News / Food supply chain players are getting a taste for diversification

Food shippers and retailers are increasingly attempting to diversify their sourcing locations to introduce greater resilience so their supply chains can withstand external shocks. 

The SVP of products and strategy at supply chain management and visibility platform e2open, Pawan Joshi, told The Loadstar a strategy to produce as much food as possible at the lowest cost led to a vulnerable reliance on specific locations for production. 

“What has happened over the past few decades is a natural concentration of production of rice, or wheat, or corn, etc in regions where it is easier and more economical to produce.  

“But when that happens, our supply chains get more fragile. If there are disruptions, such as floods, drought or wars, in those areas it creates problems, because those local disruptions then tend to become global.” 

Mr Joshi emphasised a need for diversification of supply chains, particularly at times of uncertainty.  

“If one part of the world goes offline or suffers supply constraints, other parts of the world can step in.” 

However, he noted: “Diversification of food is a little more difficult compared to some industrial production, because you can’t produce everything everywhere.”  

One example is Romanian fruit producers, who have traditionally been limited to selling domestically and to neighbouring markets, due to the lack of specialised equipment and infrastructure required to maintain the freshness and nutritional value of fruit. 

One such fruit producer, Agricrafters,  was selling its produce to other European countries, including the Netherlands, Germany, the UK and Italy. DP World, which operates Romania’s main container port of Constanza, came together in a project with French ocean carrier CMA CGM to provide the shipper with a series of controlled-atmosphere reefer containers that allow real-time monitoring of CO2, O2, temperature and humidity levels, and the ability to remotely adjust them if needed. 

Since last year’s summer harvest, 100 tonnes of fresh blueberries from Romania have made the trip across the Black Sea to customers in the Middle East, and Agricrafters aims to expand its Middle East exports tenfold this year, not just with blueberries, but also with fruit from other European countries, like Portugal and Spain. 

In a separate development, Etihad Cargo, Abu Dhabi Airports and Abu Dhabi Food Hub, which operates in Abu Dhabi’s KEZAD logistics zone, have signed a tri-party memorandum of understanding (MoU) to establish an origin-to-destination perishables air corridor, to be known as the Fresh Corridor 2.0.  

The initiative will support the UAE’s National Food Security Strategy 2051, and aims to “address the evolving demands of the food trade” by liaising with government stakeholders, relevant facilitators and key contributors from the food ecosystem. 

MD and interim CEOof Abu Dhabi Airports Elena Sorlini said the launch of Fresh Corridor 2.0 would encourage food trade between the UAE and the rest of the world, and would be “a bold step towards diversification and growth of imports and exports”. 

Abu Dhabi Food Hub CEO Suresh Vaidhyanathan added: “Our vision is to create an unparalleled ecosystem of sellers and buyers from around the world.” 

Mr Joshi concluded: “The idea is to drive more diversity, and therefore drive more resiliency across supply chains. Food tends to be one of the most important [commodities], for obvious reasons.”