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IOT Applications for The Food & Beverage Sector

The Food & Beverage Sector (B2B) | I.O.T. Powering The Digital Economy

IOT powering the digital economy brought to you by Schneider Electric with a booming world population comes a growing need for food and drink but as other needs grow so do our demands we want more choice is it organic where does it come from to satisfy so many demands the food and beverage industry is turning to the digital world in this program we’ll go to Sweden to find out how the world’s largest food packaging company is doing more than producing just containers we’ll learn how a disruptor company is helping commercial kitchens reduce the amount of food they waste and we’ll talk to an expert about the regulatory issues affecting food and beverage companies in the b2b sector

and we’ll find out what changes digital technology will bring the food and beverage companies in the future

Tetra   pak was founded in 1951 but it grew out of a company established in 1929 it’s evolved from its food cart and origins to become a tech partner helping household brands improve the efficiency of their production lines it’s still a privately owned company and its headquarters is still here in London Sweden Johanna Nielsen is the vice president of tetra Paks services he joined tetra pack in 1987 as a trainee service engineer so he’s seen a lot of transformation in the company

I asked Joe Han about tetra Paks business model and who it’s b2b customers are we have around 5,000 customers or a bit more than 5,000 customers in hundred 70 countries around the world this is large liquid food manufacturers dairy companies and other things such as Nestle all over the world yearly in China made in Japan we have Coca Cola Pepsi coca-cola Pepsi Co and these type of companies and we provide the material you know the card laminated cotton material closures the straws etc to make a juice or a milk carton we produce the all the all the equipment related to processing the milk and the juice etc and to package it and to put it into containers onto a pallet ready for retailers and then

we provide a large portfolio of services to make this an efficient operation for our customers one of the services tetrapack offers its customers its predictive maintenance predictive maintenance works in a way that you have sensors in equipment it can be vibration sensors temperature sensors torque sensors then you use that information so we take around 600 signals from a typical production line

we collect them through the cloud to a data center we have and then through algorithms you calculate remain able use of a lifetime so you see how vibration increases and then you know that when vibration in combination with a certain temperature reach a certain limits you know that there is just a short lifetime left that way you can predict when a failure will happen with a high degree of certainty

because it’s machine learning and with some of the deep learning technologies these algorithm proves all the time so you get more precise and you tell the customer in four weeks you are likely to have this failure can we please come in two weeks and make sure that we change this part so it will not break we had an example with a customer in Argentina where customs in Argentina is quite complicated

and it can take up to 96 hours to import a part that is needed if you can predict the need of that part a few weeks in advance those 96 hours doesn’t matter but if you can’t predict the need those 96 hours will cause big losses to food manufacturing and if you have 50,000 litres of milk in a tank that will not last for 96 hours if that piece of equipment or that production line cannot run

you’re in many countries around the world but your experts aren’t so how has digital technology helps you they’re there one of the areas is mixed reality and how you can connect people so we use hololens for example to connect an expert that we might have somewhere in a center in a technical center to anywhere in the world through skype or similar type of technologies that that makes the expert being virtually present on the factory floor within minutes so the guy that is in the remote location he puts on the hololens so the guy that sits with a tablet or a phone he sees exactly what the local guy says they can talk and he can draw

and he can pull up instructions he can pull up a lot of things and different types of information that helps the guy that is on site to solve the problem very quickly we use that in many different parts of the world today and that adds a lot of value because it’s instant support you can imagine the time it takes to fly someone from one place to another there is sometimes these are requirements that makes it take city weeks to get and these type of things there is other type of applications

so imagine that you’re going to build a new factory and you have this a big empty room and you want to see where am I going to place my machines and can I place them in a way so I can open all the doors and these things so it can work in practice what you do then you put on a set of hololens you walk around in this big empty factory you basically place these virtual machines in the factory

and then you just check that everything works and then when you have that you get your drawing you order everything so it fits perfectly you avoid these type of problems that there was a wall that you didn’t think was there when you check the drawing how do you measure the results of the tech that you’ve incorporated less failures you know less consumer complaints on a product for example can be an outcome financial savings you know efficiency improvements bottom line improvements of our customers

and so the payback for our customers is typically months and not years on this type of investment because the technology you add is not very costly and the savings can be huge what partnerships have you entered into though in the digital technology sphere to get these services going

we try to partner with a lot of the leaders in digital technology so Microsoft is one big partner for us of course we sometimes make some partnerships with these startup companies of three four guys you know who has a brilliant idea in a very specific field and we make a deal with them a little bit that we buy a certain amount of their capacity and then they help us work with solutions in the mixed reality world for example tetrapack is a long-established company in fact this is the prototype of the machine used to make the first ever one of these types of asian games in 1952 I’m off now to a new company using digital technology to help its customers tackle food waste winnow is a UK startup launched in 2013 it already has more than 600 clients using its smart kitchen tech this is its London HQ new building shared with other companies in the sustainability business Markham’s is co-founder and CEO of winnow he’d previously worked at McKinsey on food and sustainability

he told me why he launched winnow roughly a trillion dollars a year of food is thrown away that is over one-and-a-half percent of global GDP and it’s about a third of all food that is actually grown that is never eaten and to me that’s just shocking that we would live in a society where we allow that to happen and it’s almost a foregone conclusion to me that over the next 20 to 30 years

we’re gonna have to fix this issue right and so while I was at McKinsey we were doing some analysis that actually surfaced this issue as a problem and because I had a background in food my entire life working in different parts of the food supply chain and a passion for where business and sustainability met to create interesting opportunities I decided and I really felt compelled at that point in time to go build winnow to actually be part of solving this issue you’re harnessing digital technology

tell me how you do it the way we know works is effectively in commercial kitchens it’s very difficult to understand what’s being wasted where it’s happening and why these are busy operations they’re very complex operations and what winnow does is we provide a data platform for the kitchen on what they’re wasting to inform the chef’s on how they can run an operation better and there’s an old tenant that what gets measured gets managed are you saying that what’s disruptive about the tech you use is

that it’s changing behavior what’s disruptive about the tech that we use is we’re providing data in a place where data didn’t exist and we’re trying to provide that information in a way that will drive action Mark’s showed me how we know works this is what we know is it’s a scale that sits underneath a bin to automatically record that food waste and a tablet that would sit next to it to help you identify

what it was and collect the costs of what’s being wasted so if you if you were to imagine that you are throwing away some oranges like this right so you throw some oranges away just like that screen will pop up and let’s say that it was from breakfast so you would tap that that’s right it was fruits and then you select the item from there that’s two pounds 61 but over a year that’s nine hundred and fifty

three pounds that’s a lot of money yeah and just imagine sort of how often that will happen throughout a day in the kitchen and what that adds up to and then you would just simply throw away the next item so let’s say these are some carrots from the salad bar yep let’s say that it was from the core areas right and just like that’s 21 pence 77 pounds a year yep and there are sites we work with that’s start off throwing away literally thousands of pounds worth of food on a weekly basis what then happens is all that information goes up into the cloud gets analyzed to identify trends and then we provide analytics into the chef and into an operation that may have multiple sites fuel to help them figure out where they can improve performance what they’re doing with that information really varies it is everything from very simple bits such as are

we going to redesign our offer to be able to systemic ly prevent the food waste from being occurred it can also be being more thoughtful around how much gets prepared at any given time so that they’re not left over with food at the end it can also be benchmarking performance across sites and saying that this site is only throwing away 3% of what they’re buying but this sites throwing away 10

and fundamentally those are very similar businesses so why is that and let’s make sure that we learn from best practice who are you’ll be to be customers so we’re really proud to be working with some of the industry leaders in a number of key parts of the hospitality sector so we work with Compass Group the world’s largest food service company we work in the hotel space

with companies like a core hotels we work in quick service with Ikea and most recently we’ve begun to make headway into the cruise line industry with the Italian division of Carnival Cruise Lines which is cost across yetee how effective is it in doing the job so we find that when we put window into kitchens and they implement our system to understand what’s being wasted and take action on

that that ultimately they can cut food waste in half within their business and what that means for an operation typically means a three to an eight percent food cost savings with a lot of that flowing down to their bottom line but kitchens are very busy places how to star find the time to use winnow we focus our system on being dead simple to use it takes only a few minutes a day for a kitchen staff to use the system if you then think about the time that they are saving to not prepare that food that would have otherwise been wasted ultimately in the end we’re actually making these kitchens easier to run we’re actually saving

that time in the kitchen as a result b2b companies in the food and beverage sector are harnessing digital technology to help increase efficiency profitability and sustainability but wherever food and drink is concerned strict regulations are in place we’ll find out more in part to the complexity of the food and beverage supply chain creates big challenges for companies operating in the sector and for the regulator’s digitization looks set to help businesses navigate the increasingly stringent regulatory regime

Mike Jameson is segment president of food and beverage at Schneider Electric and an expert on the food and beverage industry if you look within food and beverage the main regulations are affected there’s really primarily two that are affecting it you know within the US and Europe that you have the EU general food and safety act and in the u.s. you have the the food Modernization Act as well the u.s. one is focus more on prevention and the European one is focus more on just general food safety

but both of them are based off of hasip you know hazard analysis and critical control points what are the main regulations which tetrapack must comply with there is some regulations in the food and beverage industries related to food safety of course we always try to be in the forefront of those we are well connected with the FDA and so so we always try to be in the forefront on the technologies

we develop and specially process control of how do you secure that these manufacturing processes that produce a septic product are stable and they always stay in condition and so we try to work very tightly with these authorities that set legislations around food and beverage but there are other challenges facing the food and beverage sector so if you look at food America means they buy materials from suppliers they buy raw materials so it’s been able to trace upstream to see whether these materials come from did they come from indeed where you thought you were sourcing them from if you look downstream

as well has been able to trace it all the way to the consumer as well because there may be many steps in distribution between leaving the manufacturing plant and actually getting to the consumer and the food can become contaminated by things like logistics by lack of cooling certainly the product can go off before that reaches the consumer

so the the manufacturer on b2b he really has to be in control of his complete supply chain because at the end of the day it’s his brand it’s his brand equity that’s affected if when it’s on the Shelf it has a problem that goes the same to the materials used in the packages for example there is FSC labeling you know for a stewardship council labeling that the the material used in in the packages comes from forestry where you plant more trees than you take out for example

and these things you’ve got to guarantee that what you’re producing is indeed what it says on the label that it’s free from allergens that your your sustainable sourcing you’ve got to start to have this transparency within your supply chain so digitization is the way to enable that so companies can’t

we have 15 years it’s a demand today now we need to start to prove it within the supply chain digitally mark stones at winnow says regulation around food waste is evolving quickly start with a bunch of countries that have targets to reduce food wastes so in the EU there’s a target by 2030 to reduce food waste by 50% you’ve also got countries like Australia and the u.s. adopting the same

what we are also starting to see is in areas like France they are beginning to ban food waste from being thrown away in supermarkets in other words if there was food that could have been eaten it would be illegal to throw that away and you were compelled to donate that okay on the other side you know we have a clients Costa Cruises who has food left over at the end of day that’s they’ve already reduced it now as much as they can but they would like to give that away however the regulatory environment in many of the countries they operate in is challenging to able to do that because it’s unclear if they have some responsibility for that food and so what cost has been doing is they’ve been working

for example with the Italian regulators to develop a law to help them to donate food waste in a way that both takes in the best interest of the recipient of that food but also allows the organization to feel like that’s a risk that they’re willing to take till to make those donations how does mark think regulations around food waste could change yet more

what I do see is a potential where customers or excuse me kitchens and organizations would be required to report how much food waste they’re generating and what they’re doing to address that problem and in that place frankly I think they’d be a win-win we have proven a number of times that monitoring

what you measure and preventing it drives the cost savings to the business drives an environmental benefit and drives a societal benefits so if we really are serious in the world about cutting food waste in half measurement is going to have to become something that everybody in the future digital tech will be instrumental in helping regulators maintain standards across the food

and beverage industry but what are the changes will digital innovation bring to the sector in years to come we’ll find out import 3 as the world’s population continues to grow and as consumers become ever more demanding b2b companies in the food and beverage sector need to keep looking for new solutions there’ll be new demands on food packaging companies like tetra pack

we still have a growing population in the world we still have a lot of unpacked product you know milk that is sold loose and these type of things with a lot of risks to food safety and so and as the economy grows in many countries more than retail moves into more and more countries and so the the desire to have packaged food is increasing among consumers a food package such as a milk package or a juice package will in the future of course be a lot smarter than what it is today it will be a unit of one it will have a digital identity these packages so how you can communicate with that package in terms of information you can scan it with an iPhone or something you can get a lot of information of the origin of the product

you might get a lot of other things I believe in the future where there will be other type of digital digitalized components on a package you know Digital inks for example that will change with temperature so you can check what temperature emit package has been in has it been out of the refrigerator too long or something and these type of informations will be on the package in the future then you have of course the things that put very specific demands on the packages itself is when you go to modern retail stores or other type of retail stores in the future like the ones Amazon experiment

we now where you have no checkout you go in you pick your packs artificial intelligence sees what you pick you just walk out and your credit card is charged dockers then you know the packs must be identifiable by digital technologies and that can be radio signals or it can be QR codes or whatever or it’s the placement where they are and these type of things so how systems communicate with packages becomes very important in that type of future food fashion has already had an impact on what you do you’ve got nut milks and vegan milks or all those kinds of things

how do you see those food fads affecting the way you do business in the future there was a time when milk was milk today milk is not milk milk is many different things as you said of course and it gets more individualized and that that adds a lot of complexity in production the way you drove efficiency in all types of manufacturing is historically was of course I make the batches longer and longer and longer I don’t want stops change overs and these things but with the increase of variety in assortment

you have to use these technologies so that the much changes becomes almost invisible so you have flying changes or these type of things and also how you pack things etc that’s where technologies such as robotics and handling of information along the production value chain sustainability within the food and beverage and beverage industry will continue to be a major major factor and digitization is only going to enhance it and support it and using sustainability so when you produce the product

how do you make sure you use less resources less water less energy less electricity less waste the population is growing fantastically there’s a shortage of farmland there’s a shortage of water so to meet this rising demand that comes from the increase in population we have to reduce waste streams right down to the consumer does that mean winners technology will have a place in domestic kitchens

I absolutely do see there to be value in finding a way to help homes measure food waste we actually did a trial with the UK supermarket Sainsbury’s where we put winnow in its large kitchen form into a number of homes and cut food waste by 70% saving homes hundreds of dollars a year there is a tremendous opportunity to help homes reduce food waste what digital tech do you think we’ll be using in this face in 20 years time Wow 20 years is a long way out I mean I kind of a likened where we are with food wastes in how we used to think about energy efficiency meaning that we should turn off the lights when we leave a room

and now we have motion sensors when we walk in that turned that off we have energy monitoring across the whole building so I imagine a smart kitchen of the future where perhaps there are robotic chefs that are cooking your food and all sorts of artificial intelligence figuring out kind of

what should happen and what I also see is I see a wave of investment coming in from venture capital to say actually kitchens and the home and smart homes is an incredibly interesting space to invest in and so I think that investment as it matures will really impact our daily lives in a very fundamental way if I think about the sci-fi programs and I was a kid we weren’t eating proper food it was all you know vacuum packed space dust and things like that and man that would be that would be depressing if food in the future is either vacuum packed or some sort of slimy goo that we’re all eating for nutrition right I really hope that a sustainable food future is one that’s delicious right one that is about something that

we can enjoy that is enriching and that brings us together as a community and while technology will drive a lot of change that social bond is something that’s been there for millennia and I don’t think it’s a minutes go change the digital transformation in the food and beverage sector is gaining momentum in an industry with complex supply chains businesses are using innovative digital technology to increase efficiency sustainability and traceability and fast changing ideas and appetites around food mean that this digital revolution is boletus beginning [Music] IOT powering the digital economy brought to you by Schneider Electric

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