Not much can shock me these days. But a statement made by Strella Biotechnology CEO and co-founder Katherine Sizov during her “3 Vs Business Innovation Awards” presentation at the Council of Supply Chain Management Professionals’ Edge Conference gave me pause. “Fun fact: An apple in a grocery store can be over a year old before it gets to you,” she told the audience. “And right now, it’s a bit of a guessing game as to which apple can last a year and which apple can’t.”
Did you know that 40% of food is wasted before it can be consumed? According to Sizov, there are two reasons for the high volume of food spoilage: a lack of actionable/quantifiable data in the supply chain and the fact that the data we do have within the supply chain is extremely siloed.
To tackle these challenges, Strella developed a game-changing technology. “We created shelf-life prediction models that allow us to [parlay] that [predictive] information into better decisions within the chain itself,” Sizov explained. Specifically, the company developed a sensor technology that measures the gases that fruits and vegetables give off as they ripen. Strella then feeds the sensor data into its model to predict the shelf life of specific pallets or even warehouses full of fruit.
That shelf-life prediction data on those pallets and warehouses is used to optimize inventory through maturity-based inventory management. For example, if you have one pallet with apples that have five weeks of shelf life left and another with apples with 10 weeks of shelf life remaining, the technology prioritizes the pallet with the shorter life span.
The results have been promising. As of early October, the company had monitored 2 billion apples and prevented more than 20 million pounds of apples and pears from spoiling. To give you a sense of scope, Strella currently works with 60 to 70% of the apple and pear market, so it’s monitoring a lot of produce.
But what about the retailers, you might ask? In order to follow the apple farther down the supply chain to the retail level, Strella created an AQM (automated quality management) platform to manage apple quality at all stages of the journey. As for why this is important, Sizov explained, “The retailer is basically receiving a black box of a perishable product at the end of this giant game of hot potato, and they are suffering as a result of it.”
Strella’s AQM platform supports its retailer customers in a couple of ways: In the first step, the company works with the supplier to ensure it is sending the right pallet of produce to the retailer. Strella also enters shelf-life data along with the retailer’s own specs (like color, size, and grade) into a customized dashboard so retailers can factor product maturity into their decision-making. If it takes 10 days for Walmart to move produce through its supply chain and onto store shelves, the platform will ensure that a pallet with at least 10 days of shelf life gets shipped out from the supplier.
The second step entails prioritizing produce by shelf life within the distribution center (DC) itself. When pallets of apples arrive in the DC, Strella sensors can accurately measure shelf life and modify the expiration dates on pallet IDs in the warehouse management software so the pallets with the most mature fruit ship out of the facility first. This has reduced store-level shrink by 51% on average and improved the quality of apples on store shelves. In fact, one of Strella’s biggest customers is Target, so the next time you buy an apple at Target, I hope you find it’s fresh and delicious.
After hearing Sizov’s presentation, I was not surprised to learn that Strella had taken home the ESG (environmental, social, and governance) award at the first annual 3 Vs Business Innovations Awards competition, which was held during the Edge conference. As a consumer and a fruit and vegetable lover, I appreciate all innovators who work tirelessly to improve our food supply chain.
