agriveda

Agri.How is the business strategy division of Agriveda Pvt. Ltd.

Agri.How provides strategic support to entrepreneurs and enterprises for concept and business plan development.

For more details: https://agri.how/

dotAgri is the media publishing division of Agriveda Pvt. Ltd.

dotAgri shares actionable insights in food and agri to make informed decision for professionals in the field

Fair Trade: A relentless idealism or a way of creating sustainable agri value chain?

Fair trade, a popular concept among consumers in western Europe and the US, ensures everyone involved in the making of a product is fairly paid; there is no child labour or forced labour; there is gender equality; and there are no damages to the environment.

Understanding the concept:The movement was born out of concerns over western consumers exploiting farmers, artisans and labourers in…

Do you know what you eat? Transparency for consumers is an attractive rallying-cry.

European food manufacturers did nothing so dreadful when they sold horse as beef in burgers and lasagne. Horsemeat is not dangerous and had been a part of a lot of Italian and Chinese gourmets.

Yum Brands, owner of KFC restaurants, the largest chain in China by sales, found this to be true that the chicken served at its restaurants was unsafe.  From the company that once boasted that its fried…

Well, now we know what not to do. Makers and sellers of processed food are under pressure

“Well, now we know what not to do.” After decades of rising sales and high popularity, makers and sellers of processed food are under pressure. Stringent regulations, negative media campaigns, declining popularity, shrinking margins and consolidation are the trending words in the food processing industry.

American market share of food and beverage producers (Source: Credit Suisse & Economist.com)

Business Failures – Investigating 10 major reasons of failure in food processing

When it comes to business, food processing seems to be an obvious choice for most of the entrepreneurs. There could be a considerable number of reasons for this apparent choice. Some of the prominent ones could be:

Our exposure to a range of food available in our vicinity and our food consumption habits.

Media speaks a lot about food losses and food wastage in the developing and developed world.

The idea of extracting valuable ingredients from waste products and processing by-products is not a new one but new extraction technologies and increasing demand for natural ingredients could open up new avenues for extracting value-added ingredients. Food wastes are today considered as a cheap source of valuable components

Exploitation of the entire plant tissue could have economic benefits to producers and a beneficial impact on the environment, leading to a greater diversity of products directed mainly to human usage. As more legal requirements are implemented, the food industry will be increasingly obligated to prevent waste. The French penalty system (which fines supermarkets for wastage) and Italian incentive system (which rewards them for donating surplus food) actively encourage waste prevention.

Before going further, let’s have a look at few daily news statements in food waste category:

Food Waste Newsfeed

Food Waste Newsfeed

Every year 100 million tonnes of food are thrown away in Europe, and this figure could reach 120 million by 2020

Land the size of China, Kazakhstan and Mongolia is used to grow wasted food every year

1.3 billion tonnes of food are wasted every year, enough to feed 2bn people

Food waste costs EU €143 bn per year and 795 million people do not have enough to eat

In UK, it is estimated that up to 1.2 million tons of bread are wasted each year. More than 95% of this wasted bread goes to landfill where it is converted into methane.

The researchers said that in the fruit and vegetable industry, one third of the product being discarded in processing.

Around a billion tonnes of banana plant stems are wasted each year, despite research indicating that it would only take 37kg of stems to produce a kilogram of fibre.

In Europe alone around one million tons of potato pulp are produced every year – of which only a minimal amount is utilised.

Annual production of peanut meal in the USA alone is around 100,000 tons.

8 million tonnes of orange peel is generated annually in Brazilian orange juice industry

From these news statement, we can judge the huge untapped potential in food waste category. This untapped potential is converted into sustainable business by young entrepreneurs. Let’s have a look at 10 most commonly produced products out of food waste:

Juices

Sorting and grading of fruits

Fruit rejects in the field

  A carrot may have two legs, an apple might be dimpled, a cucumber might be slightly discolored — all of this leads to ‘rejectsʼ in the food system. Approximately, one-third of a farmerʼs total harvest is lost due to the aesthetic standards of retailers. Contrary to popular perception, these rejected fruits and vegetables (based on aesthetic standards) are as fresh and delicious as their perfect counterparts. By sourcing these misfit fruits and vegetables, companies are developing sustainable juice and beverage production business.

Fruit flour from seed, skin and pomace of fruits

Gluten-free foods could benefit from highly fibrous fruit flours developed from the by-product of juice and cider production. These by-product flours are high in dietary fibre and have high antioxidant properties. Eg. for the gluten-free bread, rice flour and potato starch is blended with the fruit flour and for extruded snacks fruit flour is mixed with maize flour. The blending is done to balance the taste impacts as well as provide key structural requirements needed for gluten-free bakery and snacks products

Antimicrobial and Antioxidant foods

Cranberry pomace, a by-product of the juicing process, may be extruded to produce a range of polyphenol-rich ingredients for use in supplements or functional foods. The resulting product could be incorporated into a dietary supplement or explored as a functional snack food. Cranberry has long been considered an effective method of fighting urinary tract infections

Antimicrobial and antioxidant potential of ethanolic extract of mango seeds can be used to enhance the shelf life and to increase the antioxidant capacity of fresh-cut mango

Phenolic extracts from olive oil mill waste can be used as alternatives to synthetic antioxidants in order to increase the stability of foods. Disposal of olive oil mill waste causes serious environmental problems, as many of its constituents are not easily degradable

Onion wastes are an interesting source of phytochemicals, sulphurous compounds and natural antioxidants. Brown skin shows a high concentration of quercetin, aglycone and calcium. Outer scales could be used as source of flavonols, with good antioxidant activity and dietary fibre content

Antioxidant waste from the soy industry could offer a cheap and healthy alternative to synthetic antioxidants that prolong the shelf life of food. The appreciable concentrations of flavonoids, along with phenolic acids and other antioxidant phytochemicals present in soybean might be responsible for their free radical-scavenging activity

Industrial by-products from tomato processing contain a significant amount of bioactive compounds that could be used to provide natural and sustainable source of antioxidants for functional food formulation, or to act as preservative ingredients in foods

Similar to wine and grape juice, which are known to contain natural antioxidants, up to 50% remain in the waste material left behind when the skins, stems and seeds are filtered

  Pectin

Each ton of dry cocoa bean produces ten tonnes of cocoa pod husk waste. An average of 10 grams of pectin could be extracted from every 100 grams of husk by-product. This way for each ton of dry cocoa bean production, one tonne of pectin could be extracted from the husk waste. Extraction of pectins from the main by-product of cocoa production would not only help to reduce the costs of the production of cocoa products but would also manage the disposal of this waste in an environmental friendly manner through the use of a natural and safe food additive

Waste orange peel is an excellent example of a wasted resource. By volume, half the orange fruit is left as waste once the juice has been recovered. Use of technology could allow the generation of valuable food ingredients like pectin on large scale. The ‘greenʼ approach could help dispose of waste products whilst also turning a profit.

Potato pulp “is an underutilized material produced in large quantities by potato starch factories. Potato waste could provide ‘new generation’ of food ingredients like pectin. Extraction method promises large-scale extraction of potato fibres rich in pectin and functional hydrocolloids.

  Enzymes

Through solid state fermentation, it is possible to develop a multi-enzyme solution rich in glucoamylase and protease from waste bread. In the last two decades, solid state fermentation has attracted interest in western countries due to its advantages in the production of secondary metabolites, and production of novel foods.

Waste from pineapple processing could provide a range of value added ingredients for the food industry, including a new source of the enzyme bromelain. Bromelain is an enzyme that is usually extracted from the stems or juice of pineapples. It has been used commercially in the food industry, dietary supplements, and the cosmetics industry – where it is known for meat tenderising, brewing, baking, and for the production of protein hydrolysates, among other things. Waste portions provided a significant yield of the enzyme with peel supplying between 29 and 40% by weight.

  High protein High fiber flour

Dried distillers grain, produced during ethanol processing has until now only found use in animal feed. The flour produced is a high protein, high fibre (36% protein and 40% fibre) ingredient that could be used as a substitute flour in a number of food applications

Peanut meal is the defatted, low-value, byproduct of commercial peanut oil production. Advances in enzyme technologies, coupled with new technologies to remove aflatoxin, may offer a way to produce the by-product meal, which is an excellent source of protein (containing between 45–55%).

Mushroom waste can boost fibre and lower glycaemic response in extruded snacks. Stalks and basal clumps retrieved from spent mushroom compost can be refined as a freeze dried powder called mushroom co-product material (MCM). The inclusion of MCM significantly increase the amount of total dietary fibre (TDF) in the extruded snacks

  Textiles

Textile from Banana fibre

Textile from pineapple fibre

Forget about cotton, we could be making textiles from banana, pineapple and coconut.

Banana fibre: The fabric is claimed to be nearly carbon neutral and have soft texture. The material is having application in making jackets, skirts and trousers.

Pineapple fibre: It is used as an alternative to petroleum-based textiles. The greatest thing is that itʼs made of leaf fibres, a byproduct of the pineapple harvest. The industrial process used to produce pineapple fibre also produces biomass, which can be converted into a bio-fertiliser  and the fibre is also biodegradable.

Coconut fibre: A thousand coconuts can produce 10 kg of fibre. A blend of fibre with polyester is particularly good choice for sportswear

  Fuel and Fertilizer

Organic waste from companies food processing plant can be converted into a renewable natural gas. Organic waste from the plant is converted into biogas through Anaerobic Digestion process. The biogas is then purified to become renewable natural gas which can be used in the same was as conventional natural gas. The renewable natural gas displaces conventional natural gas which is used to support the energy needs of the plant operation.

In addition, a high-quality fertilizer is produced as a byproduct which in turn is used to support healthy growth of local vegetation.

   Molds

Mold prepared using mushrooms and agriculture waste

Mold prepared using mushrooms and agriculture waste

Mold prepared using mushrooms and agriculture waste

The designer custom-made molds with a mixture of agricultural byproducts and mushroom mycelium, can result in lightweight, biodegradable lamp shades. Mycelium is introduced into a mixture of chopped up corn stalks and seed husks, and begins to spread its white fibers and digest it. Once coated in mycelium, the mixture is broken up into particles, which can easily be packed into molds, and left to grow for a few days until it forms a completely solid structure

Fats

Seed waste may be source of new fats. Fat from seed kernel ‘waste productsʼ could provide the food industry with a new source of edible oils. Eg. rambutan seed kernels provide a considerable yield of fat with high arachidonic acid content and that makes the fat highly stable to oxidation. Because of these physical and chemical characteristics, rambutan kernel fat is perfectly suited for the cosmetic and food industries. The increasing demand for oils and fats, whether for human consumption or for industrial purposes, necessitates the search for new sources of novel oils and fats. Fat extraction from seed waste could be as high as 37% by weight.

Field Map before harvesting

Harvesting based on Agri Data (Field Map)

Is there any data ownership which can be claimed by the farmer once the data is shared to third party (other stakeholders)?

Drone capturing field data

Interpretation of AgriData

Let’s understand an overview of agri data. Agri data is neither recognised under traditional type of property (land, building, good and animals) nor any traditional intellectual property (patent, trademark and copyright). Now, there are two situations left:

1. Trade Secret

Trade secret is some specific information available with the farmer which can’t be easily identified by another person and have some economic value.

Legal definition of trade secret: Information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

2. State law

For protecting agri data, government enact law to prohibit the copying and distribution of data without farmer’s consent. 

Maintaining and proving Agri Data as a Trade Secret is a very complicated and cumbersome process. There are no such Agri Data specific state laws as it is a very new topic in the legal fraternity. What’s the option then?

The only fool-proof solution left in the case of agri data is, “individual contract agreements to treat agri data as a protected trade secret”.

Contract Agreement must include 10 points discussed below.

Consent: Collection, access and use of farm data should include consent of the farmer with proper signed (or digital) agreement.

Notification: Farmers must be notified for the collected data with proper details about it’s usage.

Complaint Redressal: Proper complaint redressal mechanism with full transparency.

Features: Defining the availability of services and features when the farmer make choices for opt-in and opt-out.

Portability: Data portability and data retrieval for storage and usage in other systems.

Confidentiality: A clause for not sharing or disclosing the farm data with a third party in any matter that is inconsistent with the contract agreement.

Retrieval: Farmer should have the authority to discontinue the services and collection of data. Services discontinuation should be supported with an option of retrieval and secured destruction of collected data.

Misuse protection: Prohibition of data for anti-competitive activities like speculation in commodity markets based on inputs from the farm data.

Safeguards: Clearly define liability and security safeguards for loss or unauthorized access, destruction, use, modification and disclosure.

Policy: Notice and response policy for agreement breach.

General variety produced by small scale unorganised farmers. This can result in

plentiful supply and lean demand.

plentiful demand and lean supply.

Glut in supply, crash the prices and low production results in lower income for the producers respectively in the above two scenarios.

Tomato prices crashed

Apple prices crashed

Banana prices crashed

Pineapple prices crashed

Situation 2:

Specific varieties grown by a farmer and managed by a cooperative (or a producer organisation or a club). This can result in

Subdued sales of a particular variety and low consumer interest due to lack of marketing activities.

Sudden increase in production because good marketing ensures huge interest for a variety among the growers and consumers. This can cause sudden increase in production and crash of prices because of excessive supply.

The issues are more or less same in situation 1 & 2 as producers are losing in one way or the other.

Situation 3:

Cooperatives manage production and marketing of a IP (Intellectual Property) protected plant variety.

In situation 3, cooperatives can manage a proper balance in terms of quality and product volumes, ensuring higher returns to the members of the cooperative. A cooperative (or producer organisation or club) can ensure some unique marketing advantages because of its capability to manage the complete value chain from farm to consumers. They ensure proper legal protection to produce varieties in terms of patents, trademarks and geographical indicators.

Example depicting marketing of IP protected varieties by a cooperative

The case for “SweeTango,” a new variety from University of Minnesota that has a registered trademark. A small group of growers around the United States produces “SweeTango,” which is controlled by Next Big Thing Cooperative

Club (or cooperative) varieties are produced in restricted volumes by a selected group of growers.  Quality stays high, supply does not rise too much and demand stays strong, ensuring high returns to those growers who pay to be part of the club.

Trademark provides a way to differentiate products in the marketplace, create excitement and new flavors by controlling the volume in the market, and controlling the quality to elevate the premium.

Understanding IPR (Intellectual Property Rights) terminology and concept 

This is to recognise the form of intellectual property manifested in plant and seed varieties. As per the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement, countries are obliged to provide intellectual property rights protection for new varieties of plants – either by a patent or by an effective sui generis (class of its own) or a combination of both. The act is to encourage plant breeders to produce superior varieties and provide greater access to varieties from abroad. Patent and trademark definitions are explained below:

A Patent is an exclusive monopoly right granted by the Government to an inventor over his invention for a limited period of time. Patent grants the right to exclude any other person from practicing the invention e.g. manufacture, use, sale or transfer, make, import the patented product or process

Trade mark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours.

Example depicting practical implementation of the concept of IPR

Honeycrisp apple also know as Honeycrunch apple is patented by the University of Minnesota. They charged a royalty fee of $1 for every Honeycrisp tree sold until the patent expired in 2008.

Once the patent expired, apple varieties are trademarked to provide an additional layer of protection for the holder of intellectual property rights. Trademark offers exclusive rights to the owner to sell it for perpetuity.

Patent and trademark secure legal rights of the owner for his effort and investment for developing new varieties.

Branded apples in supermarket

Trademarked apple quality parameters

IP protected plant variety

IPR infringement leads to

In case, any grower infringes the intellectual property rights of others, then there could be imposition of penalties and grant of injunction (temporary or permanent) against the grower.

Injunction prohibits the infringer from continuing to market fruits produced from proprietary plants, uproot the plants and cease growing the protected variety.

Some key insights about produce marketing from developed nations

Fruits like apples are marketed by cultivar name.

Consumers buying habits are more inclined towards brands and varieties offering quality, flavour, taste and color.

In most cases, the substantial difference is about the marketing efforts and intellectual property rights, rather than the look and flavour of the fruit.

Note: To receive sample copies of legal agreement for Intellectual Property Rights Protection (Plant Variety and Trademarks), please drop us a mail at [email protected] or text your mail id in the reply section.

We have traced the journey of fresh-cut produce from the grower’s farm to consumer’s table. The main contributors to a fresh produce supply chain are input suppliers, grower, processor, wholesaler, retailer and consumer. Fresh, safe, natural and crispy products owe their safety and quality to a structured and integrated agriculture supply chain which is discussed in detail in the points below.

Grower’s farm

The preharvest and harvest conditions that affect produce quality and shelf life are related to: genetic factors (variety, strain); external environment (light, temperature, relative humidity, etc.); soil conditions (soil type, pH, moisture, microflora, etc.); cultivation systems (open field, protected, soilless, etc.); agronomic practices (use of fertilizers, pesticides, growth regulators, irrigation, etc.); harvesting (time, temperature, mechanical harvest, manual harvest, etc.).

Agronomists ensure every step to manage the product quality at the farm level. Pre-harvest stress conditions can impact the nutrition density, flavor and shelf life of the produce. Early morning harvesting impact the shelf life of produce because these are typically the coldest hours of the day, and allow for lower temperatures and respiration rates. It is cheaper to keep the produce cool at this time, rather than to cool it when its temperature rises

Lettuce inside the greenhouse

Greenhouse structure

Harvesting

Produce is tested at the field for maturity, color, size, sweetness and firmness before taking a final call for harvesting. Fresh produce is mostly harvested by hand because of its delicate nature. It is then placed on the crates for transportation to the factory in temperature controlled vehicles. Harvesting the produce at peak maturity ensures higher flavor and vitamin content than ones harvested at low maturity though harvesting at high maturity results in lower shelf life as fresh produce at peak maturity deteriorates more rapidly.

Good preharvest and harvest practices are necessary to reduce any product damage. The cold chain should, in fact, begin as early as possible, and be maintained from the field to the processing plant to preserve the quality of the produce.

Field packing has considerable economic advantages when it is practiced, in that it reduces physical structures, labor and equipment costs, and results in lower levels of crop damage.

Manual observation before harvesting

Harvested produce placed in crates

Produce is placed in trucks for transportation

Cold Storage (Raw Material)

It is often critical that fresh produce should rapidly reach the optimal temperature for short-term storage or shipping in order to maintain the highest quality, flavor, texture and nutritional content.

After harvesting, fresh produce is placed in the cold rooms to remove field heat and reduce the surface temperature. Temperature and humidity controlled cold rooms ensure that the product quality is retained for longer duration with maximum retention of micronutrients. Time of storage depends on factors like variety and demand. Ethylene sensitive fresh produce like lettuce should not be stored or transported with ethylene generators like apple.

Cold Storage of Fresh Produce

Cleaning and Washing

The first operation is to remove rejects. This involves the removal of overly mature, inferior sized, severely damaged, deformed or rotten produce.

The processing operations of fresh-cut produce include washing treatments to make the product ready-to-eat. The produce has to be clean, free of soil residue, insects, metals and weeds, and safe. Washing raw material before cutting and during fresh-cut processing is the most effective way of minimizing the risk of presence of pathogens and of any residue left on the produce from harvest and handling conditions

The effectiveness of washing to remove soil impurities and microbial contaminations is related to numerous factors, such as raw material, spoilage, the duration of the washing treatment, the washing water temperature, the method of washing (dipping, rinsing, or dipping/blowing), the type and concentration of the sanitizer and the type of fresh-cut fruit or vegetable. At the moment, the disinfection agents that are used and tested for water sanitation are chlorine, ozone, organic acids, hydrogen peroxide, alcohols, phosphoric acids, UV-C light radiation, ultrasound and others, including combinations of some of them for synergistic effects.

Cleaning extraneous matter

Washing – Turbulent Water

Washing – Spraying Water

Sorting, Grading and Inspection

The sorting and grading are performed manually by skilled workers. The tables and equipment should have a smooth, soft surface, and the dumping and grading operations should be gentle to minimize injury.

Sorting and grading ensures uniformity of products. Grading simply means different level of standards among the same product and help consumers measure the level of additional value. Producing fresh-cut product involves substantial mechanical injury due to peeling, slicing, dicing, shredding or chopping.

Visual inspection is done by operators and infrared optical selectors. infrared detectors ensure high quality selection standards

Manual inspection

Infrared visual inspection

Drying: Centrifuge and Air

An important factor for the stability of fresh-cut product is moisture control. After washing, the excess water should be removed from the fresh-cut product before packaging, to prevent rapid microbial development and enzymatic processes that lead to product quality deterioration. Various methods exist to remove washing water, including centrifugation, passing the produce over vibrating screens with air blasts, or blotting. Minimal centrifugation can leave residual water on the product surface, thus favoring microbial growth, while excessive centrifugation can result in cellular damage and cause cellular leakage.

Centrifugal drying

Air drying

Weighing and Packaging

A special high care zone is established, which requires low temperatures to be maintained along with the application of more stringent hygiene controls. This zone employs the use of the continuous air sanitization process known as ionisation. Low temperature and presence of sanitised air ensure quality of produce is not altered in any way during weighing and packing.

Packaging is not only the final operation of fresh-cut processing that allows the products to be distributed and safely reach the consumers, but also the tool which, together with the cold chain maintenance, allows the quality of fresh-cut product to be preserved and prolongs its shelf life. The aim of packaging is to create an atmosphere that slows produce respiration, so that the minimal necessary O2 concentration or maximum tolerated CO2 concentration of the packaged produce is not exceeded, and both fermentation and other metabolic disorders are avoided.

Packaging with detection system like Metal Detectors (for metallic impurities like steel) and X-ray (for non-metallic impurities like glass) ensures product is free from any foreign body.

Multi-head weighing

Carton filling

Cold Storage

Fresh-cut packaged products need to be stored at low temperatures (7°C) with 95% RH to slow the respiration rate, enzymatic processes and microbial activity. Storage conditions generally refers to the storage or holding temperature, the time/temperature and the RH which the fresh-cut products may encounter. However, other factors can play a role during storage, such as the effectiveness of the packaging material to preserve food safety and quality, the technical characteristics of the storage in the processing plant, and the cold chain implementation from the processing plant to the consumer.

Cold storage for final fresh-cut product

Quality Analysis

Product quality is guaranteed using chemical, physical, micro-biological and conformity tests. Safety issues of fresh produce comes from pathogenic microorganisms e.g. Clostridium botulinum, E. coli, Salmonella, Listeria monocytogenes, Campylobacter and not from pesticides. Pre-harvest contamination from manure, water and sludge are the major contamination contributors. Quality analysis also involves testing for chemical residues e.g. pesticide, insecticide and fungicide.

Microbiological Analysis

Chemical Analysis

Logistics, retail and consumer

Shortly after the packaging phase, all the products are transported, using refrigerated vehicles, either to the distribution platforms or else directly to the points of sale. Transportation in refrigerated trucks ensures freshness during logistics. The whole system ensures that the fresh-cut produce is as fresh as picked at the consumer end.

For consumers, appearance is the most important quality factor with specific emphasis on color. Other factors like taste, texture and freshness comes into the picture when the produce is consumed.

Transportation

Distribution Center

Retail Store

Household Consumption