A report undertaken by Economist Impact entitled ‘Food 4.0 Technology in Agriculture and Food’ was compiled from an extensive primary and qualitative research survey commissioned by SGINNOVATE between July to October 2021.
It evaluates the adoption and potential of emerging technologies in the agriculture and food sectors.
Economist Impact conducted a primary research survey of 100 respondents covering small, medium and large corporations (with over 100 employees) in the 3 agri-food sub-sectors of agritech, agri-food supply chain, and foodtech.
The survey gauged the perspectives of business decision-makers on the adoption of emerging technologies, drivers and challenges behind adoption, and the prospects of these technologies in the sector. The survey covered 7 key countries namely Australia (19%), Israel (6%), the Philippines (15%), the Netherlands (14%), Switzerland (8%), Singapore (18%) and the US (20%).
For the qualitative research, Economist Impact interviewed 14 relevant industry experts.
Key findings of the research are as follows:
- Combined impact of land degradation and rising food demand is driving a food security crisis. Businesses are adopting emerging technologies like precision farming that can improve agricultural productivity through effective big data analysis (eg. using of IoT and AI). The survey showed that 31% of businesses are interested in adopting AI in the next 5 years.
- Effective use of data to address issue of food waste, which remains an important challenge in tackling the food security crisis. About 30% of food produced globally ended up as food waste.
- New ways of producing food are needed to meet rising demand in the future for eg. indoor and vertical farming, in which Singapore is showing the greatest interest (38.9%).
- The economic benefits of technologies play a critical role in business adoption, however many organisational factors drive and hinder the adoption of new technologies. Almost 79% of respondents gave high priority to the need to improve business operations and save costs as drivers for technology adoption. However, high costs (41%) and lack of funding (34%) seem to be the main barriers to technology adoption.
- Alternative proteins can help reduce agricultural emissions but are heavily influenced by regulatory hurdles and consumer approval
- Covid-19 pandemic has changed consumer behavior, visible in a boost in demand for personalised nutrition. Consumers are increasingly looking to ‘food as medicine’ to boost immunity and build resilience.
- Emerging technologies such as blockchain in the food supply chain are being adopted by businesses which are prioritising food safety in response to consumer concerns. About 78% of respondents consider food safety as an important factor in their decision making.
The world is currently facing an unprecedented challenge – food insecurity – brought about by warmer climates which led to declining agricultural productivity, exacerbated by the ongoing Covid-19 pandemic.
Economist Impact highlighted that global food supplies will face unprecedented pressures in the coming decades. A growing population followed by increasing urbanisation, is expected to drive a 35-56% increase in food demand from 2010 to 2050. The pandemic and other diseases affecting both men and livestock will pose an increasing challenge to the food supply chain, and amplify the demand for reliable, fresh and local food products.
To overcome these major obstacles, companies need to adopt emerging technologies and the survey seek to identify the potential market for these new technologies and the challenges in adopting them.
The following are some of the major findings of the report:
Agriculture biotechnology is estimated to grow at 10.7% annually from US$43.8 billion 2021 to more than US$100 billion in 2030. This sector involves the use of latest technology to increase crop resistance to pests as well as the use of genetic modification. It also includes the adoption of smart farming to boost productivity.
Chart 1.0 showed the various new technologies that companies have adopted or are interested in adopting in the near future.
The report also highlighted that the pandemic has accelerated online food delivery business within foodtech. The heavily hit food and hospitality industries, disrupted by lockdowns, have quickly moved to providing online food delivery services to meet consumer demands. In a survey done by Euromonitor for Southeast Asia, one in four (26%) consumers were new users of online food delivery services during the pandemic. Online food delivery is the leading service under foodtech, attracting more than 48% of total investments, driven by unicorns such as DoorDash and Deliveroo, headquartered in the US and UK respectively. The combination of AI, robotics and automation are also transforming food delivery methods.
Meanwhile, alternative proteins are gaining popularity and acceptance due to growing sustainability concerns among consumers. In addition, several disease outbreaks in recent memory that include Covid-19 (affects human) and African Swine Fever (affects pig herd) have accelerated concern around food safety and hygiene in the agri-food industry. This could be a ‘push’ factor in favour of this new category. The report showed that consumer preferences act as drivers for technology adoption by companies in the agri-food tech sector. (see Chart 3.0)
In conclusion, the Economist Impact Report also suggested the following emerging technologies/solutions to overcome the global food crisis – namely the rising potential of plant-based and cultured meat to tackle the world’s sustainability concerns; growing potential of using big-data technologies like IoT, drones and AI in improving farm productivity and reducing food waste; creating a blockchain ecosystem to improve food safety which can be adopted by all players; use of biotechnology, AI and 3D printing to meet consumer demand with regards to personalised nutrition; and the adoption of vertical farming in resource-constrained countries together with the application of agri-biotechnology to boost productivity in large-scale farming.
(Note: SGINNOVATE is a private organisation owned by the Singapore government with the goal of supporting Deep-Tech startups)