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CocoPallet co-founder and chief technology officer Michiel Vos with some coconut husk, and one of the pallets his company makes from it. Photo credit: CocoPallet

3 Singapore Food Bowl startups strengthening the supply chain after Covid-19

October 5, 2020

AFN readers got the chance last week to hear from three startups tackling the problem of food waste who are participating in Singapore Food Bowl – the food security and sustainability program run by impact fund and accelerator GROW, and backed by AgFunder, Enterprise Singapore, and Dole Packaged Foods.

[Disclosure: AgFunder is the parent company of both GROW and AFN.]

The waste reduction theme continues this week as we move on to meet three more startups from Singapore Food Bowl. This time, AFN is zeroing in on supply chain technologies that align with the Food Bowl objective of helping Singapore meet its ‘30 by 30‘ nutrition sourcing goal by building “a more resilient, sustainable, and decentralized agrifood ecosystem.”

Of the three, CocoPallet and Fortuna Cools are also addressing the issue of waste in the agrifood value chain, repurposing byproducts of coconut farming to create sustainable supply chain solutions.

The third, DiMuto, is using a combination of blockchain and computer vision technologies to bring greater efficiency, traceability, and accountability to the fruit and vegetable supply chain, with reduced loss and waste among the benefits it hopes to impart.

The Covid-19 pandemic severely shook-up the global supply chain. Lockdowns and movement restrictions meant that, in many parts of the world, workers couldn’t get to farms or factories to harvest and process food. Likewise, internal and cross-border trade slowed considerably, leading to food shortages and panic buying in some places.

On the other hand, the suspected zoonotic origin of the coronavirus has led to increased concerns about the safety of animal-derived products in the food chain, as well as the cleanliness of processing facilities and packaging.

As a result, the agrifood supply chain — and the technologies and business models which support it — are under ever greater scrutiny from consumers and other stakeholders. It’s an area ripe for innovation – not just to ensure safety and traceability of our food, but also to increase efficiency, streamline costs, and reduce food loss and waste.

Speaking to AFN today are:

    • Kiel Flores, general manager, Asia Pacific, at CocoPallet – a Dutch-Filipino startup manufacturing sustainable and cost-competitive shipping pallets from coconut farming byproducts
    • Tamara Mekler, co-founder and chief operating officer, at Fortuna Cools – a US-Filipino startup producing a cheaper, biodegradable alternative to iceboxes used in cold chain logistics, also upcycling byproducts of coconut farming
    • Lee Hui Min, chief marketing officer, at DiMuto – a Singaporean startup using blockchain tech to digitize food products at all stages of the supply chain, achieving end-to-end visibility for suppliers and customers.

AFN: What problem is your company trying to solve, and how does your technology offer a solution?

Kiel Flores (KF): Deforestation, farmer poverty, and CO2 reduction. Asia exports around 1.7 billion one-way transport pallets each year which is equivalent to 170 million trees being cut down in our forests to produce these single-use items. Also, 73 billion coconuts are harvested in Asia each year where the husks, the fibrous exterior, are dumped and burned in the farmlands causing massive air pollution.

We’ve developed CocoPallet — our sustainable, affordable, and fully bio-based transport pallet solution — which is manufactured only from 100% coconut husk. We buy this agricultural waste directly from farmers, which creates more jobs and generates additional income for the farmers. At end-of-life, our pallet solution can be ground down into a valuable soil improver, so CocoPallets are 100% circular, farmer-to-farmer.

Tamara Mekler (TM): Cold storage is essential for fresh food to reach consumers but today’s insulated packaging isn’t up to the task. Disposable plastic foam dominates the market even though it’s a big expense for suppliers and a big annoyance for consumers. Fortuna’s Coconut Cooler [made from coconut fiber insulation] is an affordable, durable, and sustainable solution to keep food fresh and oceans healthy.

Lee Hui Min (HL): Currently, global agrifood trade is conducted with disconnected visibility of physical goods and documentation throughout the supply chain. This creates mistrust, inefficiencies, and challenges when conducting trade, resulting in problems like 1.6 billion tons of global food waste annually on a global scale, as well as a 5% to 10% loss on every trade for companies.

DiMuto digitalizes every single product and carton to provide end-to-end supply chain visibility to all relevant partners in each trade. We then leverage the traceability achieved to provide a full suite of trade solutions including trade financing, insurance, marketing, and market access to help companies trade better.

By simplifying all aspects of agrifood trade, our one-stop-shop trade solution creates a foundation of data and visibility for a seamless exchange between goods and cash.

AFN: What gives your company its competitive edge and differentiates it from others trying to solve the same problem?

TM: Fortuna is known for its coconut fiber insulation derived from agricultural waste. This breakthrough material requires no compromises: it’s affordable, durable, and biodegradable. What’s more, it represents additional income for coconut farmers and avoids CO2 emissions from waste that would otherwise be burned.

KF: Timber is sourced mostly from developed countries such as Canada, New Zealand, and in Eastern Europe, and is shipped to Asia to make single-use export pallets. That itself could create a supply shortage in cases where natural disasters can strike, limiting operational movements — as we’ve seen with the Covid-19 situation — and it could lead to massive competition on pallet availability by the end-users. Also, as manufacturing continues to increase annually in Asia, timber is already scarce, getting very expensive and even more unsustainable in the long term.

There’s an increasing demand from customers [for vendors] to become more sustainable in their operations, and we see great opportunities to maximize the value of coconut waste streams as an abundant source of raw materials. We make sustainability affordable.

HL: DiMuto’s differentiating factor is our ability to digitalize physical agrifood products upstream [in the supply chain] to provide visibility of the quality of every carton of food product, beyond just [that provided by] trade documents. Coupled with our ability to leverage the visibility data for trade financing, insurance, marketing, and market access, we’re fundamentally transforming the way agrifood trade is done to solve the challenges of the agrifood industry in a holistic manner.

AFN: What is the biggest challenge you’ve faced as a company, and how did you overcome it (or how are you planning to)?

HL: Our trade solution is actually something that is sorely needed within the industry so that’s why, within a year, we are already in eight countries and have tagged and tracked millions of items of produce. The key barrier is how can we make more industry players aware of our solution as we gain momentum. That is why we work closely with government agencies and trade associations [and are working to] form a strong partner ecosystem.

KF: The development of our production process might not be rocket science and [our] technology developed by Wageningen University is available for public use. But getting the technical parameters right to produce a pallet is very intensive. Far more difficult is the development of our proprietary mold; the design is crucial to produce a strong pallet with a minimum of husk and energy. We are well underway but it’s still a risk. We are collaborating with the best R&D and technical partners in Europe [and they and our investors] have been integral to this stage of our development.

TM: The biggest challenge has been the travel and supply disruptions due to Covid-19. Shipments were delayed, orders were interrupted, and trips were canceled. However, thanks to the hard work and support of our partners, we’ve been able to make progress locally and open new markets internationally. It demonstrates that the relationships we’ve built over the years, from manufacturers to customers to farmers, is the biggest asset of Fortuna.

AFN: How does your business model and mission align with Singapore’s ‘30 by 30’ food resilience initiative?

KF: Singapore imports close to 90% of its food supply from other countries and our solution is very complementary to the global supply chain. Our goal is to enable companies to have an alternative pallet solution that [is] ISPM 15 compliant, which means products on pallets can be easily imported without worrying about contamination and additional labor to offload products manually out of the container. Companies can maximize the potential of its local workers in other areas rather than looking at them as only manual laborers.

TM: Better packaging means less food waste in supply chains and more cost-effective food production. If we can reduce physical and economic food loss by 10%, that’s 10% less food that Singapore has to produce to meet its 30 by 30 goal.

HL: Even after reaching its ’30 by 30′ goal, Singapore will still be largely reliant on imported food sources. Thus, it is important to look at how can we conduct cross-border agrifood trade better in Singapore. By providing product and carton-level visibility of food products, we can help make food imports more efficient.

For instance, the recent case of food recall of US peaches by [the Singapore Food Agency] due to salmonella concerns caused confusion amongst consumers, due to an inability to accurately identify the particular batch of affected peaches based on existing [price look-up code] labels. Consumers were not able to identify which loose-packed peaches were affected, and may have avoided peaches altogether or thrown out perfectly good fruit. DiMuto traceability labels could have helped identify and isolate the affected peaches more efficiently to prevent any unnecessary food waste.

If you’re an accredited investor who wants to join AgFunder in building a more sustainable food future, find out more about investing in the GROW Impact Fund here.

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