AI

Solving the shared challenges of agrifood with digitalisation and AI

Karsten Smet 
CEO at ACI Group

KEYWORDS

AI

Digitalisation

Supply chain

Metabolic

Joint

Immunity

Abstract

The agrifood sector faces challenges like regulatory constraints, environmental pressures, and resource scarcity. These issues complicate product development and strain profit margins. However, opportunities exist through supply chain optimization. ACI Group CEO Karsten Smet discusses how digital transformation and AI can enhance flexibility, real-time insights, and end-to-end visibility, helping companies adapt swiftly to disruptions like water scarcity and regulatory changes. Technologies like IoT and blockchain improve traceability and product safety, essential for maintaining quality in complex supply networks, while ACI’s Supply Chain Manager (SCM) platform enables clients to navigate challenges with predictive insights and automation. The piece aims to demonstrate that digital tools are critical for businesses to remain competitive and resilient in the evolving market landscape.

Given the agrifood sector is one we literally cannot survive without, it is vital that we ensure it operates at maximum efficiency. That means finding solutions to the many problems it faces, including challenges around developing innovation within strict regulations, environmental pressures, evolving consumer preferences, and resource depletion.


The many complex industries that support global agriculture, such as pesticide and fertiliser production, are also facing similar issues. Combined, these challenges mean that bringing new products to market has become a lengthier and more complex process, adding strain to profit margins. Yet, amid these challenges lie opportunities, particularly in the form of supply chain efficiencies. Streamlining the supply chain can optimise workflows, reduce costs, and open new doors for growth and profitability.


At ACI Group, we have spent over three decades connecting global suppliers and manufacturers. This experience has given us a unique perspective on how supply chain optimisation can offer a competitive advantage. We believe that the future lies in digital transformation, where businesses leverage AI technology to overcome the challenges posed by an ever-evolving marketplace – and thrive.

Water Scarcity and Environmental Risks

One of the most pressing challenges for the industry is the management of environmental risks, particularly concerning water. Water is a critical resource for both food production and agrochemicals, yet its availability and quality are increasingly under threat. Global water scarcity, driven by climate change, population growth, and industrial pollution, jeopardises the ability of companies to maintain consistent production levels.


Agriculture can also contribute to water pollution, as agrochemical runoff can contaminate local waterways, harming aquatic life and communities.


Given water’s importance in all areas of life, disruptions in its supply can have severe financial and operational consequences. Although companies can mitigate some risks through environmental, social, and governance (ESG) policies, external factors - such as climate change - are beyond their control. In many regions, water scarcity has become an unavoidable reality. In such cases, having the agility to pivot and adjust supply chain strategies becomes critical.


In response to environmental issues such as this, regulations are evolving rapidly, requiring companies to flex in order to maintain operational stability. The EU’s Green Deal, for instance, has introduced sustainability measures such as the Farm to Fork Strategy, a far-reaching plan to reduce the environmental impact of food production. This will impact the production and use of pesticides and fertilisers. Such changes demand adaptability across the entire supply chain. A lack of adaptability leads to disruptions, and disruptions - whether caused by regulatory shifts, geopolitical tensions, or environmental challenges - can significantly impact businesses.

Building Flexibility Through Digital Supply Chains

Addressing these challenges requires a digital revolution in supply chain management. While a digitalised supply chain cannot prevent environmental crises like droughts, it can help companies respond to them more efficiently. Digital supply chains offer increased flexibility, allowing businesses to adapt quickly to external shocks with minimal operational disruption.


One of the key benefits of digital supply chains is improved inventory management. Traditional inventory systems rely on historical data, making them slow to react to sudden changes in demand or supply disruptions. In contrast, digital supply chains use real-time data to offer dynamic insights into inventory levels, supply availability, and demand trends.


The COVID-19 pandemic showcased the importance of this flexibility, as pharmaceutical companies had to rapidly increase the production and distribution of vaccines, while agrochemical firms had to respond to shifts in the global food supply. Companies with digital supply chains were better equipped to navigate these challenges and avoid the pitfalls of overstocking or shortages.


This flexibility extends beyond inventory management to procurement, logistics, and distribution. Digital supply chains allow businesses to source materials from multiple suppliers, optimise transportation routes, and ensure timely deliveries, even in the face of unexpected disruptions.


End-to-End Visibility for Enhanced Resilience

A successful digital supply chain hinges on end-to-end visibility. This means having the ability to monitor every stage of the supply chain, from raw material sourcing to product delivery. End-to-end visibility allows businesses to proactively identify potential issues and take corrective action before they lead to significant disruptions.


This transparency is especially crucial in the agrochemical industry, where quality control is paramount. For companies involved in this industry, maintaining the integrity of temperature-sensitive products throughout the supply chain is vital for ensuring their effectiveness. Even minor deviations in storage conditions can render products ineffective or unsafe. Similarly, agrochemical companies face risks from counterfeit products that can compromise both consumer safety and business reputations.


Digital supply chains enable real-time tracking of products using technologies such as IoT sensors embedded in packaging and warehouse systems. This ensures that quality standards are met at every step of the supply chain, offering the oversight needed for managing complex, global supply networks.

AI and Automation in Supply Chains

AI is revolutionising supply chains by providing powerful tools for data analysis and automation. AI can analyse vast amounts of information quickly and provide insights that would otherwise take humans days or even weeks to compile.


AI is particularly valuable for demand forecasting. By analysing historical data, weather patterns, and geopolitical developments, it can predict future demand trends. This allows businesses to optimise their production schedules, minimise excess inventory, and ensure they are prepared to meet consumer needs without delays.


Beyond forecasting, AI enhances automation throughout the supply chain. In warehouses, AI-powered robots can sort, pick, and pack products with greater accuracy and speed than human workers, reducing errors and increasing operational efficiency.


At ACI Group, we’ve embraced AI’s transformative potential through our Supply Chain Manager (SCM) platform. SCM offers real-time insights into order statuses, supplier availability, environmental conditions, and market fluctuations. This empowers our clients to make informed decisions that improve operational efficiency and reduce risk.

Supply Chain Security and Blockchain Technology

In addition to AI, blockchain technology is becoming a vital tool for supply chain security. The blockchain’s decentralised, tamper-resistant qualities ensure that every transaction is transparent and verifiable. This is particularly important when dealing with food-safe chemicals, where product authenticity is critical for regulatory compliance and consumer safety.


The blockchain creates an unalterable record of each product’s journey through the supply chain. This level of transparency helps combat counterfeit products, which pose significant risks to both health and business reputations.


The security of the blockchain also provides an additional layer of protection against cyberattacks, ensuring that sensitive information and transactions remain secure.

Pragmatic tech transfer

The precision fermentation ecosystem is fueled by university spin-outs and knowledge intensive start-ups. Hence, a well-oiled tech transfer system is pivotal. If universities claim ownership of IPR or equity in a way that reduces the attractiveness of a company for investors later, the spin-out likely won’t survive.

The same goes for IPR rights in R&D collaborations. It is essential for universities to have flexible, transparent IPR policies that balance protecting their interests with providing attractive conditions for industry partners.

Incubation

In a good business ecosystem for precision fermentation companies, there should be access to dedicated incubators. These can relate to shared facilities, universities, research institutes, or large companies, or they can be part of co-working spaces that offer some kind of industry specific support. Food & Bio Cluster Denmark runs three incubators in Denmark, there are science parks and incubators connected to most university campuses, and there are many office communities with incubation services – some specifically with biotech focus.

When working with biotech, the needed labs and facilities are costly so incubator and accelerator programs can make a major difference. The BioInnovation Institute (BII), a private non-profit incubator in Copenhagen, is a stellar example of how to help early-stage startups. BII has different programs that support spin-out companies and prepare them for raising capital.

Denmark has a large and diverse ecosystem (6) to provide early-stage companies investment and support, but growth incubators for the later stage development are still lacking.

Public funding

Early-stage startups face significant challenges in securing private investment. Developing precision fermentation processes is high-risk and requires patient investors. Public funding can help bridging the gap and providing the necessary resources to advance promising technologies to a stage where they become attractive to private investors.

The Danish InnoFounder programme is a 12-month full-time programme for entrepreneurs with a higher education. The idea is to give financial support to work full-time in their startup to bring the company from the early stages to a stage where the company becomes financially sustainable - either through sales or by raising additional public or private investment.

There are also multiple other public soft funding options – some through university accelerators, others with national funding and again others with EU regional funds. Under the Business Lighthouse for Biosolutions, there is project funding available for technological development of processes as well as scale-up vouchers to co-finance the use of shared facilities to try and alleviate some of the financial burdens of accessing relevant infrastructure.

Access to capital

Access to capital is crucial for startups due to the substantial financial demands for scaling up a biosolutions process. The presence of stakeholders in the ecosystem that can help companies find the right investor match is a game changer. In Denmark, we have some great accelerator programs that can provide pre-seed and seed funding for interesting startups, like the BII and Rockstart. The Danish Export and Investment Fund (EIFO) co-invests to help alleviate the investment scarcity.

That is a good beginning, but we need to drum up much more investor interest for the biosolutions field and attract foreign VC money to the Danish biosolutions scene – not least through targeted matchmaking. Food & Bio Cluster Denmark has made it a strategic priority to coach startups in their efforts to raise capital and has gathered a network of more than 350 investors from five continents active with agrifood and biosolutions who are screened and presented for relevant investment cases.

Conclusion

In this new industrial field of biosolutions, the importance of a well-functioning ecosystem where all these dots are connected cannot be overstated. Building up good precision fermentation ecosystems that supports commercialization of research and entrepreneurship is key to quicker access to the multitude of new, sustainable products and sustained economic growth.