Contents of Food Logistics - MAR 2012

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COVER STOR Y
Not surprisingly, the Food Safety Modernization Act (FSMA) is a major driver. "We're seeing more grocers, foodservice companies, and wholesalers really start to look at how they're getting prod- uct and the data that they're getting with it," says Mader. "Companies are looking for more visibility throughout their supply chain and they want information as quickly as possible, all the way down to the case level. And, if there's a recall, they want to know where they need to go in the sup- ply chain to correct that issue." In addition, more companies in the food sector are adopting product flow models that allow them to pull time and cost out of the supply chain, he says. "Grocers have really never done that before," Mader explains. "There are only a handful of them that are mov- ing towards more of a flow model. But, those that are can cut days out of the process by circumventing the traditional steps of receiving inventory, stocking it, pulling it back down and putting it on a truck for delivery." The flow model works in tandem with Manhattan Associates' Total Cost to Serve application, which takes into consideration inbound landed costs, DC costs, out- bound shipping costs, and inventory carrying costs, which can literally provide companies with "the 'total cost to serve' a single box of strawberries to the end consumer," explains Mader. Keeping the supply chain "fresh" is definitely a growing
trend, notes Kristin Wall, retail industry strategy manager at Manhattan Associates. She also sees more interest in the industry for local produce and organic produce. Not only is locally sourced produce attractive to consumers, but sourc- ing grapes from California or South Florida rather than Chile, for instance, equates to fresher produce on the shelves for a longer period of time, and quicker and cheaper trans- portation costs, too. Meanwhile, mass retailers continue to expand their pres- ence in the food sector, says Wall. "Target is redesigning their stores, pulling in more fresh produce and grocery items. Walmart has been doing the same thing. They're both really starting to hone in on the grocery market." And for Walmart, the concept isn't contained to the U.S.
alone. Since the company's first international foray—to Mex- ico in 1991—Walmart has expanded into 25 more countries. Currently, the company's international division is one of the fastest growing parts of their overall operations. ◆
Worldwide Food Production at Risk A
report from the United Nations Food and Agriculture Organization (FAO), released in late November, warns that a reduction of
viable land and water resources is putting worldwide food production at risk. According to the FAO, "Widespread degradation and deepening scarcity of land and water resources have placed a number of key food production systems around the globe at risk, posing a profound challenge to the task of feeding a world population expected to reach 9 billion people by 2050." The report, entitled State of the World's Land and Water Resources for Food and Agriculture (SOLAW), states that although the past 50 years have been marked with a notable increase in food production, "in too many places, achievements have been associated with management practices that have degraded the land and water systems upon which food production depends." Currently, a number of those systems "face the risk of progressive breakdown of their productive capacity under a combination of excessive demographic pressure and unsustainable agriculture use and practices," the report states. And, this is happening in every region around the world. As one would expect, competition for viable land and water resources will become
"pervasive," pitting urban and industrial users against one another as well as within the agricultural sector – between livestock, staple crops, non-food crop, and biofuel production. Developing countries are most threatened, the report says, because quality land, soil
nutrients, and water are least abundant. At the same time, "Water scarcity is growing and salinization and pollution of groundwater and degradation of water bodies and water-related ecosystems are rising," the report says. "Large inland water bodies are under pressure from a combination of reduced infl ows and higher nutrient loading — the excessive build up of nutrients like nitrogen and phosphorus. Many rivers do not reach their natural end points and wetlands are disappearing." Furthermore, "In key cereal producing areas around the world, intensive groundwater withdrawals are drawing down aquifer storage and removing the accessible groundwater buffers that rural communities have come to rely on. Because of the dependence of many key food production systems on groundwater, declining aquifer levels and continued abstraction of non-renewable groundwater present a growing risk to local and global food production."
As for the recommendations, the report emphasizes that, "Improving the effi ciency of water use by agriculture will be key. Most irrigation systems across the world perform below their capacity. A combination of improved irrigation scheme management, investment in local knowledge and modern technology, knowledge development and training can increase water-use effi ciency."
20 MARCH 2012 • FOOD LOGISTICS
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