Instrumented Interconnecteds Intelligent
August, 4th 2009

Major stresses are appearing in the global food value chain—recalls, price spikes, hunger and waste among them—and trends such as climate change, population growth, water shortages, plateauing yields and changing consumption will likely exacerbate these stresses. From the multinational agribusiness to the farmer working his small plot of land, food is being produced in unprecedented quantities around the globe. Most experts believe that enough food is produced to feed the world, but distribution issues, waste and diversion of food sources to other products such as biofuels mean that one billion people go hungry each day and 5.6 million people die of hunger every year, according to UN estimates. At the same time, more than one in three Americans over the age of 20 are obese.

Much of the food grown and raised is never consumed—as much as 50 percent of the world’s food supply may be lost or wasted between farm and fork. Food spoils in the field and is damaged in processing or in transit. The 2009 recall of contaminated peanuts from Peanut Corporation of America was the largest recall in FDA history, comprising 3913 products, impacting 200 companies down the value chain and sickening 700 people, eight or more of whom died. Food spoils or exceeds its shelf life while in storage, in the retail market and in the home. It is wasted at the dinner table and in the restaurant. And it is consumed too much by too few, as per capita consumption of meat and dairy are on the rise. Retailers cannot get food to their customers because of out of stocks, and overstocks leave much food unconsumed. The average Consumer Products company loses 2.5% of sales due to food items being out of stock.

All stakeholders in the food supply value chain are under enormous pressure to optimize their processes and safeguard the world’s food. Where will the solution to this food crisis be found? The UN secretary general has estimated that it will take $15 billion to $20 billion dollars a year in new investments and innovations in agriculture and food technologies to offset this crisis. Technology alone cannot solve the crisis, but the application of “smart” technology—instrumented, interconnected and intelligent—just might.

The world is rapidly changing, and these changes are placing unprecedented pressures on the earth’s natural resources and the man-made systems designed to manage them. These changes are profoundly impacting the world’s food supply, which is beset by crises ranging from skyrocketing fuel and ingredient costs to major shortages where food was once plentiful, from widespread product contaminations to escalating demand for high-quality, environmentally friendly products.

IBM brought together major stakeholders in the global food supply value chain, including members of The US Congress, USDA, FDA, industry trade organizations, academia and consumer advocates in Washington, D.C. on June 24th. This overwhelmingly-successful forum produced the following highlights and sparked the discussion that will continue with subsequent events including a series of webcasts coming up shortly.

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