In an environment of ever-increasing pressure to adopt new technologies in food production, companies struggle to identify which technologies they should adopt, and who they should work with to do so — not to mention how to pay for them.
According to the Royal Bank of Canada (RBC) and tech-giant Microsoft, these three barriers reduce the competitiveness of a significant portion of Canadian businesses. They say it applies particularly to mid-level food manufacturers.
In response, the two companies are now trying to make tech adoption easier through a program called Go Digital.
Why it matters: A program designed to help ease businesses into new technologies will help those companies become more competitive.
The company says the program is designed to remove the three barriers by leveraging Microsoft cloud and Partner Network, as well as innovation financing and financial advice from RBC.
Through consultation, Canadian companies can garner recommendations from Microsoft on what tech is most relevant to them, and access tech-specific financing through the bank.
Niranjan Vivekanandan, vice-president of business financial services for RBC, says Canada’s food sector — identified as a manufacturing area with significant digitization potential — is part of Go Digital’s initial focus.
Food quality, product monitoring, inventory predictability, and production predictability are all examples of aspect of food production that can be improved, he says. Solutions are expected to focus on artificial intelligence, cloud business applications, data analytics, blockchain, and the Internet of Things, which refers to digital platforms that aggregate data from a community of linked objects.
Tyler Whale, president of Ontario Agri-Food Technologies, says digital transformation ultimately means gathering data to more effectively generate return on investment. He applauds the RBC-Microsoft initiative for seeing a need and exploring it, despite not necessarily knowing what the outcome will be.
“It’s good to recognize that we need to put a little more as a country in all sectors, to apply new ideas and tech more aggressively to stay competitive,” says Whale. “Maybe more of an amplification in the food system is a little more important just because we are smaller compared to other global competitors.”
Potential impacts on farmers and the public
Vivekanandan believes greater tech-adoption by food manufacturers will “have ripple effects across the broader ecosystem,” including better food traceability for the Canadian public and other end-users.
The effects on primary producers, though, will vary based on what technology the manufacturer needs. A vegetable processor adopting blockchain to more rigorously certify production claims, for example, might affect the farmer and what information they can access. The same processor incorporating factory automation may not.
Whale adds true digital change and value can’t be achieved by just working individually, and says companies like RBC, IBM, WalMart, and others need to think bigger.
That means considering systems where information can be more openly shared across value chains, government, and the research community. Empowering farmers – the primary producers from which the food sector is based – to improve their businesses is also critical.
An example, he says, is the product-quality data system used by VG Meats, a Simcoe-based meat processor. Supplying farmers, that is, get paid more for a better product. The company analyzes the product, and makes that data – along with recommendations to improve quality – available to the farmer, who can then act on that feedback.
“If you don’t give farmers the ability to cooperate and evaluate their data, they’re going to lose out on the value of it […] If you’re not enabling them to take ownership of their own digital transformation, it’s not going to have as big an impact as they hope,” he says.
Vivekanandan says RBC’s interest in day-to-day management of food manufacturers — and manufacturers in other industries — comes from a long-term strategy to improve RBC’s business.
“We need to help Canadian businesses thrive. We think that’s a great outcome for our customers and ourselves.”