South East Asia’s sustainable growth hangs in balance if future food security and food wastage left unaddressed

South East Asia’s fast-growing population and increasing food demand, coupled with escalating adverse weather and supply chain events, highlights the region’s future food security challenges that could be a hindrance to the development of its sustainable growth ambitions.

This was revealed at a recent event organised by SAP titled ‘A Growing ASEAN, A Hungry Population: Building Resilient and Sustainable Food Supply Chains’, which brought together business leaders across the region’s food ecosystem spanning agriculture, manufacturing, distribution, logistics – including Dole Asia Holdings, a worldwide leader and innovator in the production and marketing of high-quality packaged fruit and healthy snacks, and Loc Troi Group, a leading manufacturer and supplier of products and services in the field of agriculture with a sustainable value chain from research, production and sales of seed products, plant protection drugs, bio-organic products, rice and coffee.

Around a third of all food produced1 – or 1.3 billion tons – is lost or wasted every year according to previous estimates by the Food and Agriculture Organization of the United Nations (FAO), also contributing 8-10% of global greenhouse gas emissions2.

Experts and industry players cited the opportunities that lay ahead for South East Asia, among the world’s most productive agriculture regions, particularly on investing in driving high-tech agribusinesses, enhancing cross-industry collaborations, digitalising, and building resiliency across food supply chains and other activities along the value chain to bolster the region’s food future.

Transforming South East Asia’s food production

Agriculture and food are key drivers for South East Asia’s economy and GDP, forming a substantial proportion of the region’s workforce.

Empowering food producers with the right tools to meet the growing demand for food and combating food wastage are critical for challenges in the region – areas where technology and digitalisation play a critical role, according to Verena Siow, president and managing director of SAP South East Asia.

“As a start, we need to better utilise the food we produce to minimise wastage. Food security and sustainability is more of a resource management challenge, where technology can be a change agent.

“Given the diverse food industries across the region which spans from production to retail and restaurants, businesses need help in gaining better end-to-end oversight over their operations, forecast demand through big data to deliver food in a timely manner, and improve supply chain efficiency – all of which could greatly contribute to the reduction of food scarcity in a sustainable way,” added Siow.

Speaking at the fireside chat hosted by Siow, Leonardo Rabelo, chief financial officer of Dole Asia Holdings, outlined the company’s efforts to elevate agriculture practices, ensuring better harvests for farmers yet also driving sustainable practices to mitigate food waste across its large operational footprint.

“Minimalism is at the heart of our green habits in our journey towards zero food loss. Technology in Agriculture or Agtech is vital in shaping our progressive and proactive waste reduction agenda. The in-farm IoTs, phase tracking and end-to end digitalisation will be the new super powers to enable us to improve our quality and overall product value like never before and remarkably reducing waste. For the remaining waste our direction is to focus on upcycling it. To cite few examples we make banana puree, frozen banana, etc. In Dole, the ‘Art of possible’ and the magic of enthusiasm are our fruit-some way of achieving zero fruit waste,” said Rabelo.

Digitalisation giving a hand to food growers

As food demand continues to increase with population growth and a rising middle class, countries will need to look at ways to bolster domestic food security and boost local production, especially for import and export dependent nations in the region.

Fundamentally, greater technology and finance support is needed for farmers and food producers, to increase yields and have better real-time data of the health conditions of their crops, especially for regions vulnerable to climate change like the Mekong Delta – which accounts for nearly half of Vietnam’s rice production.

Nguyen Duy Thuan, chief executive officer of Vietnam’s Loc Troi Group, was also part of the fireside chat along with Siow and Rabelo. He shared about the company’s pilot of the world’s first rice sustainability standard with rice farmers across the Mekong Delta, to develop a sustainable, high-quality value chain, and eventually market Sustainable Rice Platform (SRP)-certified rice both domestically and abroad.

“Today Loc Troi works with more than 200,000 rice farmers and aims at one million farmers in 2024, on top of an annual rice milling capacity of six million tonnes. We leverage our foundations in agricultural knowledge in developing new crop varieties and resource-saving farming methods, along with applying technologies like drones and hospital mobile apps to provide consultancies for rice and fruit farmers. We were a member of SATForRice, a program by the Netherland government, which used AI in spectrum analysis and soil interactions to forecast next year’s yield, pests, and diseases risks. Loc Troi is working with farmers to obtain crop planting area codes and traceability through QR codes to promote Vietnam’s agricultural products in international markets,” said Nguyen.

Loc Troi recently underwent a digital transformation journey with SAP S/4HANA in 2020, which helped the group of companies standardise all processes to follow international best practices, improve planning capacity, and automatically track all activities across its business, and also maximise agriculture competitiveness and integrability.

Transparency, visibility a weak link in food value chain resiliency

With greater internationalisation of South East Asia’s food businesses, enabling a resilient and agile food value chain remains critical to drive future growth for the industry. This includes greater integration and collaboration across partners, along with digital supply chains that grant visibility across their partners’ operations and their own.

To accelerate the circular economy, SAP has also announced the availability of SAP® Responsible Design and Production, a solution for designing products sustainably to help businesses increase their measurement and data management capabilities. The new solution, now available across South East Asia, helps companies gain better visibility of material flows through their processes including tracking and complying with rapidly changing regulations, especially those concerning product packaging and plastics.

References

1 FAO (2011): Global Food Losses and Food Waste – Extent, causes and prevention

2 UNEP (2021): UNEP Food Waste Index Report 2021 A screenshot of the fireside chat with SAP South East Asia, Dole Asia Holdings and Loc Troi Group