The COVID-19 pandemic has exposed the vulnerability of the world’s agrifood supply chain and accelerated nations’ food security efforts in terms of production and distribution. Amid this scenario, digitalization has become a necessity and many industry stakeholders have had to quickly transform their logistics and points of sales to meet needs and demand.
In the UAE, the e-grocery market jumped almost fourfold from 2019 to the third quarter of 2020 and is now worth some $1.12 billion, according to one study. The sector is getting crowded but this has not stopped the entrance of a new B2C platform just last month.
Joining the long list of e-grocers is Food Crowd, that has a distinct competitive advantage: it has direct access to produce from its parent company, the agribusiness group Al Dahra that also deals in food commodities and supply chain management.
“Online presence is, undoubtedly, the future of retail with many players entering the market. We believe that quality, customer experience and efficiency are key to success, but in the long run, not many will last – our market is all about survival of the fittest,” Salmeen Al Ameri, CEO of Abu Dhabi-based Food Crowd and its parent company Al Dahra, told Salaam Gateway.
About 20% of fresh groceries on Food Crowd are sourced from Al Dahra’s own farms and the company has a strategic partnership with Abu Dhabi Agriculture and Food Safety Authority to support local farmers, said Al Ameri.
“We have local sourcing from our farms within the UAE, Serbia, and Egypt and this ensures quality and freshness as we have tight control over the supply chain, added Al Ameri, who is also a board member of Abu Dhabi-based F&B company Agthia.
Al Dahra is 50% held by Abu Dhabi state-owned holding company ADQ, that actively contributes to national food security efforts. ADQ in September announced the establishment of a new food wholesaler Silal that will manage offtake programs and UAE’s strategic food reserves.
Al Dahra will use Food Crowd to market and position its products in the UAE, enabling it to further contribute to the country’s food security strategy. “Al Dahra has partnered with the UAE government to execute the nation’s food security vision aiming at preserving national water resources and ensuring self-sufficiency and sustainability of key commodities supply,” said Al Ameri.
Food Crowd believes it can give consumers more competitive prices because of its direct access to agricultural producers such as Al Dahra. “By eliminating the middleman, we are able to offer competitive prices. We are also the only organic chicken producer in the region, and that allows us to place our product at a good price in the market,” said Al Ameri.
The Food Crowd – Al Dahra model is a luxury that not many on the supply and demand sides enjoy. For them, third-party agents or middlemen are still needed to distribute and sell their produce and supplies. Here, digitalization in the form of B2B e-commerce has been helpful.
In the B2B sector, dedicated halal marketplaces DagangHalal and Zilzar have failed to gain traction while Aladdinstreet is undergoing a reboot. The one platform that has continued to build on its capabilities since 2017 is Singapore-based OneAgrix.
“Right now, the world needs to be fed. Countries, including Islamic countries, of which many are import-reliant, need more in their food stockpile to make sure they are sustainable. Time and speed are of the essence here and the main issue now is food security and distribution of food globally,” said Matthew Hoffer, the company’s managing director for Europe and the Middle East.
At the onset of the pandemic, the company launched the OneAgrix Farmers' Helpline that has since added a WhatsApp group where communities help local farmers procure local produce in Africa. “They can setup and list their products for free. If they need time adapting to tech, there is the WhatsApp group. We do not earn revenues from this group, but we certainly earn goodwill and warmth from farmers and their communities – the most valuable currency,” Hoffer said.
Food security considers two key aspects: food supply and the supply chain, and food authenticity and traceability. “COVID-19 has exposed how over-reliant the world is on only one, two or three suppliers and how broken the entire food supply chain is,” Hoffer said. To add to the burden, travel restrictions imposed globally have made it cumbersome and inconvenient for procurement and sourcing to be done in the traditional face-to-face nature of the agrifood business.
OneAgrix believes traceability is key to strengthening these challenges. “It opens up access to new markets for suppliers, and buyers would be able to diversify their purchases from different countries, digitally,” noted Hoffer.
The B2B digital platform has in-built traceability that enables buyers to provide the end-consumer with information about the origin of the product they are buying. This includes halal certification.
The company has a diversified mix of suppliers, including farmers, SMEs, FMCG giants such as Nestle, Dubai/Saudi Arabia’s's Switzgroup (that supplies to Emirates Airlines), and Cape Karoo (the largest halal ostrich meat supplier in Africa). It is also currently finalizing deals to onboard thousands of additional suppliers through farming associations and government entities.
OneAgrix’s features include:
- Geospatial mapping allows buyers to search for suppliers in their region. Shorter distances mean lower logistical cost, which is important as it reduces the time to meet stockpile quota.
- Sourcing reliable freight forwarders is the biggest pain point in cross-border trade, said OneAgrix. “With our strategic partnership with one of the largest container providers in the world, OneAgrix gives our clients access to more than 500,000 ocean freight quotes and the latest international shipping rates from any carrier in a very short time,” said Hoffer, without naming the company as the deal cannot as yet be publicly announced.
- Small suppliers can consolidate a larger quantity of products. “The amount of friction in global supply chains has underscored how important smallholder farmers are in feeding their communities and the world. What we often find is that commercial farmers and large manufacturers also procure their agricultural and food ingredients from this network of smallholder farmers,” said Hoffer.
- Partnership with one of the largest smallholder farmers association in Africa. OneAgrix is working on a pilot project with them together with several retailers and NGOs.
“It is digital transformation, not COVID-19, which is the biggest problem facing food supply chains,” said Hoffer.
“Our goal is to eliminate the exploitative middlemen/intermediary and only include those middlemen who act as a bridge in navigating cultural nuances and language barriers in global trade, whilst having the best interest at heart for their farming and SME communities.”
(Reporting by Heba Hashem; Editing by Emmy Abdul Alim email@example.com)
*Correction: OneAgrix's strategic partnership with a logistics company is not with Freightos. That line is replaced with a quote from Hoffer explaining a new partnership that is yet to be announced.
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