Many Canadian consumers have noticed how the price of lettuce has skyrocketed in recent weeks, as has that of celery. Such fluctuations happen all the time, regardless of whether Canadians are willing to accept them. Nonetheless, technological advances could make these occurrences a thing of the past.
Artificial intelligence is a hot topic these days. It’s nothing new, but many agree that we are on the cusp of a revolution in how we make decisions, how we manage things — almost every aspect of our daily lives. The agrifood sector is not immune to this phenomenon. While agriculture is an industry that has accompanied humanity since prehistoric times, cognitive technologies will change everything about how we feed ourselves, starting from the farm right down to the fork.
Our planet will need to provide food for more than 9.7 billion people by the year 2050. We are on target to achieve this, for one good reason: How we embrace data in agriculture is changing at an astonishing rate.
In order to increase yields, and to enhance plant and soil-science practices, farmers need data, and lots of it. Farms in the industrialized world generate an average of more than 200,000 data points per day. That might sound impressive, but by 2050, we can expect this number to be well over four million.
To limit energy and waste, farmers will need to know in real time how much fertilizer to apply, or what seed to use and where, so they can get the most out of their fields. They’ll be able to make better decisions. Farmers need all the help they can get, with climate change and nature being what it is.
In Canada, farms are behind in use of technology, compared to many in the U.S. and Europe. However, the recent investments in rural connectivity by both federal and provincial governments should help to bring Canadian farms up to date.
AI will also help to solve the problem of severe labour shortages in many rural operations. The UN predicts that almost 70 per cent of the world population will soon live in urban areas. In Canada, we have exceeded 98 per cent. While some Canadians do move back to the countryside to seek a different lifestyle, most of these will keep only a hobby farm, at best.
With the help of cognitive technologies, many operations can be done remotely. We might be years away from the “farmerless farm” concept, but the need to hire more workers could be alleviated. These measures will lead to more consistencies, and yes, fewer losses. Most important for consumers, retail price fluctuations could become a thing of the past, or at least less frequent.
Agriculture will not be the only sector affected by increased use of AI. Robotics, machine learning and AI will also be some of the key game changers for the retail grocery sector. Running stores by “gut-feeling” can only be so effective.
The typical food-store manager deals with more than 50,000 products or SKUs, which is more than six to eight times what it was a few decades ago. To optimize any food store, a typical management team will be required to make between 1,000 and 1,500 decisions on a given day.
There are simply too many calls to make them manually, especially in an environment where margins rarely exceed two per cent.
The most visible change for consumers coming from AI will likely be pricing optimization. Imagine a world of food retailing free of sticker shock. No more sudden appearances of $8 heads of cauliflower, or overpriced lettuce or celery due to unforeseen macrosystemic circumstances.
With AI, grocers can set acceptable price ranges for any product, and prices could change by the hour, depending on inventory levels and fluctuations in demand. Since fresh produce constitutes about 40 per cent of sales from a typical food store, striking the right balance is key.
The window in which to course-correct if an item does not sell could be measured in minutes or hours, rather than in days or months. For example, a chilly, overcast Victoria Day weekend does not generate the same sales as when the weather is sunny, hot and humid. Procurement, promotions — everything will require tweaking.
With AI, our relationship with food retailing will dramatically change over the next decade or so. In a few years, if you think a certain fresh item in a food retail store is overpriced, keep in mind that a computer probably told management that there’s a market for it.
Sylvain Charlebois is a professor of food distribution and policy at Dalhousie University in Halifax.
