Woolworths To Aid Fruit And Vegetables Supply Chain Revolution

Supermarket player Woolworths Group Limited (ASX:WOW) is all set to support the supply chain revolution of fruits and vegetables.

The company’s former chairman Mr John Dahlsen provided solid support to “Project Refresh”, which has proved to be the utmost fruitful value creation strategy which was applied in the local supermarket segment. Two decades since then, he is again trying towards bringing a change in the supply chain section for fresh fruits and vegetables, by utilizing GPS and data analytics. Though, now he is working with Escavox, which is a start-up and is independent of WOW. He has become a part of this start-up to aid in cutting down, a billion dollars of money which gets wasted every year, in fruits and vegetables supply chain area.

Mr Dahlsen stated that the supply chain department of fruits and vegetables, which is a daily necessity of everybody’s life form the complex part of the retail section. There are challenges while dealing with fruit and vegetables, since they have a limited life span. Also, some of them are available only in a certain season; therefore, their demand and supply fluctuate as well. Besides, distributing fruits and vegetables, most of the time needs control in temperature and special packing.

The core value behind the plan is to provide an extension of the shelf life of fruits, and vegetables in every retail channel. It would be done by keeping a track and by monitoring the produced fruits and vegetables arriving from the farm gate to the supermarket outlet. Every individual box of fruit and vegetables would be comprising of blue-hued plastic equipment with an ability to track. The equipment would also measure temperature, time and location of the package.

The business strategy of Escavox has assumed the utilization of 1,864 equipment in its maiden year. Later, it is expected to grow to 95,382 in number in the next year. By the third year in the row, it is anticipated to reach 997,668 equipment.

Escavox had achieved early success when the government provided $1 million fund to the company. It would obtain $670,000 prior to 30 June 2019. The other portion of the total amount of $170,000 would be paid in September 2019 and $120,000 during the December 2019 period.

If the above-mentioned plan becomes successful, Escavox would be able to come to aid in decreasing the yearly food wastage bill, in the Australian region, which is to the tune of AUD20 billion. Â It would help eliminate, the extra gross margins which are imposed to cover this pointless wastage, from the supply chain section of fruit and vegetable.

The accountability for supply chain wastage has been directed towards suppliers by the supermarket giants WOW and Coles. This disagreement between suppliers and the supermarket giants has been going on from quite some time now, due to the absence of dependable data, it has been near to impossible to sheet home the blame for wastage.

Escavox, founding Chief Executive Officer, Mr Luke Wood, realised that the only solution to resolve the complex issues in the supply chain section was to receive solutions by an autonomous party.

In May 2018, Escavox signed up with WOW and Costa Group, as its initial clients. Escavox has its hopes high for extending its coverage of the supply chain by signing the deal with Coles and other players in the market.

The stock of the company closed the trade at A$31.670 (as on 23 April 2019), up by 1.441% as compared to its previous day’s close.

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