model. In addition to alternative fuels and multimodal transport, she said, ‘[t]he real revolution lies in shortening supply chains. Saying goodbye to the centralised model … is a giant step towards a reduced carbon footprint.’

Thus, every efficiency that can be squeezed out of a supply chain; every collaboration and synergy; every innovation that saves time and energy; every delivery with zero wastage – all these solutions that combine to address the age-old challenges of the FMCG sector will also reduce its impact on the environment.

A small footprint treads lightly on the earth.

Here at FM Logistic, our core business is FMCG. Our ethos is “Supply Change”. We aim to develop continuously improving and responsible supply chain models that foster changes for the good.

Building on our historical experience in the FMCG sector in the areas of warehousing, handling, and transport distribution, we seek new solutions, new ways of doing things, new collaborations, and new technologies.

In short, we seek the supply chain of tomorrow, today.

Twenty years ago, we introduced our ‘Industrial Pooling’ concept. Goods from different manufacturers that are intended for the same distribution networks are combined, sent from the same points of departure, and taken to the same receiving facilities.

We pool resources in our shared centres under our ‘One Roof’ system. Managing the activities and flows of each of our clients within a single facility enables a smaller carbon footprint and faster flows through our clients’ various channels, meaning quicker stocking of shelves and, thus, fuller use of the shelf life of agri-food products. These innovations and sustainable practices have led to less wastage and reduced emissions and energy costs for us and our producers.

FM Logistic was the pioneer in collaborative logistics and shared supply chain management. Today, FM Logistic France coordinates the largest pool in Europe, serving seven manufacturers, six brands, and moving one million pallets per year.

Pooling meets the challenges of agri-food manufacturers perfectly. 

All of these initiatives have helped FM Logistic to reduce wastage and damage. We have improved our energy efficiency. We measure CO₂ emissions accurately. We reduced our carbon footprint by combining operations and functions and benefiting from synergies under our One Roof concept. And local solutions have enabled us to behave like a local player – but with the strength of a global company.

Before we discuss the exciting future in the FMCG sector, we need to talk about the exciting present.

In Penelope Laigo’s view, the defining challenge of our generation is slow logistics. We’ll let her explain the concept in her own words:

‘At FM Logistic, we firmly believe that slowing down the flow of goods can only bring virtuous dynamics for our clients and the industry. Slowing down allows us to consolidate these flows and optimize their management, by leveraging more responsible alternative transport solutions, such as rail for long distances.’

In addition, FMCG supply chain participants cannot lose sight of the customer. Today’s agri-food customers have far more choice than ever. Thus, they have power. It would be a big mistake to ignore customers and their ever-changing requirements.

We introduced the FMCG customer at the start of this article: a multi-faceted, multi-channel, multi-device person who buys more by desire than need and who appreciates brands and businesses that align with their values. They’re in a hurry, they want things when they want them, and to be able to buy them in the way that is most convenient for them at the time.

Sounds like a job for the omnichannel.

The future of the FMCG supply chain is exciting.

Yes, the FMCG supply chain will likely use automation and robots to achieve further efficiencies.

But here at FM Logistic, we are most excited about where the consumer is going to take us, because what they want and how they want it will help us to become more sustainable.

The omnichannel seeks to provide consumers with a seamless experience across every channel available to them: email, text, in-app, social media, mobile, online. And in-store, of course. According to Demange, ‘Over the past few years, the demand for omnichannel solution has evolved significantly. It has become essential to master omnichannel…’

We see a big future for the omnichannel in the direct-to-consumer and B2B spaces. 

As consumers grow more discerning regarding the provenance of the agri-food products that eat, they will increasingly want to source them directly from the producers. FM Logistic stands ready to enable farm-to-table links to meet this growing demand.

The omnichannel strategy is growing in popularity amongst our business customers. It provides a single, clear, real-time view of the consumer that enables personalisation and tailor-made solutions. B2B can say goodbye to ‘one size fits all’.

Furthermore, the omnichannel enables e-commerce and pallet packing to coexist in one location – both still very important logistics streams for FMCG.

Finally, it enables robust measurement and optimisation, which are vital for continuous improvement in profitability. And, most importantly for everybody, sustainability.

FM Logistic, a global company with a local mindset, is excited to tread lightly into the future with the FMCG supply chain – an exciting future for both agri-food producers and their consumers.