Addressing food sustainably with Artificial Intelligence

With an increasing global population, the urgency to find new and innovative ways to address food demand is felt around the world. Since 1970, fish farming has existed in the Nordics and developed into a major industry. Norway Royal Salmon (NRS) is a leading producer of sustainable salmon, selling about 70,000 tons of salmon every year. This equates to one million salmon meals per day, all year round.

In the harsh and sometimes dangerous environments of the most northern parts of Norway, NRS sought to increase the safety of its employees, reduce operational costs and prioritize sustainability of Nordic aquaculture.

Through an artificial intelligence (AI) for salmon analytics pilot, ABB and Microsoft co-created a solution with NRS to produce quality food in a safer and more environmentally responsible way. The pilot showed that NRS can increase the efficiency and safety of its workers, who now aren’t required to be at open sea as often as before. The new technology will have an impact on the CO2 footprint due to less operations and better fish welfare, resulting in cleaner seas and improved efficiencies.

“Norway Royal Salmon has always focused on extensive research, development, cooperation and innovation,” said Arve Olav Lervag, COO Farming, NRS. “To continuously improve sustainability and increase the safety of our individuals, we worked with ABB and Microsoft to co-create innovative ways that empower us to achieve more on every level.”

ABB and Microsoft implemented technology with remote visual object detection for biomass estimation and fish population counting. The technology will monitor the growth of the salmon and reduce the workload of NRS workers, while providing an edge in collecting critical data from the production of salmon.

Underwater cameras capture images of the salmon in their submerged fish pens, floating kilometers offshore at sea. A layer of AI on top of the video footage makes it possible to measure and count salmon automatically.

“ABB is fully committed to helping bring about a more sustainable future, and here we’re using AI to revolutionize aquaculture and deliver on that promise,” said ABB chief digital officer Guido Jouret. “By monitoring fish health and performance, to minimizing environmental impact and reducing operational costs, ABB Ability is enabling NRS to reach a new level of competitiveness.”

The solution is powered by Microsoft’s Azure cloud and ABB Ability, which delivers ABB’s deep domain expertise from device to edge to cloud to empower customers know more, do more, do better — together.

“The collaboration between ABB, Microsoft and NRS has been highly innovative in this project,” said Christian Bucher, Global AI Specialist, Microsoft. “All parties embarked on a journey with a strong commitment to a sustainable food future. Only through such co-innovation and co-creation between engineering teams and the customer, could we realize maximum benefits. In just a few months, we went from ideation to the on-site solution installation.”

Technology helps food and beverage companies overcome market instability

The rapid uptake of Artificial Intelligence (AI) is dominating today’s business landscape, and its rising impact can’t be ignored.

A 2017 survey of large Australian businesses revealed that 89 per cent had already rolled out some form of AI, and that 70 per cent of senior Australian executives see their future business strategies hinging on this exciting new technology.

Why the sudden interest in AI? Because well-executed AI unlocks unprecedented opportunities for growth.

According to recent forecasting by Gartner, new business revenue created via AI will amount to $300 billion by 2020.

READ: Artificial intelligence boosts wine’s bottom line

Clearly there is an opportunity for food and beverage companies to help themselves to a slice of this growing revenue pie. How? By effectively and flawlessly bridging the increasing disconnect between market volatility and revenue growth.

In today’s food and beverage industry, international competition is growing, margins are thinning and the price of commodities is constantly changing. Added to these pressures, are multitude of factors — from increased labour costs, seasonal trends and changes in consumer demand – that can create profitability obstacles.

In this tumultuous environment, manual pricing and quoting methods are no longer agile enough to deliver sufficient revenue. Without the ability to address market fluctuations as they occur, companies feel the effects of margin leaks. And this is where AI comes in.

AI can unlock big data and analytics to give food and beverage companies the insight to respond in real time to market instabilities, quote the right price at the right time, close more sales, and protect margins.

To maximise success, David Bray from PROS suggests that food and beverage companies prioritise the following three key capabilities when implementing AI-powered revenue management systems:

Get the picture: Analyse sales for a clearer understanding of which products drive overall profitability. When you know what your most profitable products are, you can prioritise these should you need to make a strategy pivot.

Find your price points: Map customers’ price sensitivities and reactions to pricing spikes. Find out the price points that cause buying behaviours to decline; and the price points at which buying behaviours increase.

Real-time response: Adjust prices dynamically to account for shifts in underlying commodity prices, changes in market conditions and up-to-date supply information. AI-enabled dynamic pricing technology takes all variables into account to formulate winning pricing strategies.

“AI-powered dynamic pricing technology delivers a number of tangible benefits,” Bray said. “It automates processes, so companies can streamline operations. The technology captures more sales with faster and more accurate quoting, and drives additional revenue from cross-sell opportunities,” he said.

According to Gartner Research, robust price optimisation strategies can increase margins by 50 basis points or more, and increase revenue by up to four per cent. Multinational dairy company, Fonterra, is one such example – after implementing a new dynamic pricing revenue realisation system, it achieved a 2-4 per cent margin uplift, equivalent to $20 million per quarter.

AI-based technologies are reshaping how companies around the world do business. A considered, strategic implementation of high-level AI-powered functions will ensure your business can override market instabilities to grow revenues and outpace the competition.