Australia’s cost-of-living crisis is already a major concern for many, and isn’t expected to get better any time soon. Food prices across the country have jumped over the past year, alongside inflation, with recent ABS data showing a 9 per cent increase in the price of food and non-alcoholic beverages since September 2021. In fact, the National Food Supply Chain Alliance states that prices are expected to rise another 8 per cent by the end of 2023. The alliance, which is made up of 165,000 b
0 businesses across the grocery supply chain, is calling for a ‘national food security plan’ to minimise future price increases due to further disruption. But some businesses are offering an alternative to the traditional supplier-to-distributor-to-grocer supply chain, instead bringing the farm indoors, in-store and, in some cases, in-home. The fresh(est) food people Supermarket giant Woolworths launched a partnership with agriculture tech firm Invertigro earlier this year, and now sports three stores in which ‘Urban Gardens’ are stocked by Invertigro’s Rosebery inner-city farm in Sydney, located just two kilometres from the stores. The tech can currently grow around 200 different types of produce, though Woolworths is using it primarily for herbs. Invertigro has spent the past several years building out its indoor farming technology solution and aims to provide the tools for more supermarkets in Australia and abroad to create hyper-local supply chains for fresh produce. “It means better results for the retailer’s ESG commitments, and the customer is getting a better product because it’s herbicide and pesticide free, and it’s fresh,” Invertigro co-founder and co-CEO Paul Millett told Inside Retail. “This approach is more accepted in Europe, Scandinavia and the Gulf; in Australia it is still quite early. But after seeing shortages on shelves, and the lettuce wars earlier this year, it’s been a pretty perfect storm for people to sit up and think about what is needed for [food supply] going forward.” Invertigro sells two industrial-grade products, the InvertiCube, which functions as a dense grow-bed for its farm operations, and the InvertiWall, which grows a smaller amount of produce but serves better as an in-store display to help customers understand the concept. With modern supply chains so decentralised, customers aren’t necessarily used to seeing their potential food growing right in front of them. The InvertiWall doubles as both a showcase of what herbs are available fresh, and an educational tool to help customers understand the potential of a local supply chain. Grow home Some Australians want to take the term hyper-local to its extreme, and grow farm-quality produce within their own homes. This can be challenging in today’s modern, high-density living environments, but thanks to advances in LED technology, it’s now possible to mimic solar output in a small, concentrated area. This is the technology that underpins Sydney-based start-up Urban Plant Growers, which sells a number of consumer products built to help Australians grow herbs, lettuce, or microgreens at home. The business, which was born in 2018, has grown to the point that it has expanded into New Zealand and the UK and sells its products in local retailers such as Flower Power, David Jones and Eden Gardens, as well as on its own DTC website. “Everyone wants to greenify their urban environment, but there’s a large technology gap there when it comes to things like grow lights and hydroponics,” Urban Plant Growers co-founder Peter Cole told Inside Retail. “We’re trying to develop the next generation of products to improve food security and food and water consumption, reduce carbon food miles, and really help people focus on the sustainability side of things.” The business recently completed a $1 million equity funding round off the back of 500 investors, through Equitise, and now plans on taking its offer to the next level to feed the growing hunger for grow-from-home solutions. Looking forward, Cole says the push into smaller living conditions is likely to increase, with Earth’s population expected to hit 10 billion people by 2050. To feed these people, humans will have to produce around 60 per cent more food than in 2010, the World Resources Institute estimates, highlighting the need for new and more agile and efficient food systems. “Earlier this year, a head of lettuce was $10 [at the supermarkets]. Food is not secure right now, and the amount of carbon miles on that food is really eye opening,” Cole said. “What happens when the supply chain fails again? When there are extreme weather events, floods and droughts wiping out crops and gardens on a seasonal basis – we need a more controlled environment. “When you think about it, farming has traditionally been done on a 2D plane with a huge amount of space needed, then we have these vertical cities that need a lot of food. There are an insane number of advantages to bringing vertical farming into cities.” So, what’s next? Supermarkets have already started changing their business to cope with the unpredictability of supply chains; for example, in 2020, Woolworths upgraded its Townsville DC to hold a number of ‘emergency supplies’, such as tinned vegetables, toilet paper and baby formula. When floods hit the surrounding areas, the DC was able to keep local supermarkets supplied despite the fact the ‘regular’ supply chain was impacted. It isn’t out of the question, then, to see some radical changes to the way supermarkets are supplied in the coming years – especially as we continue to see weather events interrupt regular farming seasons and supply routes. In Millett’s vision of the supply chain of the future, each community would have its own micro-food grid, from which local supermarkets would be stocked . FMCG manufacturers could grow the ingredients necessary for their products in-house, rather than outsource them to another part of the country. Only manufactured and preserved food would need to be transported over distance. Whether that will be the case is still to be determined, but it’s clear Australia’s food supply chains could undergo some major changes in the coming years.