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Market Analysis Report “Stimulating innovation in the food supply-chain through smart use of ICT: assisting SMEs participate in digital supply chains in the Single Market�

Report of WP2 V2.0 August 2012


Market Analysis Report

Table of contents Glossary……………………………………………………………………………………………………………………………………8 Executive summary ..................................................................................................................... 10 I.

Introduction .................................................................................................................. 13

II.

Methodology ................................................................................................................ 15

III.

Market presentation ..................................................................................................... 20

III.1

Fresh Fruits and Vegetables ........................................................................................ 22

III.2

Cereals ......................................................................................................................... 26

III.3

Dairy products ............................................................................................................. 29

III.4

Main stakes of the agricultural sector in Europe ........................................................ 32

IV.

Current Situation .......................................................................................................... 34

IV.1

Use of ICT solutions underpinning B2B transactions in the food supply chain .......... 34

IV.1.1

Adoption of ICT solutions: survey and interviews results ................................... 34

IV.1.2

Specific implementation of B2B transaction needs in the dairy sector .............. 44

IV.2 Existing ICT standards, specifications and B2B solutions related to food supply chains at European and international level........................................................................................ 47 IV.2.1

ICT Standards work.............................................................................................. 47

IV.2.2

Specification work and B2B solutions ................................................................. 53

V.

Analysis ......................................................................................................................... 64 V.1

Overview of expectations related to ICT: survey and interview analysis ................... 64

V.1.1

Expectations in the ICT development ................................................................. 64

V.1.2

Projects and problems encountered in relation with ICT ................................... 67

V.1.3

General opinion on ICT development promoters ............................................... 70

V.1.4

Main challenges to resolve according to the companies surveyed .................... 71

V.1.5 Challenges, drivers and potential solutions according to the workshop participants………………………………………………………………………………………………………………………72 V.2

VI.

Major challenges among the existing ICT solutions and systems ............................... 75

V.2.1

Interoperability Challenges ................................................................................. 75

V.2.2

E-invoicing ........................................................................................................... 76

V.2.3

Certification ......................................................................................................... 77

V.2.4

Environmental impact ......................................................................................... 77

V.2.5

SMEs integration ................................................................................................. 78

V.2.6

Relevant reports or studies ................................................................................. 78

Future outlook .............................................................................................................. 82

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Market Analysis Report

VI.1

Foresight business scenarios ....................................................................................... 82

VI.1.1

agriXchange ......................................................................................................... 84

VI.1.2

Consumer driven supply chain networks ............................................................ 86

VI.1.3

SmartAgriFood..................................................................................................... 87

VI.1.4

Opportunities for eBusiness and eCommerce of agro-food products ................ 88

VI.1.5

Agriculture information systems ......................................................................... 88

VI.1.6

Precision agriculture, integrated pest management .......................................... 89

VI.1.7

Transparent_Food project................................................................................... 90

VI.1.8

ENORASIS ............................................................................................................ 90

VI.1.9

Internet of Things (IoT)........................................................................................ 91

VI.2

Impact of ICTs in the structure and market dynamics of the sector ........................... 93

VI.2.1

Fluidity of the value chain ................................................................................... 93

VI.2.2

Immediate benefits ............................................................................................. 93

VI.2.3

Mid-term benefits ............................................................................................... 94

VI.2.4

Strategic benefits ................................................................................................ 94

VI.3

Perspectives from the market ..................................................................................... 94

VII.

Conclusions ................................................................................................................... 96

VIII.

References .................................................................................................................. 100

IX.

Annexes ...................................................................................................................... 103

IX.1

Characterization of the survey sample ..................................................................... 103

IX.2

More detailed data from the survey analysis ........................................................... 105

IX.3

Questionnaire ............................................................................................................ 110

IX.4

List of experts/stakeholders surveyed ...................................................................... 114

X.

De Heus Sp. z o.o. ....................................................................................................... 114

XI.

ANP (Associação Nacional dos Produtores de Pera Rocha) ....................................... 115

XII.

Associação dos Produtores de Maça de Alcobaça...................................................... 115

XII.1

Summaries of the interviews per country ................................................................. 117

XII.1.1

France ................................................................................................................ 117

XII.1.2

Germany ............................................................................................................ 117

XII.1.3

Greece ............................................................................................................... 119

XII.1.4

The Netherlands ................................................................................................ 119

XII.1.5

Poland................................................................................................................ 122

XII.1.6

Portugal ............................................................................................................. 123

XII.1.7

Spain 125

XII.2

Characterisation of the supply chains ....................................................................... 127

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XII.3

Results from the interactive exercise in the validation workshop ............................ 131

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List of figures Figure 1: Information gathering .................................................................................................. 15 Figure 2: Power repartition in the European agro food chain (Grievink, 2002) ......................... 21 Figure 3: Force map in the agro food supply chain (by sector)................................................... 21 Figure 5: Number of wholesalers and retailers in the fruits and vegetables value chain........... 25 Figure 6: SMEs in fruits and vegetables manufacturing industries ............................................. 26 Figure 7: Cereals general value chain.......................................................................................... 27 Figure 8: Presence of SMEs in the Grain Manufacturing Industry in the study countries .......... 29 Figure 9: Dairy products supply chain ......................................................................................... 30 Figure 10: Number of dairies by volume collected in the study countries ................................. 31 Figure 11: Presence of SMEs in dairy industries of the study countries ..................................... 31 Figure 12: Issues and factors with impact on the supply chains ................................................. 33 Figure 13: Adoption of ICT solutions in B2B transactions by companies surveyed in different sectors, results weighted. ................................................................................................... 35 Figure 14: Adoption of ICT in B2B transactions by companies surveyed in different countries (except Belgium and Poland, less than 10 answers) ........................................................... 36 Figure 15: Types of electronic messages and technologies used in B2B transactions ............... 38 Figure 16: Ongoing projects in fresh fruits and vegetables companies surveyed from the Netherlands ......................................................................................................................... 40 Figure 17: Types of messages electronically exchanged in the French cereals industry ............ 42 Figure 18: Adoption of ICT among the French dairy companies surveyed ................................. 43 Figure 19: Example of GS1-128 label (example from GS1 US Guideline).................................... 45 Figure 20: The UN/CEFACT eBusiness Standards Stack (VOGEL, SCHMIDT, LEMM, & OSTERLE, 2008) ................................................................................................................................... 49 Figure 21: Illustration of VANs .................................................................................................... 53 Figure 22: EDI and Web EDI exchanges ....................................................................................... 55 Figure 23: High level interview overview of the ebXML specification set functionality ............. 56 Figure 24: Market places ............................................................................................................. 57 Figure 25: AS functioning ............................................................................................................ 58 Figure 26: Technical vision of B2B communication..................................................................... 58 Figure 27: Machine communication via Weihenstephan Standards .......................................... 60 Figure 28: Potential future collaborative process (iTradeNetwork, 2012) ................................. 62 Figure 29: Interest of companies in having a stronger integration............................................. 64 Figure 30: Messages considered as the most important for the automatic exchange of data .. 65 Figure 31: Opinion on messages to be exchanged electronically depending on the use or not of ICT ........................................................................................................................................ 66 Figure 32: Identified benefits of the automatic exchange of data ............................................. 67 Figure 33: Problems encountered by companies for their projects implementation ................ 69 Figure 34: EPIPHYT functioning ................................................................................................... 81 Figure 35: Example of a technical aspect .................................................................................... 83 Figure 36: Geofertilizer use case modelled in the axTool (extracted from “The aX Tool for information exchange in the agri-food sector) ................................................................... 84 Figure 37: Generic value chain .................................................................................................... 93 Figure 38: Priorities of intervention (Fresh Fruits and Vegetables, Dairy Products, Cereals)..... 98

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Figure 39: Building blocks for the eFoodChain framework ......................................................... 99 Figure 40: Poster with the challenges prioritized ..................................................................... 131 Figure 41: Poster with the drivers prioritized ........................................................................... 132 Figure 42: Poster with the solutions classified (green - importance/impact; red – complexity of implementation) ............................................................................................................... 133 Figure 43: Priorities in the Fresh Fruits and Vegetables supply chain ...................................... 134 Figure 44: Priorities in the Dairy supply chain .......................................................................... 134 Figure 45: Priorities in the Cereals supply chain ....................................................................... 135

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List of tables Table 1: Production of fresh fruits and vegetables in the studied countries, compared to the production in Europe .......................................................................................................... 16 Table 2: Production of cereals in the studied countries, compared to the production in Europe ............................................................................................................................................. 17 Table 3: Collection of milk in the studied countries, compared to the production in Europe ... 17 Table 4: Companies invited to fill in the survey per country ...................................................... 18 Table 5: Operators, employees and turnover of the European agro food chain, 2010 .............. 20 Table 6 : Top 15 Food Retailers in Europe, 2010 ........................................................................ 20 Table 7 : Production, turnover and import-export values for the fresh fruits and vegetables sector in the studied countries ........................................................................................... 24 Table 8: Rate of organisation of Producers’ organisations, Association of Producers Organisations and Producer’s Groups................................................................................. 24 Table 9 : Production, turnover and import-export values for the cereals sector in the study countries.............................................................................................................................. 27 Table 10: Number of companies and employees in the cereal manufacturing industry............ 28 Table 11: Production, turnover and export value of the dairy industry in the study countries . 30 Table 12: Percentage of electronic messages automatically processed ..................................... 34 Table 13: Adoption of ICT in B2B transactions in the fresh fruits and vegetables sector ........... 39 Table 14: Respondents to the survey in the Dutch Fresh fruits and vegetables sector ............. 39 Table 15: Adoption of ICT in B2B transactions in the cereal sector ............................................ 40 Table 16: Respondents to the survey in the French cereal sector .............................................. 41 Table 17: Adoption of ICT in B2B transactions in the dairy sector.............................................. 43 Table 18: Respondents to the survey in the French dairy sector................................................ 43 Table 19: Important data identifier for the dairy chain .............................................................. 45 Table 20: Core issues and solutions for the dairy chain.............................................................. 45 Table 21: Interest of different sized-companies in a stronger integration ................................. 65 Table 22: Number of companies with projects depending on the sector .................................. 67 Table 23: Types of projects ......................................................................................................... 68 Table 24: Three main problems encountered with projects, for each sector ............................ 69 Table 25: Promoter to the digital supply chain growth .............................................................. 71 Table 26: Electronic exchange allows cost reduction ................................................................. 77

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Glossary B2B: Business-to-Business. A B2B transaction is the term describing any transaction made electronically between two companies by electronic message exchanges and/or web transactions. B2C: Business-to-Consumer. A B2C transaction is the term describing any transaction made electronically between a company and individuals by electronic message exchanges and/or web transactions. B2G: Business-to-Government. A B2G transaction is the term describing any transaction made electronically between a company and the government or the public administration by electronic message exchanges and/or web transactions. ebXML: Electronic Business using eXtensible Markup Language, modular suite of specifications enabling enterprises of any size and in any geographical location to conduct business over the Internet. EDI: Electronic Data Interchange, general term for any electronic exchange of structured data that can be processed automatically by a computer, i.e. enables machine to machine communication. EDIFACT: Electronic Data Interchange For Administration Commerce and Transport, specified by the United Nations, is one of the most commonly used formats for EDI messages. Electronic Business: Application of information and communication technologies (ICT) to transform business processes, improve productivity and increase efficiencies. It enables an organisation to easily communicate and transact with its business associates; automate and integrate information exchange and conduct business in a secure manner. Electronic Business Standards: Technical specifications, principles, and models accepted and developed nationally or internationally that define the parameters within which parties conduct electronic business. Electronic Commerce: Subset of electronic business dealing with conducting online commerce (i.e., buying, selling, transporting and paying). Electronic Government: Subset of electronic business that includes inherently regulatory processes (e.g., customs). ERP: Enterprise Resource Planning, integrated software solution that is used for managing the business information in a company. It usually includes several functional modules such as accounting, materials and production planning, inventory management, order processing, etc. G2G: Government-to-Government. A G2G transaction is the term describing any transaction made electronically between two governments or governmental agencies by electronic message exchanges and/or web transactions. ICT: Information and Communication Technology, term referring to the information technology (IT) and communication technology (CT) and the merger between computer networks and telephone networks. Interoperability: The ability of two or more systems or components to exchange information and to use the information that has been exchanged (IEEE – Institute of Electrical and Electronics Engineers). Memorandum of Understanding on Electronic Business: Full benefits for consumers, industry and government demand a coherent set of Information and Communication Technology standards which are open, interoperable and internationally accepted. To this aim, a

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Memorandum of Understanding (MoU) on electronic business in support of e-commerce has been signed by the four main organisations which develop international standards in this area: ISO, IEC, ITU, UN/ECE, with full participation from international user groups. More information may be obtained from the MoU site at: http://www.itu.int/itu-t/e-business/mou MRP: Material Requirements Planning, software-based system to manage material requirements for production processes. Trade Facilitation: systematic rationalization of formalities, processes, procedures and documentation for the international trade. UN/CEFACT (United Nations Centre for Trade Facilitation and Electronic Business): subsidiary intergovernmental body in the United Nations, mandated to develop a program of work of global relevance to achieve improved worldwide coordination and cooperation in the areas of trade facilitation recommendations and electronic business standards. WebEDI: system whereby an established EDI format is converted into a format that can be viewed and understood by a human via a web page. Web service: software system designed to support interoperable machine-to-machine interaction over a network (World Wide Web Consortium – W3C definition). XML: eXtensible Mark-Up Language, syntax for describing structured data vocabularies and basis for contemporary EDI implementation. Abbreviations CEN: European Committee for Standardization ebXML: Electronic business XML EPC: Electronic Product Code GLN: Global Location Number GTIN: Global Trade Identification Number ISO: International Organisation for Standardization SSCC: Serial Shipping Container Code XML: Extensible Markup Language

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Executive summary The European agro-food industry is a major player in the European economy, being essential for economic, social and environmental welfare as well as for the health of European citizens. An optimised food supply chain is crucial for consumers and for ensuring a sustainable and equal distribution of value added along the chain, thus contributing towards raising its overall competitiveness. The overall aim of the eFoodChain project is to improve the competitiveness and efficiency of the agro food industry in Europe by stimulating an innovative and seamless use of ICT along its value chain. SMEs, that represent more than 99% of companies and generate approximately half of the industry turnover, are the focus of this action as the objective is to facilitate their participation in the global digital food value network and enable them to become international business partners. This document is the first release of the Work package (WP) 2 (Market analysis) report of the eFoodChain project. The goal of WP2 is to conduct an in-depth market analysis in terms of the current use of ICT (Information and Communication Technologies) and eBusiness solutions currently used in agro-food supply chain management. This analysis is focused on the current situation regarding the adoption of e-Business solutions in European SMEs (Small and Medium Enterprises) of three agro food sectors: fresh fruit and vegetables, dairy products and cereals. A preliminary release of this report was presented and discussed in an expert and stakeholders workshop that took take place in Brussels on the 9th of July 2012. The findings and conclusions from that workshop are reflected in this release of the report and were used to validate the main results from WP2 that will now be used as input for the other WPs of the project, and particularly to WP3 (Framework development). In order to present an in-depth perspective of the adoption of eBusiness solutions by SMEs in the agro food sector, several analyses have been conducted:  Particularity of each supply-chain, globally and at national level through literature review and individual interviews with relevant stakeholders.  Relevant projects and initiatives at European and National level, through literature review, web search and knowledge of the partners.  Adoption and use of eBusiness solutions by SMEs along the whole supply-chain through an online survey and interviews.  Promoters and obstacles to the development of eBusiness solutions in the agro food sector through individual interviews. The analysis conducted covers different stakeholders in each of the supply chains, from producer to retailer, in 10 European countries: Belgium, France, Germany, Greece, Italy, the Netherlands, Poland, Portugal, Spain and the United Kingdom. This analysis is based upon different types of sources:  Market characterisation through analysis of statistical data for the three sectors, at national and European level.

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   

Literature review and desk research on projects and initiatives, and other existing documentation. One online survey (translated into nine languages). A series of interviews carried out with agro food companies and ICT solutions providers. Collected information was complemented with the expertise of the partners of the eFoodChain consortium.

The analysis involved the dissemination of the project and contacts with more than 4000 organisations, more than 350 responses to the on-line survey, individual interviews with 44 agro-food organisations and 26 ICT solution providers. The organisations involved varied in size, core business structure and needs for ICT and B2B transactions. The analysis of all collected information and reaching of major conclusions was difficult due to a low response rate and to a wide range of organisations involved in the survey. Given the difficulties to get equal results from each sector in every country involved in the study, the analysis was in a second stage focused on specific cases that were selected due to their representativeness: fresh fruits and vegetables in the Netherlands, cereals and dairy products in France. The first finding from the study was related to the characteristics of the three sectors targeted by the project. It is clear that part of the agro-food industry in these three sectors – Fresh Fruits and Vegetables, Dairy products and Cereals – is very heterogeneous concerning their supply chains, companies and business practices, and forces along the supply chain. This heterogeneity, although enriching the potential impact of the eFoodChain project, creates additional challenges concerning the development a unique framework for the three sectors. The results highlight a real heterogeneity of the ICT adoption and use amongst sectors and along the supply chain, with significant differences between upstream and downstream. Also, the use and integration of B2B standards by ERP providers is limited. The Cereals and the Fresh Fruits and Vegetables industries seem to be well advanced, but the dairy industry appears less involved in the implementation of ICT solutions for B2B transactions. Moreover, a huge gap has been noted along the value chain. In general, the use of electronic data exchange is very low at the producer level (and almost inexistent in some countries such as Portugal, Spain or Greece) while there is almost a full use concerning the retail level. But even at the retail level this is mostly limited to the exchange of financial information, whilst the exchange of logistics messages is still very limited (but increasing for example in the case of dispatch advice and SSCC). Food safety and certification processes, with several standards being used demanding for different but overlapping sets of information, are mostly done manually with a few exceptions of some web platforms. Traceability in times of crisis (food safety & security) as well as the integration of “sustainability data” (use of resources) along the food chain are important drivers for further data integration.

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The main challenges and trends identified are related with further developments in EDI support for logistics, safety and certification messages and processes. Although standards and technologies for the data exchange are currently available, only few actors really use them and the issue of efficiency of ICT solutions for all actors of the value chain is crucial. Given the existence of different standards, problems related to harmonization and interoperability remain and are one of the main barriers to the integration of agro-food SMEs in the digital supply chains. Simpler and more affordable solutions are needed in order to give SMEs full access to digital supply chains. From this study it was possible to conclude that the priorities for intervention are mainly in the upstream area, although other aspects also include the wholesalers and the direct connection between producers and the market. Opportunities to improve the supply chain, through more and better integration of SMEs in digital transactions, were identified as being mostly in the areas of food safety and quality (B2B, B2C and B2G), product and production certification (B2B and B2G), exchange of laboratory tests and quality results (B2B and B2G), and sustainable production and products (B2B and B2C). There is currently a growing awareness of the benefits associated with more and better integration in the supply chain, including SMEs, and the eFoodChain project can capitalize and take advantage of this trend. The needs and requirements for the eFoodChain framework will be derived from the results of the market research presented in this report. At the same time, the interviews conducted with several stakeholders across Europe have enabled to identify possible pilots, some of them involving cross border messages exchange, that will be further explored in the coming months.

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I. Introduction The European agro-food industry plays a substantial role in the European economy. It is essential for economic, social and environmental welfare as well as for the health of European citizens. Moreover, it is a significant contributor to employment and growth. A special feature concerning this industry is the importance of SMEs, as they represent more than 99% of companies and generate almost half of the industry turnover. SMEs are really major players of the agro food industry in Europe that need to be taken into consideration. The efficient functioning of the food supply chain is particularly important amidst the current economic and financial crisis. In the longer run, a better functioning food supply chain is crucial for consumers and for ensuring a sustainable and equal distribution of value added along the chain, thus contributing towards raising its overall competitiveness. Despite significant developments and increased usage of ICT (Information and Communication Technologies), there is much inefficiency today in the value chain management (or supply chain management) of almost every sector of the economy. Many companies are using incompatible eBusiness processes, ICT systems, infrastructures and data exchange models. The validity and acceptance of data models underpinning business transactions (e-Catalogues, eOrdering, e-Invoicing, etc.) still follow national rules, making cross-border transactions difficult. Moreover, security, authenticity and integrity considerations lead to an operational risk and thus to a lack of trust. This results in a fragmented technological outlook, with a multiplicity of incompatible business standards, data models and ICT solutions and with very low interoperability levels, especially across borders. This gap is still filled in by manual, paperbased processes, especially in small providers in the supply chains, resulting in a highly inefficient, time consuming and costly business organisation. The overall aim of this project is to improve the competitiveness and efficiency of the food industry in Europe by stimulating an innovative and seamless use of ICT along its value chain. In particular, SMEs are at the centre of interest of this action, as the objective is to facilitate the participation of SMEs in global digital food value network and enable them to become international business partners. More specifically, the actions’ objective is to complete a common framework for digital value networks, i.e. framework for interoperability among different ICT solutions and systems currently in place in the food industry, building on existing ICT systems and standardization achievements and joining them in a seamless architecture at European and/or international level. Its ultimate objective is to create an innovative, seamless eBusiness environment that will stimulate and enable the uptake of ICT and eBusiness technologies, notably by SMEs, in this highly SME-intensive sector. The project’s main operational objectives are to:  provide an in-depth market analysis in terms of the current use of ICT and eBusiness solutions underpinning the agro-food supply chain management;  develop a framework for a digital food supply chain, which will set the principles and rules for interoperability among business processes and data exchange models in

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   

order to allow for seamless, paperless information and data flows underpinning B2B transactions along the food supply chain; demonstrate the feasibility and validate the framework for a digital food supply chain, through the set-up, monitoring and evaluation of sectorial and cross-border pilotprototypes; establish a governance model for the maintenance of the framework and its follow-up; propose policy recommendations for mass market adoption after the end of this action; organise a European conference to present and validate the framework for digital food supply chain and the results of the pilot-prototypes; promote awareness raising and dissemination of the framework and the results achieved.

Through this market analysis, the consortium aims to:  provide an estimation of the current situation and the trends in the adoption of ICT solutions underpinning B2B transactions in the food supply chain;  develop foresight business scenarios on how the business landscape in this sector will look like in the future and how emerging ICT technologies are going to empower business transactions;  assess the impact of ICTs in the structure and market dynamics of the sector, notably the shaping of the global food supply chains and their potential repercussions for the enterprises in the sector. The scope of the study is the whole supply chain, from producer to retailer, of three sectors: fresh fruits and vegetables, dairy products and cereals. Ten European countries are studied: Belgium, France, Germany, Greece, Italy, the Netherlands, Poland, Portugal, Spain and the United Kingdom.

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II. Methodology The analysis is based upon results gathered in three ways: • literature review and desk research on existing projects and initiatives relevant to the eFoodChain project; •

two series of interviews with specific stakeholders: o o

agro food SMEs using or not eBusiness; ICT solutions providers.

one survey which has been disseminated (Figure 1) among agro-food communities in the chosen countries, with a great focus on distribution through partners’ networks (by email and phone call follow-up phases) and through various national industry associations and targeted stakeholders with different positions in the value chains: o o o o o

producer; processor; logistics service provider; retailer; supplier of services / technology / equipment / materials.

Figure 1: Information gathering

The construction of the survey and its implementation were made according to the following workflow:

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18th of January: 1st DRAFT QUESTIONNAIRE prepared by AGRO EDI Europe and INOVA+ All partners commented and provided AREFLH / INOVA+ feedback incorporated the improvements

25th of January: validation of the questionnaire => Start PILOT IMPLEMENTATION Each partner "tested" the questionnaire and Revision and improvement of the completed it with 2 companies questionnaire / + translations by each partner

5th of March - FINAL QUESTIONNAIRE(included in annex IX.3) available online: https://www.surveymonkey.com/s/efoodchain_nl

Dutch version English version

https://www.surveymonkey.com/s/efoodchain_en

French version

https://www.surveymonkey.com/s/efoodchain_fr

German version

https://www.surveymonkey.com/s/efoodchain_it

Italian version

https://www.surveymonkey.com/s/efoodchain_de

Polish version

https://www.surveymonkey.com/s/efoodchain_pl

Portuguese version

https://www.surveymonkey.com/s/efoodchain_pt

Spanish version

https://www.surveymonkey.com/s/efoodchain_sp

Greek version

Not available online, (dissemination by email, phone calls and physical meeting)

INESC Porto incorporated the questionnaire into the online survey tool

All Partners started an intensive campaign to obtain as many responses as possible

As demonstrated above, the market analysis conducted was focused primarily on the following ten European countries: Belgium, France, Germany, Greece, Italy, The Netherlands, Poland, Portugal, Spain, and the United Kingdom. In the scope of the project it was not feasible to scrutinise in detail the situation in all Member States, neither would it be justified as the share of some of them in the European agro-food production and processing is very small. In relation to the three sectors targeted by the project- fruits & vegetables, cereals and dairy industry - the ten countries selected for the analysis represent a significant share, as it is demonstrated by the statistical data in the tables below (source: Eurostat). Table 1: Production of fresh fruits and vegetables in the studied countries, compared to the production in Europe

2010 EU-27 BE DE EL ES FR IT

Fresh fruits and vegetables (1000t) 47 203 947 1 849 3 358 9 980 3 692 13 081

2010 NL PL PT UK Other Selected countries other

Fresh fruits and vegetables (1000t) 2 936 3 946 1 925 1 457 4 032 91% 9%

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All the studied countries belong to the top 15 European fresh fruits and vegetables producers. Table 2: Production of cereals in the studied countries, compared to the production in Europe

2010

Cereals (1000t)

EU-27 BE DE EL ES FR IT

284 720 2 933 44 293 4 098 19 642 65 240 20 960

2010 NL PL PT UK Other Selected countries other

Cereals (1000t) 1 887 27 299 1 092 23 387 73 889 74% 26%

Eight out of the ten studied countries are among the top 15 European cereals producers. Table 3: Collection of milk in the studied countries, compared to the production in Europe

2010 EU-27 BE DE EL ES FR IT

Milk collection (1000t) 136 320 2 963 27 461 1 369 6 458 23 647 11 138

2010 NL PL PT UK Other Selected countries other

Milk collection (1000t) 11 656 9 142 1 901 13 237 27 348 80% 20%

Eight out of the ten studied countries belong to the top 15 European milk producers, and the studied sample includes the 6 biggest producers. Although non-exhaustive, the overall study of the 10 countries offers a representative understanding of the current situation in terms of ICT adoption in the European agro-food industry. Nevertheless, the project does not limit its analysis to this selected sample, and although focusing on these 10 Member States, it also takes into consideration data from other regions and it will conduct further exploration of the situation in additional countries, namely through stakeholder consultation and expert interviews. Such supplementary analysis might at later stages offer valuable additional input for the development of the eFoodChain framework. In order to collect responses to the survey, lots of companies have been solicited, and informed about the eFoodChain project. Depending on the countries, communication has been made using the Internet channel (information on partners’ websites and newsletters such as DPA, AGROEDI or AREFLH, newsletters of associations, project website, social media such as LindkedIn), e-mailing (and dissemination through mailing lists of sectorial representatives associations), and by more classic ways as phone calls and physical meetings (Table 4).

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Moreover, many cooperatives or producers’ organisations have filled in the survey, representing their producers’ associates or members: the results have to be weighted considering this bias, as one cooperative answered for hundreds or thousands of producers. In total, thousands of European agro-food companies have been approached and informed about the eFoodChain project and were requested to complete its Market Analysis survey. Table 4: Companies invited to fill in the survey per country

COUNTRY

France

N. of companies approached and invited to complete the survey 400

N. of respondent s to the survey 81

Germany

> 2000

12

Greece

111

31

Italy

600

51

Netherlands and Belgium Poland

500

78 and 3

70

9

Portugal

270

35

Spain

150

16

UK

300

27

Internationalwide

(no credible estimation available on the real number of organisations reached; nevertheless a potentially high number of companies was at least made aware)

Types of companies

Type of contact

SMEs, agro-food associations, producers’ organisations SMEs, associations, Producers’ organisations SMEs

E-mail, phone calls, physical meeting

SMEs, producers’ organisations, institutes SMEs, Producers‘ organisations SMEs, agro-food associations, chambers SMEs, sectorial organisations, agrofood associations, chambers and institutes SMEs, producers’ organisations, institutes SMEs All types of agrofood stakeholders with presence on LinkedIn and similar networks

E-mail, Newsletter, phone calls E-mail, phone calls E-mail, phone calls, physical meetings E-mails

E-mail, phone calls, physical meeting

E-mail, phone calls, physical meetings E-mail, phone calls Post and announcements on the professional online networks (e.g. agro-food related LinkedIn groups)

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Some limitations of the analysis need to be noted. First, the participation of SMEs in the survey has been voluntary, which could suggest that companies would be mainly represented by those already interested in eBusiness. SMEs which do not use B2B transactions yet, may not have been motivated to fill in the survey. Secondly, the companies contacted were, mostly, somehow linked to the partners’ networks, afact that would involuntary impose some kind of “filter� done through this choice of companies, even though the supply chains have been targeted. Depending on the scope of the work of each partner, one sector could be overrepresented for some countries, despite the effort to have responses to the survey from companies of each sector. It is obvious that the results obtained, regarding the large scope of targets, cannot be considered as statistically representative of each sector in each country. Yet, the results have been validated through interviews with experts in each country and by desk research. Additionally, the eFoodChain workshop hosted by the European Commission on the 9t of July 2012 in Brussels also served as an opportunity to validate the obtained results and conclusions with pertinent high-level experts. The event gathered in total around 40 participants, representing various sectors and value chain positions within the European agro-food industry. The workshop discussions and constructive feedback received have helped to reshape the Market Analysis Report into its current version, and will also be very valuable for the next stages of the project, namely framework development. Other sections of the report display in more detail the feedback obtained through an interactive exercise conducted, for example in terms of validation of identified challenges and drivers, but generally in can be stated that opinions of the workshop participants, to a wide extent, coincided with the presented project findings reached until now.

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III. Market presentation The agro food chain associates the three sectors that are agriculture, food manufacturing and distribution (combining wholesale and retail). Considering the whole supply chain, the agro food employment, with nearly 25 million employees, represents almost 10% of total European employment (Table 5). Table 5: Operators, employees and turnover of the European agro food chain, 2010

Agricultural holding Food and drink industry Distribution (wholesale and retail)

Operators (1000) 13.700 274 1084

Employees (million) 11.1 4.2 8.1

Turnover (billion â‚Ź) 334 929 2002

( Eurostat, DG Agriculture Statistical and Economic Information Report, 2010)

The agriculture sector is represented by a majority of small exploitations, with only 5% of European farmers holding more than 50 hectares. Italy, Poland and Greece have an average size of farms smaller than 10 hectares. In the studied countries, only Germany, France and the United Kingdom have an average size of farms higher than 40 hectares. Agricultural companies exist, but remain very small in the majority of countries, yet some large collective or corporatized farm structures exist for example in Poland, resulting from the former collective and state farms. The agro food sector is not only the biggest manufacturing industry in Europe with a turnover of 929 billion Euros, but also the leading manufacturing employer with more than 4 million direct jobs. A special feature concerning this industry is the importance of SMEs, as they represent more than 99% of companies, and generate almost half of the industry turnover. SMEs are really the major players of the agro food industry in Europe that need to be taken into consideration. Given this high representation of SMEs in the industry, the importance of general food retail shall also be noted. In fact, food retail in Europe has become highly concentrated in the last decades: 15 big retailers share about 50% of the market (Table 6). Table 6 : Top 15 Food Retailers in Europe, 2010

Rank

Retailer

Turnover (billion â‚Ź)

1 Carrefour 90.1 2 Metro 67.3 3 Schwarz 54 (2009) 4 Tesco 53 5 Rewe 50 (2009) 6 Aldi 46 7 Edeka 44 8 Auchan 43 9 ITM 35 10 E.Leclerc 35 11 Casino 29 12 Sainsbury 28 13 WalMart 21 14 Morrison 19.3 15 Systeme U 17.8 (Food retailers in Europe and worldwide)

Headquarter France Germany Germany UK Germany Germany Germany France France France France UK USA UK France

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Consequently, the relationships along the value chain are influenced by this concentration, and the power distribution between all actors in the value chain isn’t equal. As presented in the Figure 2 (Grievink, 2002), a high number of producers and consumers have to face a low number of retailers and buying desk, who keep power upstream and downstream.

Figure 2: Power repartition in the European agro food chain (Grievink, 2002)

To face this low number of actors in the middle of the value chain, producers are more and more organising themselves into cooperatives. This organization of the producers, into some sort of producers’ organization (association or cooperative), allows them to get more power in negotiations in the supplier-farmer of farmer-processor relationship. However, there is still a huge unbalance in the negotiation power in the supply chain, which also affects the decision of adoption of new solutions or technologies in the supply chain. This force map is represented in Figure 3 and shows that the balance of negotiation power is different in the 3 target sectors. However, concerning the decision to adopt new solutions and technologies in the supply chain, this is concentrated downstream in the chain.

FFV

Dairy

Cereals

Producer

Producer

Producer

Processor

Processor

Processor

Retailer

Retailer

Retail

Figure 3: Force map in the agro food supply chain (by sector)

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Even though direct sales and short supply chains are developing, meaning that B2C relationships are already present in the supply chain, the most common type of business in the agro food sector is still B2B. This is in relation with the fragmentation of the market, with much inefficiency in the supply chain, but also with the customers’ infidelity with the suppliers and the abrupt variation that can happen with the value of products (Bejjani, 2000). Another important relationship that has to be accounted for, concerning the information flow in the supply chain, is with the government or authorities. B2G (and G2G in cross border trade) is also a very important aspect that has to be considered. Currently, multiple requests of information are made to the different players: from different bodies, in different formats and with different purposes. Other important aspect to consider is related to the behaviour of the different actors in the supply chain. These soft factors, like cultural resistance change, confidence and trust, are very important to understand some of the business practices along the supply chain and the reasons for so few innovative solutions. These soft factors have a high variability along the supply chain and all of them, although important when it comes to select or design a solution for supply chain management, are not dependent on the technology but on people.

III.1 Fresh Fruits and Vegetables The production of fresh fruits and vegetables is one of the most important activities in the European agro food system, as it produces around 18% of the total value of the European agricultural production (Eurostat 2009). The demand for fresh, healthier and safer convenience foods has stimulated the sales of fresh vegetables and fruits, which are sold either directly to the consumer or processed in products like salads, ready-to-eat meals, etc. The value chain is influenced by the perishability of the product and by consumer requirements: the time from producer to consumer has to be as shorter as possible and many parallel distribution channels have to exist (Figure 4).

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Figure 4: Fresh fruits and vegetables value chain

The fresh fruits and vegetables value chain creates unique supply chain challenges resulting in a highly complex and inefficient process due to a lot of manual steps and process breaks. It starts with special practical and legal requirements like temperature compliance or food traceability and products are very sensitive and react badly to the wrong transportation or environment. Especially when it comes to short life span products such as fruits or vegetables, the whole supply chain needs to be able to react quickly to change in demand and supply caused by harvesting cycles influenced by seasonal changes or climate conditions. The lack of standardization in product codes is another challenge, which has been in focus over the last years by institutions like GS1, to come up with standard product codes. Still, most of the labelling schemes are not standardised. The rise of EDI (Electronic Data Interchange) has helped to standardize the exchange of documents in the value chain, at least for the larger organisations who can afford to invest in that technology. Still, the fresh supply chain is characterized by a variation in sizes of suppliers from large multi�national companies to small farms or a local grocery around the corner. Not everyone can leverage product code standardization or EDI. These challenges and complexities often result in a very manual process with lots of compromises and a lack of transparency. At the end this leads to a very cost intensive process in a very low margin business, a huge challenge for all participating in this kind of food supply chains. (iTradeNetwork, 2012). Yet, disturbed by the recent food crises, consumers have adopted a new behaviour characterized by precaution. This is expressed by a need for transparency and trust: origin, traceability, quality marks. Across the 10 studied countries, Italy and Spain are the biggest producers (Table 7). France, the Netherlands and Poland are also important producers.

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Regarding consumption, Italy and Spain are also the largest consumers in Europe, with a third of European market. Yet, being the biggest producers, their imports are relatively small. France, Germany and the United Kingdom represent also a third of the European consumption. Germany and the UK aren’t important producers, so they depend much on imports and do not develop export. Belgium isn’t a big producer, but has chosen to develop the fruit trade through re-export, such as the Netherlands do. Table 7 : Production, turnover and import-export values for the fresh fruits and vegetables sector in the studied countries

Volume (1000 t)

Belgium Germany France Greece Italy Netherlands Poland Portugal Spain UK TOTAL

2008 2 410 6 272 5 205 6 633 30 995 5 089 9 273 4 139 28 818 2 986 101 821

Turnover (billion €)

2010 2 023 5 539 8 692 6 606 30 407 4 643 7 977 4 551 27 864 2 666 100 969

Export value (billion €)

2,7 9,5 7,8 1,3 9,8 4,3 4 0,5 7,5 5,4 52,8

6,6 4,3 4,3 1,3 6,3 10,7 2,2 0,6 10,4 0,9 47,6

Import value (billion €) 5,6 13,2 8,3 0,8 4,0 6,5 1,8 0,9 3,2 9,1 53,3

Source : Eurostat, FAO-Stat Agriculture 2008

Fruits and vegetables producers are mostly small farmers, with less than 5 hectares for 70% of the farmers (Eurostat, 2007). Given that, the importance of producers ‘organisations is crucial to balance the relations along the value chain. The rate of organisation, defined as the percentage of producers who are members of a producer organisation, is heterogeneous among the studied countries (Table 8). Poland, Portugal and Greece have less than 15% of organisation, while the average is around 35%. The two biggest producers, Italy and Spain, are below 40% of organisation. The Netherlands is a particular case, with a rate of organisation of 100% because of transnational producer’s organisations (SERFIOTIS, 2008). Table 8: Rate of organisation of Producers ‘organisations, Association of Producers Organisations and Producer’s Groups.

Organisati on rate

Belgium

Germany

89,1%

34,4%

France Greece 46,3%

11,2%

Italy 37,9%

Netherlands Poland Portugal Spain

UK

31,9 %

43,9 %

100%

3,8%

11,3%

(2007)

Source: (SERFIOTIS, 2008)

This rate of organisation is naturally increasing in most European countries, whereas it is decreasing in France, Greece, Germany and the United Kingdom. Other important stakeholders of the fresh fruits and vegetables value chain are wholesalers and retailers. A real heterogeneity exists among the studied countries regarding the number

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of companies (Figure 5): France and Spain have lots of wholesalers and retailers comparing to the other studied countries. On the contrary in Italy, which is the biggest producer in Europe, there are very few wholesalers and retailers specialized in fresh fruits and vegetables. In France, hypermarkets, supermarkets and food stores control about 60% of the market share while the super-discounters cease to advance (12%). Moreover, the distribution is strongly concentrated since the first five retailers now control half of the French fruit and vegetables market (INRA, 2004).

Figure 5: Number of wholesalers and retailers in the fruits and vegetables value chain

However, a few years ago, short value chains stated to develop, especially regarding organic fresh fruits and vegetables. For example, in Italy the first fruits and vegetables producer in Europe, a network called “Campagna Amicaâ€? has been launched in 2009 by Coldiretti to enhance direct sales. In 2010 through this network, 16.000 local producers have sold their products directly to more than 8 millions of consumers, for a turnover of 320 million â‚Ź. This type of business is more and more based, especially in the urban areas, upon Internet transactions (from individuals buyers or organised groups of individuals buyers) to organise the logistics and remain competitive. If the extended value chain including manufacturing industries of fruits and vegetables is taken into consideration, SMEs are highly represented in all the countries studied (Figure 6).

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Figure 6: SMEs in fruits and vegetables manufacturing industries

SMEs represent indeed more than 90% of the companies in every country. Regarding the employees in SMEs, a real heterogeneity exists within countries. In such Mediterranean countries such as Greece, Italy and Spain (no data available for Portugal), SMEs not only represent almost all the companies, but also the majority of employees in the sector. On the contrary, in the UK and the Netherlands, though SMEs make up more than 90% of companies, they account for less than 40% of the employment in the sector: the few big companies are in charge of the major part of the fresh fruits and vegetables process and sales.

III.2 Cereals Cereals, and their numerous derived products, are one of the most important staple foods for people in the world. Their importance for animals feed is also very important, and some new uses of cereals are being developed such as vegetable based chemistry or bio energy. Cereals accounted for some 30 % of the EU’s utilized agricultural area in 2007, and more than 50% in some specific regions (e.g. centre of France, Poland). The cereal industry comprises, after the cereal growing, all cereal grain processing (including the manufacture of grain mill products, starches and starch products), the production of cereal food (including the production of bakery and farinaceous products). Cereal products are a key element of the processed food and beverage industry, typically representing the largest manufacturing industry. The supply chain for cereals is complex with over ten processing stages (Figure 7): grain seed development, farming, storage, processing (milling), product processing, retail, etc.

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Figure 7: Cereals general value chain

In Europe, three types of cereals make up more than 85% of cereals production: wheat (46% of all cereal production), barley (22%) and grain maize (18%). France and Germany are the biggest producers of cereals in the studied countries (Table 9), especially for wheat and barley. The turnover is clearly more important than for the fruits and vegetables sector, as the French and German turnover is almost 30 billion€. France is the major exporter of cereals of the studied countries, before Germany who has the second more important turnover. Spain and Italy are rather importers of cereals despite a quite important volume produced. Table 9 : Production, turnover and import-export values for the cereals sector in the study countries

Volume (1000 t)

Belgium Germany France Greece Italy Netherlands Poland Portugal Spain UK TOTAL

2008

2010

3 113 50 105 70 108 5 238 21 613 1 963 27 664 1 310 23 937

3 042 44 413 65 676 4 499 18 996 1 804 27 120 1 124 19 335

24 282 229 334

Turnover

Export value Import value

(billion €)

(billion €)

(billion €)

1,0 2,6 6,9 0,2 0,8 0,5 0,1 0,04 0,001

1,8 1,9 0,9 0,4 2,4 2,4 0,6 0,8 2,7

20 929

5,5 29,2 29,5 3,4 26,6 6,9 6 2,5 9,9 19,1

0,8

1,2

206 939

138,6

12,95

15,14

Sources: FAO-Stat Agriculture, Eurostat. 2008

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Within the cereal sector, different subsectors can be defined. Human alimentation (through milling or brewing and malting industries) represents only a part of the cereals consumption, (for example in France: 25%). Animal breeding is traditionally the most important destination for cereals, with for example more than half of the French production. Finally, starch manufacture, and the different sub products (beverage or confectionery industries but also chemical industries such as biogas production), is another use for cereals. The number of companies is not directly related to the production or the turnover. In fact, it represents up to 50.000 companies in France because of bread production and in Italy because of pasta production. Yet there are less than 3000 companies in the UK and the Netherlands (Table 10). Table 10: Number of companies and employees in the cereal manufacturing industry

Belgium Germany France Greece Italy Netherlands Poland Portugal Spain UK

Number of manufacturing companies 4943 16.154 50.597 10.476 48.549 2375 7755 7379 11.285 2004

Number of employees 22.801 213.337 187.898 25.064 129.234 29.582 -49.253 76.355 108.222

Source: Eurostat 2007, -- : no data available

As data on SMEs aren’t available for the whole cereal manufacturing industry, we can take into consideration the grain and starches manufacturing industry. The high representation of SMEs might be noted for each study country (Figure 8). Yet, these SMEs don’t represent the majority of employees of the sector, except in Poland, Greece and Italy. In Belgium, the Netherlands and the UK, although representing the majority of companies, SMEs account for less than 40% of employees.

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Figure 8: Presence of SMEs in the Grain Manufacturing Industry in the study countries

III.3 Dairy products Europe is the biggest producer of milk in the world, and Germany is the most important European producer. Many different dairy products are derived from milk: different types of milk, butter, cheese and yogurt are a few examples. In Europe row milk for processing comes mainly from cows and, to a lesser extent from goats or sheep. The dairy products supply chain (Figure 9) runs from the breeder to the consumer, and includes milk process, transportation and retail. Moreover, the dairy products supply chain (from dairy farmer to processor to retailer) has processing and packaging safeguards in place to eliminate potential health risks. Some farmers still process themselves their milk (especially for cheese production) and sell it through short circuits directly to the consumer.

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Figure 9: Dairy products supply chain

Germany and France are the most important producers of milk in the studied countries, while Portugal and Greece are the smallest producers with less than 2 million of tons collected. Although it isn’t such a big producer as France or Germany, the Netherlands exports dairy products almost as much as France. Table 11: Production, turnover and export value of the dairy industry in the study countries

Volume collected (1000 t)

Belgium Germany France Greece Italy Netherlands Poland Portugal Spain UK TOTAL

2008

2010

2 849 28 692 24 376 2 095 12 116 11 303 12 445 2 077 7 374

3 067 29 665 24 206 2 100 11 345 11 649 12 298 2 065 7 544

13 719 117 047

13 960 117 898

Turnover (billion €)

4,2 27,8 27,9 2,1 17,7 9,6 6,2 1,7 10,7 9,7 117,6

Export value (billion €)

Import value (billion €)

2,0 6,1 5,0 0,3 1,5 4,6 1,0 0,2 0,6

2,4 4,6 2,2 0,8 2,9 1,7 0,1 0,4 1,6

0,8 22,2

2,4 19

Source: FAO Stat Agriculture, Eurostat. 2008

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Milk collection is done in dairies, and most of them have a small capacity except in Germany and Belgium, where a third of dairies collect more than 100.000 tons of milk (Figure 10). In all other countries, the large majority of dairies collect less than 5000 tons of milk, except in Poland where dairies are a little more important. Greece, which has a small production of milk, has a high number of dairies, but still less than Italy. It is consistent with the importance of SMEs in the industry. More than 90% of companies are SMEs in every study country (Figure 11). Moreover, in Italy these SMEs make up 76% of the employment.

Figure 10: Number of dairies by volume collected in the study countries

Figure 11: Presence of SMEs in dairy industries of the study countries

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In Europe, about 58% of milk collection is controlled by cooperatives. These cooperatives are very different from traditional producers groups, as they actually control more than the collection, usually with processing industries and distribution through adapted brands. Within the studied countries, German and Polish milk collections are even more controlled by cooperatives than in the rest of Europe, with control of 70% and 75%. The Netherlands has a special feature, with only one cooperative, Friesland Campina, controlling more than 80% of milk collection. Moreover in France, since 2011, the implementation of a written contractual commitment, formalized for a minimum of 5 years between producers of milk and milk buyers is now mandatory. This conclusion of contracts should help establish lasting relationships in the sector, but it preserves the volatility of the milk price. The future of the milk industry in Europe will depend on the abolition of the milk quotas on one hand, which could lead to a complete de-regulation and globalisation of the milk production, and on the increase of third countries consumption on the other hand. It leads to a real need of modernization from the producer to the distributer to remain competitive, and it highlights the importance of export in the upcoming years. Moreover, the safe and security demand from the consumer is high, notably after such scandals as the Chinese melamine milk scandal from 2008. These opportunities are crucial for cooperating associates who want to produce additional volumes of milk at a marginal cost. They are key for the dairy cooperatives which will have to collect, value and pay these additional volumes without degrading the profitability of their core business. The adoption of new ICT solutions in the supply chain, preferably with cross border integration, may help to exploit these new opportunities.

III.4 Main stakes of the agricultural sector in Europe Regarding the structure of the three sectors described, one important issue is the situation of SMEs. They represent a huge majority of enterprises in almost each sector, even though depending on sector and country, and they employ more or less people. So, allowing these SMEs to be fully integrated in the agro-food supply chain is an essential point. Moreover, the agro-food supply chain is nowadays a European and multi-sectorial value chain. So, the integration of SMEs is not only the main point, but also the interoperability of communication processes among different sectors and across borders. Another specificity of the agricultural sector is the perishability of products and the sanitary concern. Such examples of sanitary crisis as the “cucumber crisis” in 2011 reveal not only the risk related to good quality products in terms of human health, but also the importance in economic terms for the whole sector to have an efficient traceability. The European regulation 178/2002 laydown the general principles and requirements of food law, establish the European Food Safety Authority and lay down procedures in matters of food safety. In this regulation the concept of traceability is also addressed: “the traceability of food […] and any other substance incorporated into a food shall be established at all stages of production,

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processing and distribution. [‌]To this end, such operators shall have in place systems and procedures which allow for this information to be made available to the competent authorities on demand.� Other specific issues that also have an important impact in the choice and adoption of new solutions in the supply chain are the unbalance in the negotiation power, and the trust and confidence issues already described previously. This description of the agro-food market and of the supply chains of the target sectors of the eFoodChain project, without being exhaustive and complete, enables to conclude on its complexity (with factors like market regulation changes and other soft factors like trust and confidence) and heterogeneity (with many differences between sectors and countries in the practices and size of the players).

Figure 12: Issues and factors with impact on the supply chains

This complexity and heterogeneity has to be taken in to account, not only on the market analysis that is the focus of the report, but also when identifying the needs and deriving the requirements for the eFoodChain framework.

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IV. Current Situation IV.1 Use of ICT solutions underpinning B2B transactions in the food supply chain In order to analyse the adoption of ICT solutions in the food supply chain for the direct support of B2B transactions in food supply chains, a survey was conducted in ten European countries during two months. Even though the results can’t be statistically significant, it must be mentioned that some of the respondents are associations and cooperatives representing thousands of producers or large groups with lots of processing factories and having a global vision on the subject at hand. Moreover, in order to confirm and detail results obtained through the survey, interviews with experts or key stakeholders were leaded in many European countries. Both the survey and interviews targeted the level of adoption of electronic data interchange messages for product information, catalogues, orders, deliveries, payments and track and tracing of food products in B2B transactions through several means (EDI, XML, Web-EDI, ebXML and market places). IV.1.1 Adoption of ICT solutions: survey and interviews results IV.1.1.1 Global trends in the use of ICT In a first look to the survey results, the use of ICT in B2B transactions by agro-food companies seems to be quite common: among the companies surveyed, a large majority exchange electronic business messages with their business partners. In general (Table 10), less than half of the companies using ICT in B2B transactions automatically process incoming/outgoing electronic messages, although a third of the companies using ICT automatically process the majority of their electronic messages. This is true concerning financial messages. But when it comes to logistics messages the landscape is quite different in most countries. Yet, a not insignificant part of the companies still have no messages automatically processed at all (Table 12). Table 12: Percentage of electronic messages automatically processed

Percentage of messages automatically processed 0% 1-25% 26-45% 46-100%

% of companies 9% 44% 20% 27%

 Differences within and between sectors As explained in the methodology, some respondents represented more than one company: cooperatives or organisations answered the questionnaire for their members. So, it is important to take into account this weight in the analysis. This allows us to provide an analysis on thousands of companies, and to present the level of adoption of ICT in B2B transactions in

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the three sectors and between upstream (producers and cooperatives) and downstream (all other companies: processors, distributors, logistics service providers…) of each value chain, as presented in the Figure 13.

Figure 13: Adoption of ICT solutions in B2B transactions by companies surveyed in different sectors, results weighted.

There is a clear difference of adoption between upstream and downstream in each sector. Less than 60% of the surveyed producers and processors use ICT for their business transactions, compared to up to 81% of the distributors (Annex 8). At first sight, the fresh fruits and vegetables sector has quite well adopted ICT for B2B transactions even in upstream in a lesser extent. On the opposite, in the dairy sector, the producers represented in the survey don’t use ICT for B2B transactions compared to retailers or processors (downstream level): 86% of them use ICT for their B2B transactions. For example, Danone, the 1st dairy group in the world, offers to its suppliers and manufacturers a range of EDI messages for automation and paperless information flow, from order to invoice (Danone, 2010). Such big groups usually have policies of ICT systems deployment in their subsidiaries. Danone Group has established a Supplier Relationship Management solution covering the process of analysis of expenditures, supplier selection, contract management and analysis of supplier performance. The objective is to structure and strengthen the internal purchasing processes and relationships with suppliers. In the cereals sector the difference is also significant between producers and the rest of the value chain.  Differences between small and big companies The deployment of ICT solutions in B2B transactions is less common in small companies (Annex 10): almost all big companies already use ICT in B2B transactions, compared to less than 60% regarding small companies (less than 50 employees). This can be explained by several reasons:  the low level of investment of small companies,

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  

the fewer information flows exchanged by smallest companies, which tend to have less business partners, the lack of skills within small companies, which can’t afford to employ ICT specialists, some cultural resistance at the producer level to new technologies and eBusiness (with fears related to confidentiality).

 Differences among countries However, these results need to be nuanced regarding each country, as presented in Figure 11. It must be kept in mind that these results don’t aim to be representative of a whole country, regarding the low number of companies having responded to the survey. In Portugal, for example, and according to the interviews carried with major actors in the food supply chain and ICT services providers, only companies dealing with big retailers exchange electronically financial messages (due to the fact that it is made mandatory by the retailers). In Spain also, the companies surveyed insisted on the low level of adoption of ICT solutions on the upstream of the sectors, as explained below in the report. In addition, it might be noted that in Greece, clearly less companies currently use ICT solutions in B2B transactions than what the survey reflects. In Poland, a research was conducted in 2009-2010 by the Agriculture University in Warsaw by Dr. Tomasz Ząbkowski and Dr. inż. Piotr Jałowiecki focusing on ICT solutions in logistics of agrofood SMEs. This study confirms what was stressed by the interviews: the use of ICT solutions to support logistics activities is still very low in the country. It seems that the main barrier could be the insufficient knowledge level of the respondents.

Figure 14: Adoption of ICT in B2B transactions by companies surveyed in different countries (except Belgium and Poland, less than 10 answers)

Interviews and discussion with experts allow us to describe more precisely the situation in Portugal, which is very similar to the situation in Spain and Greece. Electronic and automated data exchanges at the beginning of the supply chain (close to the “farm”) are practically nonexisting in Portugal. The majority of agro-food producers are still traditional small producers, among which the adoption of ICT (not only for B2B transactions) is very low and where cultural background and resistance to changes, combined with the lack of resources, skills and investment do not facilitate the modernization of current data exchange practices (these are mostly manual and paper-based, even though a trend is being noticed on the use of SMSs by mobile phones). Producers collaborating in cooperatives and other forms of associations seem to be more open to apply new ICT solutions, but such innovations are usually initiated with a

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top-down approach and still meet barriers in execution. Producers’ organisations already have their own information management system, where the information from the individual producers is manually introduced, and to some extent already exchange electronic business messages with big retailers and distributors. However, these messages do not cover all types of information but are exclusive to financial related information (order, invoice, etc.). This structured exchange of electronic messages is mostly supported in EDI and integrated with the producers’ organisation information management system. While moving upwards in the supply chain, the level of adoption of digital data exchanges increases, resulting, to great extent, from the requirements imposed by the distribution and retail sector. But again these are limited to financial related information. Automated systems are most commonly used for orders and payments, but even the most advanced cases barely implement EDI for a full spectrum of business messages. Therefore, there are still numerous scenarios that are not digital and neither harmonized among stakeholders. The examples of such gaps where the interviewees recognize the need for improvement and foresee significant gains from the optimization of data exchanges include: logistics processes (incl. interaction with logistics providers), various types of certification procedures and reporting to authorities. Looking at the service providers and integration with the authorities, a huge gap is recognized. The need to provide different information to several authorities – for traceability, certification and even financial support – creates a big burden on several players in the supply chain, but mostly at the level of the producers and producers’ organisations. There are also recognized benefits in the exchange of specific logistics messages (for example, dispatch advice messages) since this information would allow optimizing not only the transport but also the reception of the goods, with a significant reduction of costs. IV.1.1.2 Message formats and technologies commonly used As depicted in Figure 15, in the three sectors of the ten studied countries, the most common electronic messages exchanged between companies are ordering and financial messages (orders, order responses and invoices). The predominance of EDI through UN/EDIFACT standards in all message types prevails over the other methods, thus being the most important way of exchanging electronic business messages. Also, an important part of the companies using ICT solutions prefer this standard for orders or invoices messages (Figure 15). Regarding Web-EDI and XML, the usage of both methods is quite similar in most of the business transactions. Adherence to the ebXML framework is insignificant. The exchange of electronic business messages isn’t integrated with other business information systems in 40% of companies. However, almost half of them have a system integrated with their ERP (Enterprise Resource Planning). Moreover, developing systems which could allow data integration into ERP seems to be very important. Besides, according to the survey, few companies automatically exchange traceability messages (Figure 15), and few companies use machine readable labels. Among the surveyed companies, almost 60% do not provide machine readable labels to their customers, and more than 80% of them do not request such labels from their suppliers. Yet, new legislation (following the

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General Food Law) regarding traceability might influence this, as many companies plan to develop traceability systems (section V.1.2).

Figure 15: Types of electronic messages and technologies used in B2B transactions

The use of the Internet for business transactions is still low. More than a third of the surveyed companies never use partners’ web portals and half of them use less than 4 web portals regularly. For the electronic exchange of business messages, the main benefits expected from companies in general are an increasing of productivity and an improvement of the business relationship with their business partners and clients. Nowadays, using ICT solutions is necessarily associated with the aim of achieving these objectives. For example, in Germany the trend for data exchange systems and e-business conditions shows that the interest in electronic data exchange is growing in the food supply chain. This is mainly triggered by the demand of customers (market pressure) to save time and money in the purchasing process. Therefore, the most interesting projects are linked with the product (e.g. electronic catalogues, e-invoicing and traceability criteria). Overall, the downstream of the agricultural and food sector is pretty well covered by electronic data interchange, not only in business exchanges as invoices, dispatch advices, delivery notes, but also for product traceability (mostly intern traceability). Upstream, data exchanges on traceability of primary production are limited. Thanks to interviews leaded with highly-representative actors and depending on each partner involved in the eFoodChain project, some more detailed observations have been obtained to complete and validate the survey results. Notably, the Fruits and Vegetables in the Netherlands can be more precisely analysed thanks to DPA, such as the Cereals and Dairy products industries in France with AGROEDI Europe network.

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IV.1.1.3 Fresh fruits and vegetables sector The fresh fruits and vegetables sector is, among the three studied sectors, the one with the better adoption of ICT in B2B transactions at the level of producers (Table 13) because the demand for high quality products from the customer has led to an important development of traceability. Moreover, short business cycles are common in the fresh fruits and vegetables sector which need a reliable, fluent and automatic traceability management system: so many companies are already familiar with ICT through traceability. Table 13: Adoption of ICT in B2B transactions in the fresh fruits and vegetables sector

Use ICT in B2B transactions Don't use ICT in B2B transactions

Upstream 44% 56%

Downstream 96% 4%

In order to analyse this sector, a focus on a significant country as the Netherlands is particularly interesting. Indeed, the Fresh Fruits and Vegetables sector in the Netherlands is highly organised, especially with the transnational cooperatives, which is interesting regarding the use of ICT.  Focus on the Netherlands In order to analyse the Dutch Fresh Fruits and Vegetables sector, and more precisely on small companies, we base the analysis on results obtained through the survey (Table 14) and additional information collected by interviews with:  Cooperatives of Dutch growers, which are also traders & packers (or even processors) in fresh Fruits & Vegetables. Sixty three producers answered the survey directly, but also groups representing 1500 companies downstream.  ICT Solutions Providers, which are active in the Horticulture Industry or even other agro-food sectors like dairy, cereals and meat industry (logistics service providers, traders, packers & retailers). Table 14: Respondents to the survey in the Dutch Fresh fruits and vegetables sector

63 17 9 2 6

Producers, groups of producers or cooperatives Processors Distributors, logistics service providers Retailers Supplier of services, equipment, technology, materials

Note: Some companies have several activities

The majority of these SMEs already use automatic exchange of data for many different types of messages. The companies interviewed explained the reality of data exchange systems in the sector: from Cultivation/Crop Message to ERP & WMS (Warehouse Management System) systems, and from the grower to selling of Fresh Products to customers (retail stores, traders, packers).For the SMEs surveyed, not only orders and invoices are exchanged electronically, but also delivery information (ships/instructions), traceability, payments, etc. Yet, orders and invoices are the two most important messages exchanged electronically for more than a third of the companies. Regarding traceability, even though not that many companies recognized

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the importance of electronically exchanging traceability messages, many of them have ongoing projects to implement traceability (Figure 16).

Figure 16: Ongoing projects in the fresh fruits and vegetables companies surveyed from the Netherlands

In relation with those projects, two major problems have been noted:  Development time;  Financial investment costs. Therefore, more technical problems as standardization of exchanges, compliance with procedures and integration with management systems are noted. The benefits expected from the development of ICT solutions by Fresh Fruits and Vegetables’ SMEs in the Netherlands are mainly improving the quality of services and reducing manual data entry, allowing savings of time and money. In general, a successful implementation of a new ERP-system, without losing some of the functionalities of the old system, is noted as a project to be developed by the interviewed agro-food companies and ICT solutions providers. IV.1.1.4 Cereals sector The cereals sector clearly presents a different level of adoption between the upstream and downstream of the sector (Table 15). Table 15: Adoption of ICT in B2B transactions in the cereal sector

Upstream Downstream Use ICT in B2B transactions 24% 74% Don't use ICT in B2B transactions 76% 26% The downstream, dominated by large-scale retailers, has well adopted ICT for B2B transactions, mainly for business messages such as orders, invoices or quotations but also in a lesser extent for logistics messages (dispatch advices, delivery ships and instructions). The upstream is not as well fitted as the downstream regarding the very low level of adoption of 24 %. In fact, only few cereals producers exchange automatically traceability messages with their partners, especially in France thanks to the EPIPHYT system (p.79).

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 Focus on France Among the studied countries, France is the biggest producer of cereals, and all companies surveyed already use electronic data interchange. So it is relevant to have an overview of this sector in terms of eBusiness, even more as the sector has been well involved in the survey: the whole supply chain is well represented, from producer to retailer, with companies or groups representing nearly 30 000 producers and almost 300 000 companies downstream (Table 16). Table 16: Respondents to the survey in the French cereal sector

7 6 9 23 7

Producers, groups of producers Processors Distributors, logistics service providers Retailers Suppliers of services, equipment, technology, materials

Note: Some companies have several activities

To fully understand the sector, it should be noted that the cereal sector in France is organised by cooperatives. With 70% of market share, collection storage and marketing cooperatives are clearly the leaders. In the main production areas, these cooperatives are the same as those that ensure the marketing of grain, allowing them to take into account, regarding the technical advice, the expectations of the market and the specifications of their buyers. Moreover, the collection cooperatives have invested in the sectors of processing of grain, either by creating their own tools or by taking participations alongside other operators. So, cooperation is very present in the milling, malting, animal nutrition and, more recently, the production of biofuel. Regarding the use of electronic exchange of messages, 100% of companies surveyed already use it: this level is emblematic of a real adoption of ICT in B2B transactions in the cereals industry. The adoption of dematerialized contracts in the “quality lines� and organic sector might explain this high level of adoption of ICT in B2B transactions. Yet, the current use is mainly for business messages such as orders or invoices (Figure 17). All the companies surveyed agree on the importance to get a stronger integration, except one of them. Three types of messages are really important to be exchanged electronically for almost all of these cereal companies: invoices, orders and dispatch advices.

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Figure 17: Types of messages electronically exchanged in the French cereals industry

Once again, traceability messages still aren’t exchanged electronically by those companies: only three of them use EDI for traceability. Yet, almost half of them plan to develop a project of traceability within the next 18 months. This is the most common project, and the other types of projects are: • Implementation of a Customer Relationship Management; • EDI; • E-invoicing. Currently, dematerialized contracts are already in place for the “quality lines”, through services over the Internet. About the implementation or future implementation of these projects, three main barriers have been noted by companies: • Problems of standardization of exchanges; • Resistance to organisation changes; • Potential customers still insufficient. By developing their use of ICT, the surveyed companies wish to improve the quality of their services in order to save time and money by reducing manual data entry. In general, companies in the cereal industry in France are interested on eBusiness technologies and wish to develop it throughout the whole supply chain. IV.1.1.5 Dairy sector In this sector, none of the surveyed companies representing the upstream did use ICT in B2B transactions (Table 17). Even though it is obviously not representing the reality (some German big companies use ICT with their producers), it gives indication on the adoption of ICT in B2B transactions at the milk producer level: very low adoption. This is even more interesting as the downstream of the sector has well adopted ICT in B2B transactions, with 86% of companies currently using it.

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Table 17: Adoption of ICT in B2B transactions in the dairy sector

Use ICT in B2B transactions Don't use ICT in B2B transactions

Upstream 0% 100%

Downstream 86% 14%

As in the other sectors, the use of ICT in B2B transactions is mainly made for business messages such as invoices or quotations, at the level of the distributor. Currently, the cooperatives interviewed explained that they use ICT in B2B transactions, but only with largescale retailers and not with their producers.  Focus on France A low level of adoption was noted by the first results in the dairy industry compared to the others. It is interesting then to get more detail regarding the French dairy industry, as it is one of the most important producers of dairy products in Europe, with a high level of SMEs. Producers, processors and retailers answered the survey (Table 18), and interviews with the first French cooperative and the first dairy group in the world help us have a good overview of the sector. The dairy sector is also organised with cooperatives, but less than in the cereal sector: they control 54% of the milk collected and 45% of processed milk. Table 18: Respondents to the survey in the French dairy sector

33 35 1 24

Producers, groups of producer or cooperatives Processors Distributors, logistics service provider Retailers

Note: Some companies have several activities

Considering the groups and cooperatives that answered the survey, 35 000 companies downstream and 4800 upstream were actually represented.

The most important result of the survey confirms the very low rate of adoption of ICT in B2B transactions in the dairy sector: only 6 out of 36 companies already use such technologies (Figure 18), and none of them use electronic exchange of data for traceability messages. Moreover, almost any of them is interested in developing such projects and doesn’t wish to reduce handling paper.

Figure 18: Adoption of ICT among the French dairy companies surveyed

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This result needs to be nuanced yet. In 2006 a survey conducted with more than 13000 companies, including about 200 milk industries, stressed that 58% of those companies were equipped with EDI. (INSEE, 2006) This is even a better level of adoption than in the global agro food industry (46%) and the industry in general (40%). Moreover, the first French cooperative explains that they use EDI with their customers, who are mainly large retailers, and also with their shippers. On the other hand, they do not use automatic exchange of data with their 13 000 producers, even though they would like to. The implementation of EDI is only at the “thinking stage” for companies wishing to invest in ICT to increase their productivity and competitiveness. According to the companies surveyed, some exchanges that could be developed with the upstream of the agricultural sector would be bills of agricultural supplies, milk pay and technical records for dairy farmers. Yet, problems of interoperability and wrong application of standards (with a problem of cross border) slow down the development of ICT, even for big companies. It might be relevant to note, however, that the situation of the French dairy industry is quite different from the one experienced in the German dairy industry, which seems explicable by the different market structure: in Germany the top 10 dairy companies represent a huge market share. And from an interview with the German association, representing the most important processors in the country, it became clear that the major firms (which are not SMEs, as SMES are not frequent in the dairy sector in Germany) use at least GS1 solutions. Therefore, the French reality presented in this section in not intended to be the showcase of the overall European situation in the dairy sector and the low rate presented is clearly related to the upstream of the sector. IV.1.2 Specific implementation of B2B transaction needs in the dairy sector In 2009 the use of existing GS1 standards within the dairy sector was well established. However, since the existing recommendations did not include all the particularities of this sector, the development of special application recommendations was agreed by the concerned retailers and industrial enterprises. Hereby, the aim was to handle open and important industry issues:  GTIN (Global Trade Item Number) allocation rules;  “Best before Date” change in one pallet;  Assortment units;  Batch management. Basically, the labelling shall be provided for each shipping unit according to the GS1-128 standard (Figure 19). The size of the GS1-128 label depends on the amount of data to be encrypted in the bar code. GS1 recommends the use of the ISO A6 and A5 formats. The supplier (e.g. dairy companies) is responsible for the arrangement of the identifier in the barcode. The exception is the NVE (SSCC) (DB 00), which basically must be specified in the lower segment of the barcode. The group agreed on important data identifier in the GS1-128 code.

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Figure 19: Example of GS1-128 label (example from GS1 US Guideline) Table 19: Important data identifier for the dairy chain

DI 00 01 02 10 15 37 310

Data content Serial Shipping Container Code (SSCC)) The trade unit GTIN GTIN of contained unit Lot number/batch number Date of minimum shelf life (YYMMDD) Number of contained units x net weight, kilograms

Format n2 + n18 n2 + n14 n2 + n14 n2 + to...20 (FNC1) n2 + n6 n2 + n..8 (FNC1) n4 + n6

Additional solutions for the special B2B transactions were developed. Here are the details: Table 20: Core issues and solutions for the dairy chain

Important Issues GTIN (Global Trade Item Number) allocation rules “Best before Date� change in one pallet Assortment units

Batch management

Question to be solved When is a new GTIN to be used? How can we handle different best before dates? How do we handle different articles and best before dates in one unit?

What do we do if we do not have a batch number?

Solution If relevant distinctive features of an article change, a new GTIN is to use (e.g. change of net weight for promotions) The older product is stacked over younger goods. The 128 GS1 code specifies the first achieved best before date. Every article which is in an assortment box needs identification with a GTIN, because it is sales unit. GS1 recommends the specification of the first achieved best before date. If there is beside the best before date no separate batch number available, the date value of best before date can be used as a batch number.

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Use of ICT in B2B transactions: key issues The first trend noted by the analysis is the difference between the three sectors studied: the dairy sector appears less involved in ICT B2B development than the cereals sector and, to a lesser extent, than the fresh fruits and vegetables sector. Yet, differences between countries are also evident, as for example between France and Germany in the dairy industry. A gap has been emphasized along the value chain in all the studied countries. A clear difference of adoption between upstream and downstream is noticed in all the three types of food chains: more than 80% of distributers claim to use ICT in their business transactions, while less than 60% of producers and processors do use ICT. In the particular case of Portugal, Spain and Greece, personal interviews emphasized a very low level of ICT adoption in the upstream area. These differences are closely related to the size of the players in these areas of the value chain (upstream/downstream) and also with the different power relations in the chain. Looking separately into each sector:  Fresh fruits and vegetables: almost half of the surveyed companies use ICT in the upstream and more than 90% of the downstream area use ICT.  Cereals: the difference between the usage of ICT in the upstream and in the downstream is significant (24% for the upstream and almost 80% for the downstream).  Dairy: the difference here is even bigger (practically no ICT usage in the upstream against almost 90% of usage in the downstream). Looking at the size of the companies, the adoption of ICT in B2B transactions is clearly much lower in small companies compared with big companies as expected from the beginning of the analysis. Moreover, the use of ICT in B2B transactions is related mostly with financial messages (order and invoice messages) with some use on logistics messages (dispatch advice, delivery ship), but not significant and a very low level of adoption for traceability and other purposes (like certification, optimisation, sustainability, etc.). Regarding message formats and technologies the following identifies the main findings from the survey and interviews:  In all three sectors, orders, order responses and invoices are the most common electronic message in use.  Few companies exchange traceability messages and this kind of message is the one less adopted between all the other message types.  Predominance of the EDI/EDIFACT standard over the other methods. Adherence to the ebXML is insignificant. Usage of Web-EDI and XML is quite low in all business transactions.  Usage of market places in the Internet is still low (more than a third of companies don’t use partners’ web portals and half of the companies use regularly less than 4 web portals).  40% of the companies using ICT for B2B transactions do not have their B2B data exchanges integrated with internal business information system (ERP, MES, …). This Data integration ranked high in responses.  Machine readable labels are not common at all: 60% of the companies do not provide machine readable labels to their customers and more than 80% do not request them from their suppliers. The needs created by food and safety regulations (related for example with traceability) will probably change this situation.

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IV.2 Existing ICT standards, specifications and B2B solutions related to food supply chains at European and international level The business communication needs to be faster and faster. Business transactions have to be instantaneous. That is particularly true in the agro-food chain, regarding the numerous sanitary crises. Traceability information has to be transmitted at the same time as the product delivery. Consumers must know how the apple grew, what kind of chemical products were used to get a flawless red apple. In order to allow such transfer of information and regarding the increasing use of ICT in business and even in private use, standards are needed to ensure interoperability between the different ICT systems. IV.2.1 ICT Standards work Since the 80’s, the UN/CEFACT coordinate and publish standards in order to facilitate electronic business in all activity sectors. Inside the UN/CEFACT, the Program Development Area/Sectoral/Agriculture focuses on standardization of business transactions in agricultural sectors. Several examples of published messages tally with the problematic of the eFoodChain project mainly because these standardised messages have been created for farmers (e.g. to allow them to respect regulatory issues such as traceability) Since the publication of the European RE 178/2002 regulation, each partner of the agro-food chain is responsible for his own traceability and must be able to communicate to his partners the traceability of his sold products. In connection with standardised messages, it is important to be able to transfer information, to be sure that this information is understood by all partners and that, in return, you're able to decrypt what you receive. Everybody must speak the same language to understand well each other. This is the role of identification systems (as GS1 offers) and reference table of codes (mostly developed within each country) IV.2.1.1 UN/ CEFACT The United Nations Centre for Trade Facilitation and Electronic Business is an intergovernmental organisation which supports activities to improve the ability to exchange products and services between business, trade and administrative organisations from developing, transitional and developed countries. As a means of reducing barriers for international trade, the UN/CEFACT develops Trade Facilitation Recommendations and Electronic Business Standards. The most important and widely used electronic business standard is the UN/EDIFACT. Besides the EDIFACT standard, the UN/CEFACT nowadays combines business experts from various countries, regions and business areas to develop the Core Component Library (CCL) of business information entities (BIE) as re-usable components for electronic message development.

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The UN/CEFACT has a Memorandum of Understanding with ISO and produced standards using ISO standard n°9738 for EDIFACT and ISO standard 15000 for the XML/UNCEFACT. There are sectorial organisations which adapt these UN/CEFACT standards for a sectorial use like GALIA (automotive) GS1 (supply chain), Agro EDI Europe (agriculture), Florecom (cutflowers and plants) and Agroconnect (agriculture). The UN/CEFACT Forum International PDA Sectoral/Agriculture (formerTBG18) was created in 2005 during the 7th UN/CEFACT Forum in Lyon, France. This group is managed by Agro EDI Europe. The purpose of the PDA Sectoral/ Agriculture is to: • develop and maintain Business Process Models, the Business Transaction Models, the semantics and the contents in a syntax neutral way in order to fulfil the requirements of the Agro – Food communities within the framework of the UN/CEFACT Forum Trade and Business Groups; • identify the standard message requirements for data transfer in food production and to develop and maintain the standard messages in the agriculture and food business. According to the Internet emerging technologies these are based on XML technology, which includes Business Object libraries and XML (eXtensible Markup Language) DTDs/Schemas. The aim is to provide users a developing and/or migration path to these models and new technologies. For this purpose the TBG18 has to participate in other organisations and forums; • approve, based on the syntax neutral business transactions, the corresponding UN/CEFACT syntax solutions provided by the UN/CEFACT Forum Applied Technologies Group (ATG); • encourage the active participation of interest communities in agriculture, agro equipment, suppliers and food industry in production, industry, trade and procurement, in accordance to the TBG18 membership criteria; • maintain close relations with other UN/CEFACT Forum groups, other TBG working groups and with UN/CEFACT associated organisations as appropriate. To fulfil the objectives listed above, the UN/CEFACT Forum International Trade & Business Processes Group 18 (TBG18) is currently working on:  Cattle Registration Information Exchange  eDAPLOS project  eArchiving project  eCert - XML for Sanitary & Phytosanitary Certificates  EDI of Agronomical Observations Report  eLabs  Fish Traceability  Needs for the flower and seed sectors which are not covered now by UN/CEFACT XML CII, but are in EDIFACT Invoice

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Figure 20: The UN/CEFACT eBusiness Standards Stack (VOGEL, SCHMIDT, LEMM, & OSTERLE, 2008)

 Focus on E-daplos project The farmer is obliged to spend more and more time in collecting and transmitting many different types of information related to its activity (funding, traceability, work forms, environment management, …) and required by various partners and institutions. This imposed overhead is added on top of its main activity which is to produce the agricultural goods. Because of this trend, the main economical actors and institutions are committed to the development of various systems focused on the management of this growing and complex flow of information. The setup of these systems is based on new information technology and has stimulated the use of EDI. This opens the road to electronic administration and will contribute to the progressive setup of a “networked” agriculture. But the deployment and integration of new methods of managing information is still limited by several factors: • The great number of different systems used; • The incompatibility between those systems; • The complexity of procedures; • The lack of training; • The setup costs, EDI / EDIFACT being too expensive for small enterprises. Regarding the commerce of products, data exchanges are currently done between farmers and producers’ organisations and traders. Various and heterogeneous types of data exchanges are currently used. An important work of standardization is mandatory here. That’s why UN/CEFACT works at an international level on methods and tools for the standardization of data exchanges, based on socio-economical and technical needs of the farmer community. This message has been developed within the association with Agro EDI Europe and has been standardised by UN / CEFACT since March 2005, becoming the first EDI standard message for

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the agricultural sector at international level (this EDIFACT message is present in the UN/CEFACT Directory D.05B). Farmers must be able to produce reliable records about input and techniques used on crops (type of input, rate and date of application), and on livestock conditions (like the nature of feed, the quantity of feed and the use of drugs). The demand for traceability implies that farmers are able to register data in the same manner despite the variety of software used for management purposes or the way in which products are sold. The objectives of eDaplos are:  harmonization of the definitions of the technical data in order;  development of consensual data dictionaries which could be used as a basis for all the steps of traceability;  installation of a standardised Crop Data Sheet message to facilitate the transmission of information from the field and addressing all vegetable cultures. The majority of the farms are Small and Medium Enterprises (SMEs) and according to the UN/CEFACT the use of ebXML format is the best way to follow in order to increase electronic data interchange: in 2008, this Crop Data Sheet Message was normalized in ebXML (known as eDAPLOS message). This message is currently used in France mainly in the Cereal Sector and should be developed in the Fresh fruits and vegetables sector. The European use of such standardised message could limit big sanitary crisis as we saw last year in Germany, which estimated lost in Europe is around 600 million€. An application of this work is the implementation in the Netherlands of the DAPLOS “Crop Data Sheet Message”. 

Adaptation of the UN/CEFACT eDaplos to the cultivation message in the Dutch Fruits and Vegetables sector As it is desirable to more efficiently cope with the exchange of crop data of fruits and vegetable products, and thereby better facilitate the commercial process, a GS1 Crop report has been developed for the Dutch Fruits and vegetables sector. Differences in the information requested by chain parties lead to additional costs in the chain, which could be avoided with a standardised process. Furthermore, the provision of this information often involves manual work that is performed twice because information is needed at various stages of the supply chain processes. A standardised process can provide a solution here too. The Crop report contains structured information on fruits and vegetable products addressing the cultivation, harvest and packaging activities. This information is either provided periodically by the grower to its sales channel, made available at the time of delivery to the customer, or can be requested during the period that the product is available for consumption. Different scenarios have been developed, with business transactions associated: • Communicate crop registration data; • Communicate crop history; • Request crop history.

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Market

 Focus on Cattle registration and movement data exchange and animal passport The objective of this project is to standardize Business Processes, Business Transactions and Information Entities of the technical description and information of the bovine livestock farming.

ANIMAL

Cattle Registration Information Exchange (CRIE) – (CCL 10A) Animal Life Record Fish Traceability (dispatch advice)(CCL10A)

CROPS

Crop Data Sheet (eDAPLOS) (CCL08A) Agronomical Observations Report

e-Certification

eCert Message (CCL08A) Implementation Guide

TRANSVERSE

Electronic Data Exchange Proxy (CCL10A) Electronic Data Interchange for laboratory analysis in agricultural and agrifood fields (in progress)

IV.2.1.2 GS1 GS1's main activity is the development of the GS1 System, a series of standards designed to improve the supply chain management. Much of the development is initiated by its Member Organisations (MOs). Every company may use the GS1 System in applying for membership and becoming a Member Organisation. Companies in countries where there is no MO can obtain their membership directly from GS1 Global Office. The GS1 System is an integrated system of global standards that provides for accurate identification and communication of information regarding products, assets, services and locations. It is the foundation of a wide range of efficiency-building supply chain applications and solutions. GS1 is a sectorial organisation of UN/CEFACT and participates in the PDA Supply Chain. In the food supply chain, GS1 is developing product identification for fruits and meet (porcine, bovine, chicken, ovine and turkey). A set of identification mechanisms for different purposes are defined:  GS1 Identification Keys with numbering schemas for products (Global Trade Item Number – GTIN;  Serial Shipping Container Code – SSCC;  Electronic Product Code – EPC;  locations and parties (Global Location Number);  assets (Global Returnable Assets Identifier or GRAI);  Global Product Classification standard (GPC).

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In the Dutch fresh food business, GS1 is working on the development of a coding for the various fresh vegetable products (GS1 Working Group: Frugicom, 2009). The third release of the GPC in fruit and vegetables was published in June 2012. This was also the month when the first publication of the GTIN Allocation Rules occurred (resulted from the cooperation of GS1 Germany, GS1 Netherlands and Frugicom). Many issues of EDI in the food supply chain are covered by GS1, such as product coding, tracking and tracing issues and electronics trade (invoice, payment). IV.2.1.3 Implementation of standards in the fruits and vegetables sector: GTIN for the business units, SSCC for the shipping units, GS1 bar codes and EDI. Traceability in an open system requires unique identifiers among the actors in the food supply chain. In the fresh fruits, vegetables and potatoes sector, whether base units or units of aggregation, the product is identified by a GTIN (or EAN/UCC-13 EAN/UCC- 14) including the CNUF of the brand owner or supplier, no matter if this code is symbolized or not by a bar code on the article. The traceability system also requires the recording of other identifiers needed to product tracking: the batch (or lot) number, and the SSCC (Serial Shipping Container Code). To ensure effective traceability, actors in the supply chain must also take into account the regulations in effect. The couple "GTIN - batch number" must be unique for each product batch. It will be associated with all the specific information of this lot. These data are selected according to the constraints and company objectives. These may be: • Batch numbers of products forming part of the batch output; • Packaging date; • Packaging line; • The production team; • The place of storage; • Temperature storage. About the management of batch number within the GS1 community, there are two rules to follow: • the batch number should always be associated with a GTIN to ensure its uniqueness in the supply chain; • if the batch number is marked with a barcode on the shipping or logistics units, it must be the same as the one clearly marked on the smallest unit of the pack (including consumer-packaged unit when it exists). Managing traceability is also recording successive links between products and/or product groups. Translation of data traceability in GS1 barcodes allows a quick, automatic and reliable check of shipped logistics units. If one of the actors in the chain does not manage these links between the upstream and the downstream, there will be some break in traceability.

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Thus, companies must implement GS1 standards that need GTIN for the business units, SSCC for shipping units, GS1 barcodes and EDI. IV.2.2 Specification work and B2B solutions IV.2.2.1 Existing Technical Solution  EDI EDI (electronic data interchange) is a way to exchange structured data, from computer to computer, between all partners whether they are independent or not (belonging to different subsidiaries of a group). The language which is used for these exchanges between computers could be defined as a set of assembled data by means of syntax. Regarding the communication, Value added networks (VANs) support EDI and guarantee its safety and its robustness. VANs are specialized networks for EDI. VANs work as a post office which manages mailboxes to send or to receive mail, dedicated to the different users. To guarantee confidentiality during deliveries, messages are put in an e-envelope. VANs use the X400 standard which plans all type of services expected from a bulletin board: acknowledgment of receipt or non-receipt, mailing lists, formats conversion, redirection, answers expectations, etc. The X400 standard allows networking between VANs which respect this standard. VANs are mostly sector specific but a company, which doesn’t use the prevailing network for its activity sector can also communicate with its partners via the networking. Currently, the principal VANs on the market are: - Transverse networks, independent of the activity sector of the users: ATLAS 400 (France Telecom), GEIS (General electric). - Sectorial networks like EDIPHARM for Healthcare sector or Allegro for distribution and DARVA for Insurances.

Figure 21: Illustration of VANs

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Currently, EDI is widely used at international level thanks to the recognition of EDIFACT as a standard. EDIFACT is a common core for all applications, independently of the concerned activity sector. After ten years of development and international standardization, EDI took off towards the end of 1990s. Now, companies seem to trust in it because of its reliability, strength and efficiency. EDI remains the most successful tool in terms of big information flows management. These flows belong to regular and structured exchange scenarios. Nevertheless, EDI implementation is heavy and expansive because of the investment (dedicated architecture) and exploitation responsibility (VAN payment). Consequently, EDI is a data exchange system above all reserved to big transactions, with big volumes and a sustainable business relationship between partners. For companies working with lower volumes, other ways to exchange data the same way as Web EDI exist and present several advantages.  Web EDI Web EDI corresponds to a “packaged” EDI solution which aim is to put in relation partners who work with a too low volume of exchanges and with contractors already equipped with EDI solutions. Web EDI is a good alternative for these companies because of its lower cost compared to EDI. Web EDI is based on EDI and web standards. For the contractor already equipped with an EDI station, flows incomers and outgoing flows will still be managed by the VAN(s) he uses with his partners. For his smallest suppliers, RVAs manage messages to Web EDI servers. The supplier equipment is constituted only of a computer, a modem and a web browser. The Web EDI server translates messages that arrive in EDIFACT language and allows users to consult, print and remove their information. On the other hand, this server translates outgoing messages (forms entry) in EDIFACT language to the contractors. Web EDI could be used for: - Product information or e-catalog updates - Orders - Logistics traceability - States of deliveries

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Figure 22: EDI and Web EDI exchanges

 XML (eXtended Markup Language) Among evolutions of techniques of the Internet, XML language is one of the most important for e-business. XML is a description language of complex community bases with interdata links. As their developed acronyms mean, SGML (Standard Generalized Markup Language), XML and HTML (Hyper Text Markup Language) belong to the same “Markup Language” family namely marking languages. XML was created to make up for HTML weaknesses with no need to resort to HTML difficulties. It’s a new syntax which arouses a big interest for its abilities to simplify electronic exchanges, particularly for applications destined for very small companies. One of the XML characteristics is to offer messages liable to be processed by a computer or readable by humans with a browser and unlike EDIFACT, XML allows synchronous exchanges. Thus, XML has the advantage to be particularly good adapted to applications of collaborative exchanges.  EbXML (Electonic Business using eXtensible Markup Language) EbXML was created to set up a global e-business infrastructure based on XML messages exchanges. This technology generated a new conception of standardization works with Core Components and Business Process definitions. Moreover, this way to exchange messages introduced a conception of interfaces between information systems. EbXML is an alternative to the universal standard and it should be less expensive than the EDI implementation. It allows companies to exchange secure data with their partners on the Internet. The objective of ebXML was to stop the development of sectorial XML initiatives and to facilitate a seamless communication between companies following the example of EDIFACT towards EDI.

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This approach was collectively managed by two international organisms, OASIS (Organisation for the Advancement of Structured Information Standards) and the UN/CEFACT (United Nations Centre for Trade Facilitation and Electronic Business). Currently, UN/CEFACT strategy dealing with ebXML is to:  Analyse and rationalize the Business Process  Develop neutral Core Components  Use current and future technologies to structure and transfer data The goal of all these actions is to propose adaptable standards for professional components which guarantee:  Independence towards software and materials  Intern and extern interoperability  Universality, upgradability and continuity OASIS is a not-for-profit consortium that drives the development, convergence and adoption of eBusiness standards in particular ebXML for the global information society. OASIS is mainly dedicated to the standardization of XML applications.

Figure 23: High level interview overview of the ebXML specification set functionality

 Market places A market place is an electronic business platform which aim is to connect buyers and sellers. There are two big families of market places: - Horizontal market places: dedicated to purchases of goods and services independently of the activity sector of the buyer (material, office supplies, journeys, some services providers, etc…) - Vertical market places: dedicated to purchases of goods and services in a given sector (automotive, energy, aeronautics, etc…)

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Market places are made of a set of technical tools and telecommunication solutions. These tools and solutions aim to process business operation (catalogs on-line publishing, purchases approval, call for tender management, payments, etc…) Market places use EDI and web techniques. Generally, two types of market places coexist: - Private market places (one-to-many) deployed only for the needs of one company - Public market places (many-to-many) which are open to buyers and sellers. From the point of view of electronic exchanges, those market places could be analysed as a new intermediary with whom the company should be able to communicate via electronic links. Communication between buyers and sellers with a market place requires exchanges of messages which use EDI or XML techniques.

Figure 24: Market places

 AS1 and AS2 (Applicability Statement): EDI on the Internet. AS1 and AS2 are two point-to-point communication protocols. They were created by the IETF (International Engineering Tasking Force) and sponsored by standardization organisms of the Distribution UUC (Uniform Code Council) and GCI (Global Commerce Initiative). The objectives of these protocols are to allow EDI and XML exchanges via the Internet as a supplement to traditional standards like SOAP. These two protocols guarantee the data confidentiality thanks to encryption, authentication via digital signature, integrity (data encoding) and non-rejection, because of an acknowledgment sent by the people who received the message. AS1 and AS2 are identical with the exception of the bulletin board protocol: SMTP for AS1 and HTTP for AS2. Before using AS1 or AS2, you must be sure that you have:  Access to the Internet  An AS1 or AS2 qualified browser  A SMTP or HTTP browser  An adapted firewall The use of AS protocols allows benefiting from interoperability, quickness, efficiency, security and saving money. It can also support big volumes and its implementation is quick. However, it

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involves a point-to-point exchange management with each partner with regard to VANs functions of EDI.

Retailer

Figure 25: AS functioning

The last figure of this part gathers the main technical solutions to automatic exchanges implementation and illustrates the global organisation of existing solutions for B2B communication.

Figure 26: Technical vision of B2B communication

IV.2.2.2 AgXML AgXML is a group of grain, processing companies and related entities, mainly located in the Unites States of America, developing standards and guidelines intended to bring eBusiness efficiencies to grain- and oilseed-related business processes. Its main mission is to develop standards for the efficient and effective communication of information electronically throughout the entire agribusiness supply chain.

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Between 2001 and 2009, several electronic business documents were defined in the form of XML schemas. The last XML versions were published in 2009 (freely available in their web site):  Bill of Lading;  Commodity Movement;  Contract;  Contract Pricing;  Quality Certificate;  Quality Certificates;  Settlement;  Weight Certificate. IV.2.2.3 AgroXML AgroXMLis an initiative leaded by KTBL (Kuratorium für Technik und Bauwesen in der Landwirtschaft e.V. = Association for Technology and Structures in Agriculture) in Germany, aiming to define a language for data exchange in the agriculture sector. Specifically, the XMLbased language allows farm management information systems to submit data to external partners (like food processors and agricultural service providers). AgroXML facilitates the exchange of data for farmers. Currently, a large number of individual interfaces exist between the operating computer of the farmer and the recipients (authorities, trade, bundling). AgroXML is a software standard, which enables the communication of programmes of all involved actors. In the other direction, data about operating supplies like fertilizers or pesticides can be made available to the farmer by their respective suppliers (Doluschitz & al., 2005). The initiative is mainly composed by agriculture-related organisations in Germany. The underlying data model covers processes in agricultural production from the point of view of the farm management information system. AgroXML Version 1.5 (2010) is their latest specification and includes the following:  A set of common XSD element definitions covering the following main entities: o Farm; o Field; o Cultivation; o Work Process; o Weather Station; o Soil Analysis.  A set of XSD profile elements, making use of the previous common XSD elements, and allowing farmers to create the following types of document: o FloRLP; o ISIP-Cereals; o ISIP-Potato; o Hail Insurance. IV.2.2.4 FoodXML FoodXML was developed as a universal exchange format for product specifications of food (www.foodxml.de). Every food stakeholder needs product specifications of its commodities.

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These provide information on labelling requirements, additives, nutritional information, allergens and other criteria. The majority of companies use pdf product specifications in the business exchange. This poses a big disadvantage because all information needs to be typed manually for processing in the ICT system. FoodXML exchange is a machine-readable format and is thus quite naturally processed by companies. The base is the mark-up language XML, which is used as a standard for representing hierarchically structured data in the form of text data for the platformindependent exchange of data between computer systems. The exchange is based on a commodity database. There are currently over 1800 commodities (including 99% mono-component) included, but the list is constantly growing. Among the entries the company may find all additives in all European languages as well as the first attributes to it (explanation, effect, etc.). The following structural characteristics are specified in the commodity database: multilingual labels, multilingual definable description fields, if possible E-number and permitted additive classed, information about the necessary identification and their legal foundations (by region and time period), optional link to the Federal Food Key of Germany, some additional attributes such as bio-compatible, GME, ADI and animal origin. IV.2.2.5 WeihenStephan Standard The Weihenstephan Standards (WS) define a universal communication interface for the connecting machines to higher ranking data acquisition systems or MES (Manufacturing Execution systems) (Figure 27). They also define the data which must be provided for acquisition. Data points and contents are defined for individual industrial sectors. Up to now libraries for bottling and packaging plants (WS Pack) and machines for food processing (WS Food) have been performed. WS Food has benefits for food manufacturers. These benefits include the solid data basis, future-proof communication technology, test tools for easy testing of interfaces, reliable and comparable information, and cost-savings due to the lack of need for individual engineering (VDMA, 2011).

Figure 27: Machine communication via Weihenstephan Standards

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Communication via a plug and play principle is made possible by automated parameterization via a device description file. Moreover, the Weihenstephan Standards give recommendations for the data evaluation (e.g., traceability, calculation of efficiency identification numbers, technical reporting) and for the approval and the safe operation of MES implementations. IV.2.2.6 iTradeNetwork iTradeNetwork operates the largest trading network for food & beverages worldwide with a combined trading volume of more than 250 billion USD and 6.500 trading partners in 2011. The customers can be split in four categories: • Grocery retailers or buying alliances for grocery retailers who deal with the most complex supply chain when it comes to buying fruits, vegetables, flowers, plants, meat, fish, dairy or bakery products. • Suppliers of the grocery retailers reaching from smaller producers to multi-national companies who face a similar challenge on their supply side for fresh products. • Operators of hotels, restaurant or bars who want to allow their locations to have a streamlined, central, online procurement process to order food & beverages. • Brand Owners of food & beverages who want to open up an online marketing & sales channel to their large customers in a business to business relationship. iTradeNetwork has successfully served these customers for more than 10 years now and allows them to overcome the complexities of the food & beverage supply chain through realtime-collaboration based on a cloud-platform powered by iTradeNetwork. A potential future collaborative process in a real end-2-end communication enables all partners in the fresh supply chain to participate online in a workflow that spans the whole procurement and logistics process (Figure 28). This gives everybody real‐time information as needed and full transparency. The result is a less manual interaction and a higher level of automation. Participating individuals only need to manage exceptions instead of dealing with every single piece of information. This also drives automatic invoice matching rates to over 98% in reality. These examples are limited to their activity domain and forbidden to export. In fact, the components are not compatible and the technical structure of these components is not standardised: increasing cost, impossible interfacing software applications.

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Figure 28: Potential future collaborative process (iTradeNetwork, 2012)

Existing ICT standards, specifications, and B2B solutions: key issues Existing standards The United Nations Organisation UN/CEFACT develops Trade Facilitation Recommendations and Electronic Business Standards. Their work leaded to the creation of an international electronic business standard: UN/EDIFACT. They also provide Core Component Library (CCL) of business information entities, which are re-usable components for the electronic message development. One example of the use of standards is the eDAPLOS message. This is a standardised Crop Data Sheet message based on the UN/EDIFACT standard. It aims to facilitate the transmission of information from the field and addressing all vegetable cultures. It is currently used in the French cereals sector, and has been developed in the Netherlands through the Cultivation message. GS1, a sectorial organisation for supply chain member of the UN/CEFACT provides product coding, EDI and XML messages and traceability solutions. Notably, they develop a coding for the various fresh vegetables products in the Netherlands. Finally, they work on traceability in the fruits and vegetables sector with GTIN for the business units, SSCC for the shipping units, GS1bar codes and EDI. Existing solutions Different technical solutions actually exist. The most used is EDI which consist on exchanging structured data from computer to computer through a value added network. An alternative to EDI is WebEDI, with a low cost but requiring

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human interaction, based on both EDI and Http and Html web standards. An important message format currently used is XML, which allows synchronous exchanges and is particularly good adapted to applications of collaborative exchanges. An alternative to the universal standard is ebXML, a global e-business infrastructure based on XML messages exchanges and which allows the secure exchange of data on the Internet. Besides, the AS1 and AS2 protocols based on SMTP and HTTP respectively, allow EDI and XML exchanges via the Internet benefiting from interoperability, quickness, efficiency and security. Finally, the electronic marketplaces are electronic business platforms aiming to connect buyers and sellers through the Internet, and can be either horizontal or vertical marketplaces. Examples of applications of these technical solutions, such as AgroXML, Food XML or iTradeNetwork are interesting for the eFoodChain project. This attests that existing standards and technical solutions can be used to enhance B2B transactions. Yet, the importance of the global market now forces the development of cross-borders compatible solutions, which should be based on international standards.

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V.

Analysis

V.1 Overview of expectations related to ICT: survey and interview analysis The rate of adoption and actual use of ICT solutions among companies surveyed has been presented in the section “current situation�. The questionnaire also included questions on expectations and projects that companies would have in relation to Information and Communications Technologies. Moreover, the questionnaire concluded with two questions on the promoters of digital supply chains, in a general way. V.1.1 Expectations in the ICT development Even though a majority of companies already use ICT solutions in their business transactions, most of them consider that they would benefit from an even stronger integration with their customers and suppliers: handling less paper-based documents in business transactions is wished by 55% of companies. Yet, depending on the sector and the position in the value chain, some differences should be noted. Consistently with the low use of ICT in the Dairy industry, there is a low interest in stronger integration in this sector (Figure 29): only half of the companies are interested, compared with almost all companies from the cereals industry and more than 80% in the fruits and vegetables value chain. This apparent lack of interest in the dairy sector as to do with the fact that almost 90% of business messages are already transferred through EDI at the stage of distribution in the dairy sector and, although almost nothing is done upstream, the perceived benefits of further integration is reduced.

Figure 29: Interest of companies in having a stronger integration

Within the value chain, distributors and logistics services providers are the most interested, while producers are clearly the least interested. Moreover, the larger the enterprise, the greater wish for stronger integration is pronounced (Table 21).

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Table 21: Interest of different sized-companies in a stronger integration

Size of company (number of employees)

1-50 51-100 101-500 >500

Wish to have a stronger integration % of companies 69% 85% 89% 100%

Of course, not all messages are considered as important to be exchanged electronically. To the question “Please, select the 5 business messages that you consider the most important to be exchanged electronically with your business partners”, three messages have been often quoted by the companies surveyed:  orders;  invoices;  catalogue or product information. Orders and invoices are clearly the two messages considered as the most important to be exchanged electronically, as they have been quoted by almost half of respondents (Figure 30). On the other hand, information related to delivery seems less important to be exchanged electronically: less than 20% of companies have quoted them.

Figure 30: Messages considered as the most important for the automatic exchange of data

This trend is perhaps in relation with changes in legislations in many countries and in Europe to regulate e-invoicing. In Europe, the second Directive on VAT invoicing was adopted on the 13th July 2010 and its provisions shall be applied by Member States as from the 1st January 2013. Until now, there was an unequal treatment within different member states, as electronic invoicing was previously prohibited or had to be accompanied by the parallel transmission of paper invoices in some countries, whereas in others it was permitted subject to varying conditions. Firms established in several Member States required therefore special authorizations in certain countries to apply cross-border invoicing arrangements and had to use a technology specific to each Member State for the creation, transmission and storage of

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the electronic invoices. They also had to cope with recording different items of information for each country, storing information for a different period in each country and sometimes even making simultaneous electronic and paper transmissions of data. So, the aim of the proposal is to increase the use of electronic invoicing, reduce burdens on business, support small and medium sized enterprises (SMEs) and help Member States to tackle fraud. The proposal simplifies, modernises and harmonises the VAT invoicing rules. In particular, it eliminates the current barriers to e-invoicing in the VAT Directive by treating paper and electronic invoices equally. Considering what was mentioned, it is interesting to know if the messages considered as important to be exchanged electronically are different whether companies already use electronic exchange of data or not (Figure 31). In general, companies not using ICT have noted fewer messages important to be exchanged electronically. The difference is especially important for orders and invoices, important for a majority of user companies and clearly not as much important for non-user companies. Moreover, companies not using ICT have stressed one different message which is traceability. For companies that are not currently using ICT solutions it is obvious that messages that demand a higher degree of information integration and storage (like for example traceability) rank higher in importance.

Figure 31: Opinion on messages to be exchanged electronically depending on the use or not of ICT

Many companies agree on the interest of improving the quality of services by developing the automatic exchange of data (Figure 32). These companies have identified two other main benefits in the use of automatic exchange of data: reduction of the length of business cycles and reduction of manual entries in order to save time and money. These three benefits are particularly important for big companies (more than 500 employees), as nearly 80% of them wish to improve their quality of services, compared to 30% of small-sized companies.

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Figure 32: Identified benefits of the automatic exchange of data

Among these benefits, some are rarely quoted. Two of them are only noted by small-sized companies (less than 50 employees): diversify activity and expand local market. V.1.2 Projects and problems encountered in relation with ICT In general, companies are aware of the importance of investing in ICT: almost half of them declare having one or more projects related to ICT, and particularly in the cereal sector (Table 22). Table 22: Number of companies with projects depending on the sector

Fruits and Vegetables % of companies of the 38% sector

Cereals

Dairy products TOTAL

55%

43%

41%

Many different types of projects have been noted by the surveyed companies. They can be classified into five main categories:  Products identification and traceability: electronic catalogue and traceability are the project related, but also RFID, as it can be planned in order to develop traceability.  Business transactions: projects of e-invoicing are the most common, but in this category can be found projects of e-procurement, EDI and Web EDI.  Enterprise and client relation management: the implementation of a CRM is the most quoted project of this category, before EAI, call for tender digitalization or purchasing card.  Technical aspects of communication: This category wasn’t really quoted by the companies surveyed, very few companies are planning to develop Web XML and AS2 protocol, but none of them are planning AS1 or AS3 protocols.  Standardisation: This refers to the UN/CEFACT core component, very rarely noted as a project for the next 18 months. In general, the most common project is the implementation or update of traceability (Table 23). This project is clearly more common in the cereal sector and less common in the dairy sector (Annex 15). Then, projects of e-invoicing are often quoted by companies from all

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sectors, which is consistent with the opinion on messages most important to be exchanged electronically. Table 23: Types of projects

CATEGORY Products identification and traceability

Business transactions

Enterprise and client relation management

Technical aspects of communication

Standardisation

% of companies

PROJECT Traceability Electronic catalogue RFID E-invoicing E-procurement EDI Web EDI Electronic marketplace Customer Relationship Management (CRM) Enterprise Application Integration (EAI) Call for tenders digitalization Purchasing card Web XML AS2 Protocol AS1 Protocol AS3 Protocol

22% 8% 3% 18% 8% 8% 5% 5% 12% 4% 4% 2% 2% 1% 0% 0%

UN CEFACT Core components

1%

It is interesting to note that companies not using automatic exchange of data have fewer projects than companies already using those technologies. Only 30% of them have on-going projects, compared with nearly 50% of companies already using automatic exchange of data. For example, only 14% of companies without any ICT solutions plan to implement an electronic traceability system. Regarding these projects implementation, different barriers have been stressed by companies (Figure 33). The problems of insufficiency of customers and standardization of exchange are clearly the most important.

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Figure 33: Problems encountered by companies for their projects implementation

Some differences appear between sectors. The financial cost is an important barrier in the fruits and vegetables and the dairy sectors (Table 24) while only few of cereals companies have quoted it (23%). In the Fruits and Vegetable sector, the financial issue is a problem for almost half of the companies. Moreover, the resistance to organisation changes is quite an important barrier for a third of companies. Small-sized companies stress specific problems: insufficiency of potential customers and cost of financial investment. These two barriers are more important than any technical problem in the opinion of small companies. Table 24: Three main problems encountered with projects, for each sector

Fruits and Vegetables Development time 41% Standardization of 39% exchanges Financial investment 42% costs

Cereals Potential customers still insufficient Standardization of exchanges Resistance to organisation changes

63% 58% 45%

Dairy investment 43%

Financial costs Lack of equipment 30% from partners Potential customers 30% still insufficient

To complete this overview of problems encountered, reflections coming from the surveyed Cooperatives and Producer Groups must be noted:  Problems of skills Especially insufficient knowledgeable resources and lack of skills have been stressed by many companies in different countries (the Netherlands, Greece, Spain and Portugal). Moreover, some companies noted the problem of affordability and absence of fibre network, particularly in Greece, but also in France companies noted the barrier related to the development of the internet in rural areas.  Problems of standards The use of standards is still an important barrier. On one hand, there are too less traders using standards, on the other hand, there are different uses of standards with different customers. Dutch companies explained that this is specifically the case with customers outside the Netherlands.

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Moreover, the use of different solutions for basic identifications is made within different standards. In general, companies stressed problems of international and intersectorial standardization, and problems of codification.  Cultural barriers Cultural barriers have been invoked by both Portuguese and Spanish companies. They insisted on the insufficient sensibility and the lack of recognition of potential benefits by companies of the agro food sector. These cultural barriers are mainly related to the producer level of the value chain. Technological “delay” and resistance to technology among small players at the beginning of the value chain is very important in Portugal and in Spain (small producers, who are still dominant). In those two countries specifically, there are relatively low rates of collaboration among agricultural producers. Moreover, fears and resistance to organisation changes, legal and tax complexities still remain in many countries. In Germany, this is related to problems of differences in data protection rules and documentation requirements.  Financial barriers The financial issue is all the more important as most companies are SMEs. So, there is a real lack of investment capacity among many actors and a lack of critical mass to justify an investment in electronic data exchanges, as Portuguese companies explained. Moreover, ICT Specialist companies provided us some complementary thoughts about barriers to the ICT development. About standards, these specialists stressed the lack of standardization rules. They explained that standards are already available, but the difficulty is to accept and use them. This might be related to the problems of data quality stressed by some Dutch specialists. The lack of knowledge, expertise and skills is effectively a recognized problem in the agro food sector. The economic situation, where a lot of SME’s don’t have the financial possibilities to set the next step to SCM (supply chain management) shall not be ignored. Finally, the actual functioning of the supply chain is considered as a barrier by some experts. In fact, they describe a lack of collaboration in the supply chain and between solution providers, and problems of visibility and cooperation between customers and suppliers. V.1.3 General opinion on ICT development promoters Through the two last questions of the survey, we tried to know the opinions of companies on promoters of digital supply chains, with a difference between exogenous and endogenous factors. The role of partners in the development of ICT technology is clearly the most important (Table 25). Whether asking about exogenous or endogenous factors promoting digital supply chain growth, partners appear as the most important factor: to provide a good service to the partner or to fulfil the partners’ requests. As an exogenous factor, the optimization of the processes in the supply chain is another promoter, also related to the partner’s communication.

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Table 25: Promoter to the digital supply chain growth

% of companies agreeing 21% 20% 17% 17% 10% 10% 9% 8% 7% 30% 17% 13% 13%

Type of promoter

Endogenous factors*

Exogenous factors*

Business partner-driven demand Optimization of the processes in the supply chain Internet development Network effect of user companies Increase of telecommunication networks use Influence of various standardization organisations Political support Increased technological performances Decrease of telecommunication costs Offer new/better services to business partners Strategic importance of e-commerce in the company Increasing international awareness and uptake Too much diversification of integration solutions in the company *Exogenous factors are related to the market, the policies, the society evolution, etc‌ while endogenous factors are related to the company itself. Moreover, the agro-food companies surveyed confirm the importance of the network effect. In particular, different actors stressed the importance of promoting the implementation of ICT solutions all along the value chain, and specifically at the producer level. The role of cooperatives is crucial there, but also some proactive policies allowing knowledge and financial support are asked by the producers surveyed. V.1.4 Main challenges to resolve according to the companies surveyed The Experts surveyes were both producer groups and ICT solution providers. They have stressed some important challenges to resolve. First of all, some existing systems need to be developed, and there is a need in harmonized solutions. Companies agree on the importance of consolidating existing exchanges for business. Some companies insisted to not only focus on standardization of messages but also on standardization of business processes. In fact, the modernization of business procedures requires additional efforts in particular in ERP systems. Moreover, VMI (Vendor Managed Inventory) is currently in development and it is interesting according to some Dutch companies. These companies also mentioned the importance of rolling out SSCC labels (logistics unit code: Serial Shipping Container Code) and DESADV messages (Despatch Advice, EDIFACT) to all Dutch & International clients (Dutch retailers ask traders & Producer Groups to implement these GS1 standards). So, one major challenge is data integration and standardization (ideally one standard), and thereby simplification of the overall “package and processâ€?.

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In a general way, French companies insisted on the importance of keeping on developing and harmonizing technical references through the coordination or participation in dedicated working groups. Finally, there is a need in the interfaces and links to connect all standards in a more efficient system. In the Fruits and vegetables sector, the Dutch companies mentioned the importance of specific Fresh Fruits & Vegetables Messaging (eLab Residuals, Cultivation). More globally, in the food sector, ICT should be used for the traceability of products, and services for food safety and quality might be developed accordingly. As the whole supply chain is studied and targeted, one major challenge is the establishment of standardised exchanges in the upstream of agriculture and food sector, at the level of primary production. There is a real need of modernization of technological base among small agro-food actors in such countries as Portugal, Spain or Greece. Moreover, one point to keep in mind is the simplicity for end-users, the relatively low cost and the clear information to provide. The support for implementation and the cultural and administrative settings are another central point noted by the companies surveyed. The highlight of the study is to have more (and simplified) integration between various SMEs and thereby lowering cost and turnaround of doing business.

Expectations from ICT: key issues In general, companies are aware of the importance of developing ICT and wish to have a stronger integration. The development of ICT is clearly dependent of the business partners demand, clients or suppliers. Lots of the companies have on-going projects, and companies already using such technologies tend to have more projects. The business messages as orders and invoices appear as the most important to exchange electronically. Yet, the majority of the projects are related to traceability, probably because of the changes in national and European legislation. The problems encountered could be classified into four main categories, related to skills or knowledgeable resources, cultural barriers, standard problems and financial issues. Globally, the challenges that the eFoodChain project should resolve are related to the standardisation and interoperability of standards. If companies wish to develop and to invest in such technologies in order to facilitate business along the value chain in a global market, it shouldn’t be forgotten that the financial cost and the affordability of solutions are key issues.

V.1.5 Challenges, drivers and potential solutions according to the workshop participants As mentioned previously, the eFoodChain workshop hosted by the European Commission on the 9th of July 2012 was an additional opportunity to consult relevant stakeholders and experts and validate with them the findings obtained from other sources.

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Based on the outcomes of desk research, survey and interviews, the overall list of Challenges (challenges for wider adoption of ICT solutions, in particular the future eFoodChain framework; representing in a sense problems and barriers faced by agro-food companies) was presented for validation by the workshop participants (who had an opportunity to ‘vote’ on the importance of each of them or include additional challenges if necessary). As the results, the final list of Challenges, in order of importance, looks as follows:

CHALLENGES Affordability of the solutions Incompatibility of existing standards; interoperability Full integration of various areas Develop ICT from upstream of the value chain Business messages and traceability Simplicity and ease of use* Resistance to change; cultural and age related barriers Establishing a business case as a driver for adoption of framework* Lack of understanding* *Challenges added by the workshop participants.

Similarly, also the Drivers for usage of ICT solutions were presented for validation, and based on the experts opinion the final list of Drivers (motivations for the adoption of ICT solutions, and perception of the impact that this might have), in order of importance, is the following:

DRIVERS Save time and resources Easier, more reliable and quicker exchange and sharing of information Improve quality of services (less errors) Harmonisation of legal data protection requirements Extend potential business partners’ base (longer term outlook) Consumer demands* Customer demands* *Drivers added by workshop participants.

The overall results of the conducted Market Analysis allowed the consortium to propose during the workshop some potential Solutions (goals / areas within the functioning agro-food value chains that could be solved by the framework of other ICT solutions) to the identified challenges and bearing in mind the crucial drivers. Due to their high-level expertise, the feedback from the workshop participants (representing various sectors and value chain positions within the European agro-food industry) was very much appreciated and therefore also the Solutions were subject to their judgment. In this case not only the importance, but also the potential complexity of each solution were ranked. The participants have not suggested any additional solution(s), and their appreciation of the proposed ones was the following:

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SOLUTIONS

Rank of Rank of importance complexity

Purchase to pay (e-invoicing; integrating farmers; B2B)

1

Food safety (traceability; B2B, B2G and B2C)

2*

1

Sustainable production and products (future need)

2*

2

Logistics messages (tracking and optimising delivery; B2B)

3

Production/Produce Certification (B2B and B2G)

3

Lab testing and quality results (B2B and B2G) In this case the potential solutions have not been analysed in terms of applicability for the specific sectors or positions within the value chain, therefore this general ranking is only indicative and more detailed analysis is necessary before definitive conclusions can be reached.

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V.2 Major challenges among the existing ICT solutions and systems V.2.1 Interoperability Challenges In general, EDI is well developed and well used for all business messages, within the three sectors, even though some differences in the wish to develop ICT solutions still remain. For example, in the dairy industry, the rate of ICT adoption depends on the country (well adopted in Germany whereas it’s not the case in other European country like France or Portugal) but there is also a difference regarding the place in the supply chain because big retailers have a high degree of ICT use, whereas the smallest companies as farmers haven’t. One of the main challenges related to the improvement of communication between partners of a supply chain by using ICT is to work on the harmonization of exchanged messages independently of the country, the activity sector or the position in the supply chain. So, data integration and standardization (ideally one standard) and thereby the simplification of the overall “package and process” is one of the eFoodChain main priorities. Traceability, products or services certification, sustainability and e-invoicing are some of the main relevant topics concerned by standards which have been identified thanks to the numerous interviews and responses to the survey complemented with the knowledge of many experts involved in the study who have a high knowledge of the agro-food supply chain. Another big challenge of this project is to involve SMEs, in the digital food supply chain by promoting standardised and affordable solutions, especially in the upstream. In fact, the involvement of farmers or small processors is essential to have a complete integration of data for traceability for example, and they could benefit from new services to facilitate their farm management. V.2.1.1 Harmonization At the moment, many different standards already exist, but still few actors do really use them. Therefore, problems related to the harmonization and interoperability still remain, and are one of the main barriers to the integration of agro-food SMEs. Simpler and more affordable solutions are needed in order to give SMEs full access to digital supply chains. Some existing systems need to be further developed. Companies agree on the importance of consolidating existing exchanges for business. It is important to not only focus on the standardization of messages but also on the standardization of business processes. Although in recent years standards have been adopted, there are still mostly proprietary solutions enforced by major players in the supply chain. V.2.1.2 Traceability across the Supply Chain Implementing a traceability system within a supply chain requires all parties’ involvement to link systematically the physical products flows with the associated information flow. This requires a holistic view of the supply chain, which would be best reached by deploying a common business language: data standardization is crucial for end-to-end traceability. While businesses recognize the business benefits of traceability, they do not want to multiply potentially conflicting traceability standards and systems, and to increase costs unnecessarily.

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Businesses also recognize that an individual company constitute only one partner in a supply chain, and that chain reliability is all the stronger as the links between partners are narrow: from the producer to the final retailer. In case of a sanitary crisis for example, it’s quite important to be able to go back up traceability of agro products since the production to identify where and what was the problem (plots inputs, lack in quality, hygiene or safety).In terms of legal point of view, many companies use traceability information to get free of any responsibility in case of crisis. To satisfy all, the ultimate aim is to create a new traceability system with a level of detail based on the users’ needs in terms of transferred information and costs. To sum up, businesses want a traceability system adapted to every stakeholder of the supply chain and their needs, but also something they can easily adopt. V.2.2 E-invoicing Today, company performances are mostly based on its capacities to exchange information, to integrate them and to exploit them before making decisions. By providing speed, fluidity and traceability, the electronic business-to-business commerce matches this need. Of course, invoice is one of the major steps in a business process. Besides, following the "order form" message (ORDERS), the "invoice" message (INVOIC) was the second to be normalized by international experts. Twenty years ago, companies started to become aware of the practical and financial interest to implement a data dematerialization policy, in particular for invoices. Invoice is one of the most important documents in the business relations. It is subjected to various accounting, fiscal, commercial or even linguistic regulations. The heart of these regulations is connected to legislation on the value-added tax (VAT). From a fiscal point of view, the invoice has three functions:  to contain information relative to the applicable VAT regime;  to allow tax authorities to exercise her control;  when necessary, to justify its deduction law for the customer. Invoicing is subjected to many rules from a member state of the European Union to another one: from a strict legal framework to a big flexibility. Thus, at the end of December 1998, the Commission launched a study relative to conditions imposed about VAT in invoicing. Following this study, the directive 2001/115 EC Council enclosure 1 of December 20th, 2001 was published to simplify, modernize and harmonize the conditions imposed for VAT in invoicing by the directive 77 / 388 / EEC. All the member states had until January 1st, 2004 to transpose this directive into internal law. So, the new rules of the European directive 2001 / 115 / CE imply:  an harmonized list of mandatory mentions;  simplified measures for small companies or small invoices;  the acceptance of the dematerialized invoice by member states fiscal authorities, without any notification or prior authorization, provided that authenticity of origin and data integrity are guaranteed, either by means of electronic signatures, or by using EDI. Member states can also accept other methods to insure authenticity and integrity on their own territory.

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Given that, invoice is one of the major steps in a business process, it’s very interesting for companies to dematerialize it because it was demonstrated that electronic exchanges allow gain of productivity and cost (Table 26) fluidity, time and data reliability. Table 26: Electronic exchange allows cost reduction

Supports Mail Phone/fax Computer to computer

Periods A day A minute A second

Costs 0.30 € 0.60 € 0.10 €

This theme will be more developed and costs precisely quantified in the WP3 about the framework. Of course, many partners from different sectors and different countries have to exchange such data thus it’s strongly recommended to establish standards for e-invoicing exchanges. V.2.3 Certification The certification is relevant in two cases: food safety and organic food. First, certification of processes is a guarantee of the quality, hygiene and safety of food, but it also allows insuring a superior quality to the customer with regard to non-certified products. Moreover, certification bring added value to products, so it could be managed as a real business benefit by the company which certify its products. Those kinds of certifications are more and more asked by customers of the agro food industry as they want those guarantees when they buy organic food. At the level of the European Union, the legal framework on the organic food and farming articulates around the regulation (EC) n° 834/2007 of the Council and its application regulations, the regulations (EC) n° 889/2008 and (EC) n° 1235/2008 of the Commission. In a recent report of the 11th of May, 2012, “the European Commission recognizes […] that it’s necessary to clarify the situation concerning the possible certification of these products according to the regulation when they were produced by respecting the requirements fixed in this regulation”. By the way, some forged certificates of organic products have been intercepted in Italy recently. Today, there is a very bad surveillance of the certification companies by the Commission and it has a very bad vision of European flows whether they are intra and inter country. The idea is to go towards an electronic control certificate. So, one way to insure the certification reliability is to dematerialize the certificates and associated exchanges to get a real time centralized management by the member states of these certificates. Some works on this subject have been done with the e-cert project (cf. relevant report or studies) but at the moment, it’s only at national level for several European countries. Standardization at the European level is recommended to allow more interoperability in certification between partners and across borders. V.2.4 Environmental impact Given that currently “environment” is in the centre of concerns (e.g. carbon assessment), we have to pay attention to this. Some companies would like to implement an “environmental label” to assess the environmental impact of the manufacturing processes of products. To go

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further, a company which is a national leader in the dairy products sector wants to implement an environmental impact diagnosis at the level of production farms. These data are dedicated to be exchanged between partners (business, administration, etc.) and across borders with big volumes because it concerns a lot of information (approximately 30 evaluation criteria estimated). Considering these requirements, electronic exchanges seems to be the better to provide a reliable service and to have a global vision of the environmental impact of food products and processes. V.2.5 SMEs integration Considering the gap existing along the value chain in terms of use of ICT solutions and the different capacity to promote the use of new solutions, due to the unbalance in size and representativeness already referred, one major challenge is the establishment of standardised exchanges in the upstream of agriculture and food sector, at the level of primary production. There is a real need of modernization of technological base among small agro-food actors in such countries as Portugal, Spain or Greece. Easy to use and affordable solutions are needed. Cultural barriers (some of the age-related) are an important issue and it is crucial to demonstrate all types of benefits of this integration, not only focusing on cost reductions.

V.2.6 Relevant reports or studies V.2.6.1 eCert Project The purpose of this project is to provide a standard framework for the exchange of information for traded agricultural products between government regulators involved in cross border trade, where export certification is required to facilitate the entry of products into a country. This message transforms the government to government (G2G) electronic certification business requirements elaborated in the associated BRS document into a technical requirement specification model for the XML based message structure and data components suitable for use by developers in the building of eCert compatible systems. It does not aim to specify the component model, system design or presentation standards as these will vary with each unique developer requirement and are incidental to the transmitted message and data processing functions. This standard adopts an XML based solution and uses published UN/CEFACT core components where possible. Required components that are not in the core component library are noted and submitted in this document for consideration and integration into the UN/CEFACT Registry. V.2.6.2 eDAPLOS Project Demand for traceability implies that farmers are able to register data in the same manner despite the variety of software used for management purposes or the way in which products are sold. The objectives of this document are: • Harmonization of the definitions of the technical data in order;

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Development of consensual data dictionaries which could be used as a basis for all the steps of traceability; • Installation of a standardised Crop Data Sheet message to facilitate the transmission of information from the field for all vegetable cultures. DAPLOS is an EDIFACT message present in the UN/CEFACT Directory D.05B. DAPLOS message describes the data crop sheet exchanged between farmers and their partners. The majority of the farms are Small and Medium Enterprise (SME) and then, the use of XML/ UN CEFACT format should be the best way to increase the electronic data interchange. Today, in France, more than 5000 farms are sending their crop information to their economic partners (cooperatives, stock maker and food industry). V.2.6.3 Agronomical Observation Report Nowadays, many kinds of networks are doing crop observations in order to provide wider view advices about crop pests and diseases to the farmers. By dealing with the complexity of the crop production, these reports are generating a huge amount of data in many formats which could be standardised. The European regulation requires the members States to set up a network of epidemiological monitoring of crops, in order to improve the advice to the farmers and to prevent the massive use of pesticides. The aims are: • To monitor the crops in place in order to detect early insects, pests and/or diseases that may have a negative impact on harvested produce; • To provide more accurate advice to the farmers; • To reduce chemical crop inputs (to cut costs and to reduce the environmental print). The message «agronomical observation report » is used to transfer raw data from the field to any kind of parties (Ministry of agriculture, Private companies etc.) This UN/CEFACT message has been built following the French project named EPIPHYT. V.2.6.4 French Governmental Project: EPIPHYT (ECOPHYTO2018) A measure was launched in 2008 and was integrated to the « Ecophyto 2012 » government plan, which aim is to reduce the use of pesticides by 50% within 10 years. It was implemented by the Ministry of Agriculture in collaboration with business partners, within the framework of observation networks that covers the whole territory and its farming industries. The objective is the biological and epidemiological monitoring of the territory with publication of the vegetal health Bulletin which represents: • more than 8000 observed plots; • more than 2700 observers on site; • more than 1500 published vegetal health Bulletins. EPIPHYT is a Data Base dedicated to epidemiological surveillance. The main principles are:

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• •

implementation of a national database aiming to collect observation data on harmful organisms and parasites; aggregation of all observations made within the framework of the epidemiological surveillance by observation networks, no matter which information system is used for the observation capture ; 2012: 10 different SI connected: Viticulture / VgObs / Latitude / Afidol / Gaïa / Epicure / Agriobs / Campanet / Outil CA 82 / Phytozéro.

Regarding the interoperability between SI, the system is based on an exchange message of observation data (AgroObs) and data base dictionaries shared by all systems. Messages and data dictionaries are done by the « Observation » workgroup hosted by Agro EDI Europe. The main data dictionaries are: • farming/qualifier/destination/organ/vegetative profile; • living organisms/category/sub-category/stage of development; • BBCH stage of growth; • protocols of observation. Regarding the EDI System, it’s described in the next figure (Figure 34) and based upon: - A standardised AgroObs message (implementation of XSDs); - Referential shared by SI; - Dedicated EDI platform on which the following can be found: the whole technical documentation; downloading of shared referentials; test of messages; Application Program Interfaces. - Adapted governance which allows the system to evolve with the collaboration of all actors.

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Figure 34: EPIPHYT functioning

Major challenges: key issues Besides the challenges stressed through survey and interviews, some issues need to be specially focused in the eFoodChain project. Harmonization is one of the key elements, and any solution proposed will have to take into account the interoperability among countries, sectors and within the whole value chain and traceability. E-invoicing is another main challenge which appears in the analysis. Companies agree that it is one of the most important messages to exchange electronically, and dematerialized invoice is now accepted by all member states fiscal authorities, without any notification or prior authorization. Still in relation with regulations update, certification can be presented as one of the challenges of the supply chain, as traceability is mandatory. Finally, SMEs integration is in the centre of concerns of the eFoodChain project, because of its high representation in the agro food sector, but also because of the low level of ICT adoption by small companies.

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VI.

Future outlook

The three studied sectors, as any other business sector, are permanently interacting with various different actors and sectors. Value chains include not only producers and retailers, but also processors, logistics services providers, and suppliers of services, equipment, technology, etc. Communication has to be the more seamless as possible for all partners of the value chain, inside one country and across borders to keep SMEs competitive in the global market. EDI (retailers) and portal integration (suppliers) solutions are numerous. These various standardised communication protocols i.e. with custom solutions, are a result from implementing more and more processes in-house. More integration is needed but thereby it should allow staying flexible and mobile. There is presently a real interest for applications for mobility: requests, orders, confirmation of deliveries, invoices etc. to be used in hand-held devices. The information exchange between growers and processors can be improved by making use of Portals and Mobile devices which make the data recording, data exchange and data capturing in the ERP system much more efficient/effective. Data integration into the company’s own systems is also gaining importance In fact, data integration into ERP is getting more and more important. Besides, further optimization of logistics processes through better data exchanges is crucial for some companies. Efficiency gains and simplification of certification processes (so frequent in agro-food industry) would be another much appreciated added value by companies. Further standardisation, information requirements and automatic information flows will simplify and reduce the cost of numerous business processes, improving and the quality of services and reducing errors at the same time. Moreover, it is necessary to enhance trust in the food supply chain among all stakeholders for the electronic data exchange. Trust is the basis for more efficient cooperation and business operation. Another important issue is the definition of wording along the food supply chain (e.g. sustainability). Only if we understand the same content in the needs and issues of the food chain we may facilitate the electronic data exchange. And last but not least the politicians shall harmonize the requirements for the documentation which is needed for the data protection within the EU. But the “confidentiality fears� of companies should be kept in mind. This section gives an overview of possible evolution scenarios of the agro-food industry, especially in the sectors on which this project is focused. It starts with a foresight of business scenarios, mainly based on the expected results from ongoing RTD projects at national and European level, and concludes with an analysis on the possible impact of an higher adoption of ICT for B2B transactions in the market dynamics.

VI.1 Foresight business scenarios The scenarios that are being developed target a simple, efficient and economical tool with a set of services for all types of paperless documents between all stakeholders in the food supply chain. This will be done by using:

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• •

International standards, both in the terms used (data dictionaries) and the messages used (EDIFACT or ebXML messages recognized by the United Nations). Adaptation processes in force in agricultural sectors like Fresh Fruits and Vegetables, Cereals and Dairy Products, farm equipment and their relationship with management centres (e.g. traceability, maintenance contract, professional statements, etc.).

Figure 35: Example of a technical aspect

Many advantages could be noted and will be profitable for the future user:  The opening to a large number of protocols;  Certification software;  The ease and speed of implementation;  Adaptability to all sizes of partners;  Low cost;  Standards compliance;  Reuse of the same infrastructure for other flows. Examples of scenarios such as the AgriXchange program have been analysed and are presented below, even though we should keep aware of the importance of using international standards, so the system is open and can be used by all (companies and actors all along the value chain, from different countries).

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VI.1.1 agriXchange agriXchange “Network for data Exchange in agriculture” (www.agrixchange.eu)is an EU-funded coordination and support action aiming to setup a network for developing a system for common data exchange in the agricultural sector through the following specific actions:  establishing a platform on data exchange in agriculture in the EU;  developing a reference framework for interoperability of data exchange;  identifying the main challenges for harmonizing data exchange. The action comprises 15 partners from 11 countries and started in Dec/2009. It is planned to finish in Dec/2012 and the acknowledgment that the current situation on information exchange and standardisation in agro food is far from ideal is its main motivation. The action, that in fact has similar goals as the eFoodChain project, produced two major results, a portalbased platform named axTool and a reference framework for interoperability. The axTool is a knowledge and information sharing environment, embedded in a portal published at http://www.agrixchange.eu, allowing the agro-food community to model use cases involving information sharing / exchange in the agro-food sector. A methodology for use case modelling is defined, through which agro-food specialists specify the actors involved in the use case (e. g. entities in the supply chain), the activities they execute and their time sequence (e.g. the workflow in the process), and the data that are exchanged in some points of the model by different entities in the use case (Figure 36).

Figure 36: Geofertilizer use case modelled in the axTool (extracted from “The aX Tool for information exchange in the agri-food sector)

The sharing of such information and knowledge in a public portal in the Internet (with related functionalities for searching, retrieving and discussing), if accepted by the agro-food community, may in the future be a major driver for the harmonization of business processes and data exchange in agro-food supply chains and thus for the eFoodChain project this may a relevant element. For the time being and according to the SmartAgrimatics conference (www.smartagrimatics.eu) held in June this year where the axTool was presented, its future exploitation is not specified (also the tool, as it is implemented presently, does not offer

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graphical tools to support the modelling activities of users, thus allowing them to build non agriXchange-conformant models). This axTool is an element of a wider framework aiming at harmonizing data exchange and interoperability in food supply chains (once again, note that this is also the goal of the eFoodChain project). This integration framework comprises the following elements:  Conceptual technical architecture;  Reference information model;  Technical communication infrastructure;  Organisational infrastructure. Within the aim of the technical architecture, agriXchange proposes a Service Oriented Architecture (SOA), consisting of the following major layers:  A business process management layer, coordinating the execution of business services taken from the underlying layer and encapsulating them into business processes. Workflows of these services are defined by languages such as BPEL and BPML and their enactment allow the execution and control of the corresponding business process;  A business services layer delivering information services to the business processes;  A business application layer, responsible for the execution of the application logic and data storage, and available through a set of web services used by the business services. In this way, the functions that support a given business process in a food supply chain and that are supported by enterprise applications are made accessible over the network in the form of services and combinations of services. The proposed technical solution allows the reconfiguration of business processes on top of existing information systems at the companies’ own business pace. A set of information models comprise the second element of the agriXchange integration framework:  actor models, for modelling the involved actors, their roles and interactions;  business control models, providing information about business functions (product development, sales and contracting, procurement and production) at different levels within an enterprise (e.g. strategic, tactical and operational);  business process models, specifying the activities and their sequence in the process (and supported by underlying services and services orchestration in the technical architecture);  data models, specifying data required to support the execution of business processes (at this level, EDI and XML-based messaging formats are essential). In this information modelling, agriXchange proposes the SCOR (Supply Chain Operations Reference) as the supporting model at the supply chain level. The agriXchange technical communication infrastructure provides the implementation environment for the conceptual technical architecture and supports the design of information models, the development of web services, the execution of business processes and the sharing of data. Technologically, this element may be implemented by commercial and Open Source SOA platforms.

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This integration framework, specifically the conceptual technical architecture and the reference information model may be elements to further exploit in the eFoodChain project. The first element proposes a Service Oriented Architecture model and is in accordance with the trends seen in the ICT industry in the last 5 years. The specification of Services and their availability in the Internet allowing the communication from computer to computer (also in line with the Internet of Service paradigm) are elements that if standardised appropriately may constitute the basic ingredients for an interoperability framework in agro-food supply chains. In this context, the conceptual technical architecture proposed by the agriExchange action seems appropriate for the eFoodChain project. On the other hand, information models (actor models, business control models, business process models and data models) are also necessary for addressing interoperability in agrofood chains. In this area, the agriXchange action proposes the methodology to define these models but does not define actually the target business processes to be addressed or the data models to be used or recommended. VI.1.2 Consumer driven supply chain networks Consumer driven supply chain networks are often seen as a type of supply chain that efficiently pushes products to the market place. According to scientific literature, this is a supply chain network that senses and reacts to real-time demand information of the ultimate consumer and meets those varied demands in a timely and cost efficient manner (Wiersinga et al;, 2010). A focus on the consumers’ needs and alignment with the actual demand coming from consumers is a basic requirement of a consumer (or demand) driven supply chain. This has direct reflections on the collection and sharing of information along the network about sales numbers so that the network can respond quickly and appropriately to changes in demand. Within the scope of the ISA Fruit European research project, ten innovative consumer driven fruits supply chain networks in Poland, Greece, Spain and in the Netherlands were selected for analysis in order to identify their organisation and management structures that contribute to the innovativeness of such types of networks. In this context, a list of critical success factors (CSF) was derived:  existence of a lead firm in the fruits chain;  cooperation within the fruits chain network;  strategic attention for innovation;  customer focus;  focus on timing-to-market;  innovation-fostering culture;  project approach of the innovation process;  exchange of information (market information retrieved by retailers from consumers, information collected from fairs, exhibitions, scientific literature and business magazines and information regarding production planning);  tracking and tracing through quality management system (traceability along the food chain);

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internal and external information collection (key performance indicators on finance, business processes, customer satisfaction and innovations and information from sales, market research and trends); investment in know-how.

The case studies conducted within the ISA Fruit European research project also show that there are different ways for a supply chain to be considered consumer driven and innovative. A typology of innovative and consumer driven fruit supply chains, based on four different combinations of CSFs, is proposed by Wiersinga (Wiersinga et al;, 2010). The existence of a lead firm in the fruit chain, the availability of a tracking and tracing based quality management system and customer focus are the three CSFs that appear in all four types of food chains. Clearly, one scenario to be addressed by eFoodChain is the one related with traceability all along the food chain. In this context, the technical specifications from GS1 are the ones relevant to take into consideration. This includes the Electronic Product Code (EPC), a unique number used to identify a specific item in the supply chain and the EPC global Architecture Framework, a collection of hardware, software, and data standards, and a shared network services to enable accurate, immediate and cost-effective visibility of information throughout the supply chain. Besides the fulfilment of food safety requirements (mainly in fresh vegetables and fruits supply chains), it is also important to realize that the sharing of tracking and tracing data all along a chain network has the potential to promote cooperation at other levels within the chain network and further increase the exchange of information between the actors involved in the chain. VI.1.3 SmartAgriFood The SmartAgriFood project – Smart Food and Agribusiness: Future Internet for Safe and Healthy Food from Farm to Fork – is funded in the scope of the Future Internet Public Private Partnership Programme (FI-PPP), as part of the 7th Framework Programme of the European Commission. This project started on the 1st of April 2011, with duration of 24 months, and involves 21 partners from across Europe. The main objective of the SmartAgriFood project is to boost the application and use of future internet and ICT in the agro-food sector. To achieve this goal the project will identify and describe future internet requirements for experimentation in smart agro-food production (including farming, logistics and food awareness), and will develop prototypes to demonstrate critical technological solutions. The project is focusing three use case scenarios: 

Smart farming – focusing on the application of technology (sophisticated sensing & monitoring, decision support and precise application) to the individual treatment of animals, plants or land, at the right place and right time to improve efficiency, productivity, quality, flexibility and chain responsiveness; Smart agri-logistics – focusing on the intelligent (e.g. auto-identification, conditioned transport using sensors and control systems, remotely controlled early warning systems, etc.) matching demand and sourcing, transport and logistics of agro-food goods;

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Smart food awareness – focusing on providing the consumer with relevant information concerning safety, availability, health, environmental protection, animal welfare, etc.

VI.1.4 Opportunities for eBusiness and eCommerce of agro-food products Various business sectors have explored the eCommerce and eBusiness solutions due to the competitive advantages these solutions might offer in specific settings. Amazon pioneered this approach and keeps on innovating its offer in order to maintain and increase its client base. In the agro-food sector there has been a tendency to focus on the on-line sales to the final consumer (B2C) of specialized products with a high added value. However, the biggest opportunities are on straightening the relationships with current clients and creating new ones. As an example, on-line relationships could be fostered with local restaurants or local markets, and direct sales to schools, hospital and company canteens and to other institutions. The orientation of local production to regional institutions will benefit from an effort to implement eBusiness and eCommerce systems that allow small local producers to access these markets. As an example of such an approach is the “Farm to School” program (www.farmtoschool.org) currently on-going in the USA, defined as a program that connects schools and local farms with the objectives of serving healthy meals in school canteens, improving student nutrition and supporting local and regional producers. Similar programs, supported by ICT solutions, can be implemented in order to connect small local producers with restaurants and other organisations. VI.1.5 Agriculture information systems In the near future, producers will need to support and organise their management (information and knowledge) with the help of ICT. Although some examples already exist, this is seldom the case being that in most cases the use of ICT is very limited (or inexistent) and it does not cover all the process in an integrated way. The producers, the producers’ organisation, their partners delivering inputs to the farm and those buying products, have information needs that have to be covered and managed. Producers have today to document huge amounts of information to different stakeholders within the market, in the different formats but with overlapping content. These stakeholders and their knowledge requirements include, for example:   

ministries for subsidies or government bodies for several other tasks; buyers of food products need the documents to allow them to comply with the farmto fork legislation; retail and logistics service providers need information about availability and shipping in order to optimize transport and costs.

Considering these different actors and their requirements, management systems are divided into three levels:

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 

macro level, which includes the management of external information, for example the market, subsidy systems, weather prediction, global market and traceability systems etc.; farm level, which includes, for example, economic systems, crop rotation, decision support systems to optimize production; field level, including precision farming, collection of information about traceability and in the future, robotics.

Producers require systems easy to handle, able to solve their problems in just a few clicks, or that they get supported by new models of producer advisory systems that are able to address their needs. The use of the Service Oriented Architecture (SOA), where the systems group functionality around business processes and packages these as interoperable services, provides new methods for systems development and integration. SOA infrastructures allow different applications to exchange data as they participate in business processes. Service-orientation aims for a loose coupling of services and offers the possibility of efficient knowledge management on all levels of the management system. In general, ecological, technical business and legal requirements need new structures that are able to fulfil and support the producer’s needs. An important task over the coming years will be to train the producers to adopt new technologies in their activities. In addition to ICTs, special attention needs to be paid to the training of producers in order to answer an increasing demand for new methods and new requirements. The development of take-up activities will be of key relevance, taking into consideration the effect such projects will generate in the whole sector. Further to implementing technology transfer in pilots, the economies of scale that can be achieved through ICT initiatives combining ICT equipment and e-skills training through producer associations can greatly facilitate ICT take-up by small producers. VI.1.6 Precision agriculture, integrated pest management Precision agriculture is a management concept based on observing and responding to intrafield variations. It relies on new technologies like remote sensing (satellite imagery), in situ sensing (sensors locally distributed in the field), information technology and geospatial tools. It is also aided by the producers’ ability to locate their precise position in a field using satellite positioning systems like GPS. Precision agriculture aims to optimize field-level management by matching practices more closely to crop needs (e.g. fertilizer inputs) and by reducing environmental risks and the footprint of farming. Precision agriculture also provides farmers with a wealth of information to build up a record of their field, their crops and improve traceability. It also provides information to improve their decision making, enhance the quality of the products and comply with regulations and certification requirements.

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Integrated pest management is a broad approach to pest control that integrates pesticides/herbicides into a management system incorporating a range of practices for the control of a pest. It is based on the prevention of the infestation, on the observation of patterns of infestation when they occur and on interventions (with limited chemicals) when necessary. The collection, storage and management of this huge amount of information, not only by the producers, but also by the producers ‘organisations and authorities, with the help of ICT solutions, create opportunities for improving not only the efficiency of production (in economic and quality terms) but also the ecological and environmental footprint of this activity. VI.1.7 Transparent_Food project This European FP7 project (http://www.transparentfood.eu/), concluded in 2011, evolved from the Strategic Research Agenda of the European Technology Platform “Food for Life” and aimed to “contribute to the development of transparency in the sector by supporting the understanding of its complexities, identifying the present state-of-the-art, learning from experiences, making stakeholders aware of specifying deficiencies and research needs, and formulating a research framework for facilitating future research initiatives”. Motivation for the project is mainly related to the wide acknowledgment that an “appropriate transparency within the food sector is of crucial importance and a critical success factor for the sustainable development of the sector and for the ability of food chain actors and policy to guarantee food safety and quality”. Additional factors are related to providing consumers with the information they need for exercising their preferences in buying behaviour. Among their work, the following elements are of particular importance to the eFoodChain and should be further studied and analysed in the first conception of the eFoodChain framework:  a framework ‘Infrastructure and Multi-Dimensional Tracking and Tracing Needs’, providing baseline system solutions, especially to assure the tracking and tracing capability with transparency information extensions;  a specification of information and information layers with relevance for food safety and quality for environmental, ethical or social concerns. VI.1.8 ENORASIS Irrigation is recognized as a significant environmental challenge and since agriculture consumes the largest amount of water globally, irrigation practices in agriculture have not only an important impact on water consumption, but also on the quality of the products. The ENORASIS project (www.enorasis.eu) aims to develop an irrigation management Decision Support System (ENORASIS Service Platform and Components) for farmers and water management organisations, with the combined use of satellite data, advanced modelling, and process control. The main stakeholders of the ENORASIS solution are farmers and water management companies. ENORASIS aims to optimize the use of irrigation water by:

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 

developing an intelligent Decision Support System of irrigation management; providing water authorities and farmers with an intelligent, flexible, affordable and easy-to-use irrigation water pricing-billing system.

The ENORASIS key enabling technologies include:  Meteorological Forecasting Models;  Meteorological Analysis Tools;  Satellite data;  Remote Sensing tools;  Smart water sensors;  GIS technologies. For these technologies ENORASIS has provided an extensive report (ENORASIS, 2012) that describes the technology, the current and potential use in agriculture for the optimization of the irrigation water use. VI.1.9 Internet of Things (IoT) Precision agriculture, integrated pest management, tracking and tracing of agriculture goods, demand a high diversity of sensors and produces a huge amount of data. Various types of sensors (e.g. humidity sensors and temperature loggers) are used in the agro-food sector, from the farm to the store, including during the logistics process. These applications are mainly limited in scope and focus on specific subparts of the processes and of the logistics chain. There are communication and information breaks, especially when the ownership of the good is changed. However existing technologies are capable of addressing these issues and, if some requirements are met, create a single and integrated follow up of information all along the supply chain. Communication aspects of the IoT are already fairly well covered by existing technologies, such as networked RFID, wireless sensor networks, delay tolerant networks and near-field communication. The definition of new or the extension of existing standards and messages to accommodate all this information captured by a “global” sensor, in which combinations of sensor information is integrated, can enable the constant monitoring of the product status and enable the identification of exceptions or deviations from expected conditions from the supply chain perspective.

Foresight scenarios: key issues Precision agriculture or irrigation management are directly linked to ICT, and highlight the changes appearing in agriculture for several years. Farmers will need to be trained to adopt new technologies for their farm management at different levels: macro level, farm level and field level. Even the short value chains, which are currently developing in the fruits and vegetables sector, need an optimized logistics process that could be improved by a smart use of ICT. The needs of certification and traceability, requested from both authorities and clients, lead to the development of an efficient and effective tracking and tracing of products all along the

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value chain. Moreover, sustainability concerns are also starting to become relevant. This is directly linked to an efficient communication for information flows. The eFoodChain project takes into account all those issues and learn from such projects, to develop the foresight business scenarios in order to derive the needs and specify the requirements for the eFoodChain framework. The aim is to develop a simple, efficient and economical tool, based on the international standards that will allow a better functioning of the whole supply chain in the agro food sector.

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VI.2 Impact of ICTs in the structure and market dynamics of the sector The development of ICT and adoption for Business To Business transactions by even more companies will have impacts in the structure and dynamics of the sectors. These impacts concern on one hand the fluidity of the value chain, and on the other hand different types of benefits: immediate, mid-terms, strategic benefits. VI.2.1 Fluidity of the value chain Electronic data interchange is part of a process optimization and integration of the value chain. They allow an easier, more reliable and more rapid exchange and sharing of information. By defining a common language, they can structure and streamline the flow of information "within" and in "international" companies. Beyond the elimination of administrative costs, electronic exchanges are the foundation of inter-firm collaboration in a perspective of global integration of the value chain.

Figure 37: Generic value chain

VI.2.2 Immediate benefits Through the use of the EDI, companies exchange information faster and more reliably avoiding multiple entries. The immediate benefits resulting from an EDI project are: • The time of manual input is replaced by the time of control of the information exchanged; • Input errors disappear (the average is an error every 500 characters entered); • Cycles order / delivery and billing / payment are shortcuts and allow a reduction of safety stocks and better cash management. For example, the

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elimination of mailing time and the removal of entry time can help in some cases to earn up to three days in the procurement process. These benefits are accompanied by a natural improvement of the quality of trade and services through the elimination of repetitive tasks. VI.2.3 Mid-term benefits In addition to these improvements, concrete and immediate, the electronic data exchanges create dynamic information sharing which supports the creation of new services. By automating repetitive tasks, dialogue is naturally oriented towards improving the service and the identification of new needs. By participating in cost reduction, the EDI also helps create a fiscal space for the development of new products. This results in customer loyalty for which the electronic communication between professionals can provide services and additional productivity gains. VI.2.4 Strategic benefits The strategic benefits obtained as a result of the introduction of electronic communication between professionals are considerable. The most significant is in the improvement of trade relations between the company and its partners. These benefits include:  The decrease in outstanding stock and financial stocks through a better understanding of the needs (gains of over 35% regularly observed);  Reducing delays by removing administrative tasks (earnings above 50% in the case of dematerialized invoice);  Improved responsiveness and flexibility of the company.

VI.3 Perspectives from the market The main objectives of companies in general are an increase in productivity and an improvement of business relationship with their business partners and their clients. Nowadays, using ICT solutions is necessarily associated with the aim of achieving these objectives. For the agricultural sector but not only, the guidelines are: • •

• • •

develop the use of ICT for traceability of agricultural products and development of services for food safety and quality; get more integration but staying flexible and mobile. Applications for mobility should be developed: for example requests, orders, confirmation of deliveries, invoices etc. should be used in hand-held devices; improve the information exchange between growers and processors by making use of Portals and Mobile devices which make the data recording, data exchange and data capturing in the ERP system much more efficient/effective; establish standardised exchanges in the upstream of agriculture and food sector, at the level of primary production; consolidate existing exchanges for business; keep on developing and harmonizing technical references through coordination or participation in dedicated working groups.

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It is necessary to enhance trust in the food supply chain among all stakeholders for the electronic data exchange. Trust is the basis for more efficient cooperation and business operation. Another important issue is the definition of wording along the food supply chain (e.g. sustainability). Only if we understand the same content in the needs and issues of the food chain we may facilitate the electronic data exchange. Further optimization of logistics processes through better data exchanges is crucial for some companies. Data integration into the company’s own systems (particularly ERP) is also gaining importance. Efficiency gains and simplification of certification processes (so frequent in agrofood industry) would be another much appreciated added value by companies. Further standardization, information requirements and automatic information flows will simplify and reduce the cost of numerous business processes, improving the quality of services and reducing errors at the same time. Last but not least the politicians shall harmonize the requirements for the documentation which is needed for the data protection within the EU. But the “confidentiality fears� of companies should be kept in mind.

Impact of ICT in the market and perspectives: key issues Increasing the adoption of ICT for B2B transactions in the supply chain serves several purposes. First, by proposing a seamless environment for information flows, this would help having a real fluidity of the supply chain. Cooperation would be easier between partners, thanks to straightened relationships. This is also an important aspect concerning the behaviours of the different actors. More information and more transparency in the supply chain will promote confidence and trust. Moreover, for all actors benefits can be immediate, mid-term or in the long term (strategic). Immediate benefits are related to a quality of service enhanced by automation of repetitive and error-prone tasks. The time gained allows to develop new services, which consist on midterms benefits. Finally, the trade relations are improved with all the different partners of a company. The increased adoption of ICT for B2B transactions is consistent with the global strategy and goal of companies, even more in the global market where competitiveness and reactivity are key elements. Expected changes in the market structure (for example, the de-regulation of the milk production) are also a key driver for an increased adoption.

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VII. Conclusions This report presents an overview of the adoption of ICT in B2B transactions in three European agro-food sectors: dairy products, cereals and fresh fruits and vegetables. This overview has been developed through a methodology that besides desk research also included survey and interviews to experts. Many companies from these three sectors and from all positions of the supply chain have been contacted and filled in the survey. Among responses from companies and interviews conducted, it has been highlighted an important difference of use and interest for ICT solutions for B2B depending on the sector. Cereals and fresh fruits and vegetables industries seem to be well equipped, while dairy industry appears less involved in the implementation of ICT solutions for B2B transactions. Moreover, a huge gap has been emphasized in the level of adoption of ICT for B2B transactions between the upstream and downstream of the supply chain. Testimonies from Portuguese and Spanish companies consulted are particularly relevant for this point: the use of electronic data exchange is almost inexistent at the producer level and it is almost full used at the retail side. But even at the retail side this is limited to financial related information. Overall, some soft barriers –cultural behaviour, confidence and trust – are very present in some countries. Also the lack of skilled workers in SMEs needs to be considered. German companies mentioned that food safety and certification processes, with several standards being used demanding for different but overlapping sets of information, are mostly done manually with a few exceptions of a few web platforms. Through the survey results, it has been noted that the digital exchange of traceability messages is very low. Traceability and resource optimisation in times of crisis, as well as the integration of “sustainability data” (use of resources) along the food supply chain are important drivers for further data integration. Conclusions on the level of ICT adoption, ICT standardisation and interoperability challenges for B2B transactions in the three target supply chains are available in annexXII.2.

Current landscape on the use of ICT for data exchange Regarding the adoption of ICT for B2B transactions, there is a real gap along the supply chain, between the upstream and the downstream. A very low adoption from producers, especially in the dairy industry, faces an almost complete adoption at the distribution and retail level in the three sectors. Messages exchanged electronically are mainly business messages such as orders or invoices. There is a lack in the electronic exchange of logistics and traceability messages.

Main challenges and trends identified in the interviews point in the direction of further developments in EDI support for information related with logistics, safety and certification processes. Currently, all standards and technologies for the data exchange are available.

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However, only few actors really use them, and the issue of efficiency of ICT solutions for all actors of the value chain is crucial. Yet, given the existence of different standards, the problems that still remaining are related to harmonization and interoperability. Interfaces and links to connect all standards in a more efficient system are needed. The huge diversity of companies along the supply chain makes the work more difficult. Nevertheless, further standardizing processes, information requirements and information flows will simplify and reduce the cost of integrating growers and traders or/and processors. Especially the capabilities of micro and small companies with regard to ICT for B2B transactions have to be enhanced. In fact, financial issues have been often presented as crucial issues to the development of ICT solutions, moreover as the companies targeted are SMEs. This is also one of the motives why producers, mainly small companies, organise themselves in producer organisations, gaining scale and negotiation power. This is very important to have in mind when deriving the needs and requirements for the eFoodChain framework: affordability of the solution size of the market and size of the company indicate that the proposed solution should be capable to integrate small companies but cannot disregard big players; having this solution aligned with the needs of the producers organisations will help to guarantee the scale necessary for the low cost. This will result in a larger adoption of such solutions in the market, which is the final objective of the eFood Chain project.

Main drivers and barriers Problems of skills: Lack of skills and knowledgeable resources, problems of affordability. This is especially true for small companies, and at the producer level. Problems of standards and harmonization: Many standards exist but problems remain to cross borders and inter-sectoral transactions. Few actors use standards. Cultural barriers: Fears still remain at the producer level in many countries. The importance of the network effect of user companies and the partners’ demand should help to solve this problem. Financial issues: Most companies of the sectors are SMEs with a low potential of investment in ICT solutions.

In the eFoodChain workshop hosted by the European Commission on the 9th of July 2012, participant experts were asked, through an interactive exercise, to identify priorities for intervention in the supply chain of the three sectors in question. The final result of this exercise is represented in Figure 38, with the red dots indicating the priorities for intervention.

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Figure 38: Priorities of intervention (Fresh Fruits and Vegetables, Dairy Products, Cereals)

These pictures are available in bigger size in annex XII.2, but this “1000 feet view” is very interesting and allows to draw the following lessons:  Experts consider that priorities for intervention are mainly in the upstream (in the three chains).  Experts consider that in the Fresh Fruits and Vegetables and Dairy Products sectors the direct access from producers to the market (shortcut) is important.  Experts consider that in the Dairy Products sector it is important to consider the wholesalers. At the same workshop the participants were asked to classify, in terms of importance and complexity of implementation, opportunities to improve the supply chain. These opportunities, identified during the desk research, survey and interviews, were validated and the classification (Figure 42) has two interesting outcomes:  Experts go for the easy solution with quick return (purchase-to-pay solutions).  All other solutions got the same attention in terms of “votes”.

Opportunities to improve the supply chain Develop standardised exchanges in the upstream of agriculture and food sector, at the level of primary production. Regarding the existence of many standards, there is a real need in the interfaces and links to connect all standards in a more efficient system. Improve the information exchange between growers and processors by making use of Portals and Mobile devices. The idea is to get more integration but thereby staying flexible and mobile (B2B). ICT support to traceability of products, and services for food safety and quality might be developed accordingly (B2B, B2C and B2G). ICT support for product and production certification (B2B and B2G) ICT support for exchange of laboratory tests and quality results (B2B and B2G). ICT support for sustainable production and products (B2B and B2C).

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Although the work package entitled “Market Analysis”, responsible for conducting the market research, is completed, the analysis and conclusions presented in this report will evolve as the work on the other work packages progresses. For example, experts from other countries not included in the initial set will be contacted. Though, no further releases of this report are foreseen, if relevant new findings occur this might be the case. In the third work package “Framework Development”, work will be focused in the development of the eFoodChain framework. The goal for this framework is to set the principles and rules for interoperability among business processes and data exchange models, in order to allow for seamless, paperless information and data flows underpinning B2B transactions along the food supply chain. The needs and requirements for the eFoodChain framework are derived from the results of the market analysis. The process to be followed is represented in Figure 39, where the building blocks 1, 2 and 3 result from the market analysis and building blocks 4 and 5 will be subject to the “Framework development” work package.

Figure 39: Building blocks for the eFoodChain framework

There is currently a growing awareness of the benefits associated with more and better integration from which the eFoodChain project can take advantage. The needs and requirements for the eFoodChain framework will be derived from the results of the market research presented in this report. At the same time, the interviews conducted with several stakeholders across Europe have enabled to identify possible pilots, some of them involving cross border messages exchange, that will be further explored in work package “Pilot Prototypes”.

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VIII.

References

AgriXChange. AgriXchange Network for data exchange in agriculture (2010), [online] www.agrixchange.eu (Retrieved 05 2012) AgroXML. [online] http://www.agroxml.de (Retrieved 05 2012) AgXML. [online] www.agxml.org (Retrieved 05 2012) Bejjani G. (2000) E-commerce: the net effect of agribusiness, Capital Investment and market makers. Danone. (2010). Document de rĂŠfĂŠrence - Rapport financier annuel. [online] http://phx.corporateir.net/External.File?item=UGFyZW50SUQ9ODcyOTR8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1(Retri eved 06 2012) Doluschitz, R. et al. (2005). agroXML - A Standardised Data Format for Information Flow in Agriculture. EFITA/WCCA Joint Congress on IT in Agriculture. ENORASIS. (2012). State of the art Technical Analysis Report. [online] http://www.enorasis.eu/uploads/files/ENORASIS_SOTA_report.pdf (Retrieved 06 2012) European Commission, DG AGRI (2010).Agriculture in the EU, Statistical and Economic Information Report. Eurostat. [online] http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home (Retrieved 05 2012) Eurostat External Trade. [online] http://epp.eurostat.ec.europa.eu/newxtweb/ (Retrieved 05 2012) FAOSTAT (Food and Agriculture Organisation of the United Nation, Statistic Division), [online] http://faostat.fao.org/site/339/default.aspx (Retrieved 05 2012) Food and Drink Europe. (2011) Data and Trends of the European Food and Drink Industry, [online] http://www.fooddrinkeurope.eu/uploads/publications_documents/Final_DT_2012_04.06.pdf (Retrieved 05 2012)

Food retailers in Europe and worldwide. Retailers in Europe - European Retail Rankings,[online] http://www.retail-

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index.com/HomeSearch/RetailersinEuropedatabasebysectorEnglish/FoodRetailersinEuropeand worldwide.aspx (Retrieved 05 2012) GS1. (2012). The global language of business: Products and solutions, [online] http://www.gs1.org/productssolutions/ (Retrieved 05 2012) GS1 Working Group: Frugicom. (2009, December 9). Business Requirements Analysis Document (BRAD) for: The Exchange of Crop Data; Version: 1.0. Holster, H. (2012) The AxTool for information exchange in agri-food sector. Smart AgriMatics Conference. Paris. [online] http://www.smartagrimatics.eu/Portals/66/Smart%20AgriMatics%205_1%20Introduction%20 Pesonen.pdf(Retrieved 05 2012) INRA. (2004, March 2nd) Quelques caractéristiques des filières fruits et légumes. Salon International de l’Agriculture.Paris. INSEE. (2006) Enquête sur les changements organisationnels et les technologies de l’information et de la communication(COI-TIC).

iTradeNetwork. (2012). Business Flyer. Serfiotis, M. DG Agri Fruit and Vegetables. (2008). Data analysis 2000-2007 - Results and main trends. Systemarena GmbH (2012). The exchange format in the food sector, [online] http://www.foodxml.de (Retrieved 05 2012) Transparent_Food. “Transparent Food – Technologies and Implementation”, Workshop, 8th to 9th November, 2011, [online] http://uf.ilb.uni-bonn.de/transparentfood/events.html#nov8 (Retrieved 05 2012)

VDMA. (2011). WeihenStephaner Standard: An MES Interface for all machines used in the food and beverage industries, [online] http://weihenstephanerstandards.de/files/uploaded/Veroeffentlichungen/WS_Broschuere_01_English.pdf Vogel, T., Schmidt, A., Lemm, A., Osterle, H. (2008).Service and Document Based Interoperability for European eCustoms Solutions.In Journal of Theoretical and Applied Electronic Commerce Research, pp. 17-37. [online] http://www.scielo.cl/pdf/jtaer/v3n3/art03.pdf

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Wiersinga et al. (2010). Consumer driven and innovative fruit supply chains. In Jacques Trienekens et al., Towards effective food chains – Models and applications. Wageningen Academic Publishers. Wolfert et al. (2010). Organizing information integration in agri-food—A method based on a service-oriented architecture and living lab approach. Computers and Electronics in Agriculture, p70.

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IX. Annexes IX.1 Characterization of the survey sample Annex 1: Number of companies surveyed per country

Number of companies Belgium France Germany Italy Netherlands Poland Portugal Spain United Kingdom Greece Andorra Total

3 85 12 51 78 9 35 16 27 31 1 348

Annex 2: Number of companies surveyed from each business sector

Number of companies Fresh Fruits and Vegetables Cereals Dairy products

157 76 94

Annex 3: Position in the value chain and size of companies

Number of employees 1-50 Producer Processor Distributor, Logistics Service Provider Retailer Supplier of services, equipment, technology, materials Total number of companies*

51-100

101-500

>500

TOTAL

141 83

17 13

11 14

13 125

182 125

32 64

12 12

6 18

9 8

59 102

43

3

13

9

68

238

36

43

31

348

* some companies have several positions in the value chain

Annex 4: Members and associates of the companies surveyed, per country

Business Location Belgium France

UPSTREAM

DOWNSTREAM

Number of producers (incl. members) 400 37388

Number of companies associates 2400 417013

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Germany Italy Netherlands Poland Portugal Spain United Kingdom Greece Total

1 11033 66 78 124 7 6 8 49111

12 5648 1472 81 147 12 23 30 426838

Annex 5: Members and associates of the companies surveyed, per sector

Number of producers (incl. members)

Number of companies associates

Upstream

Downstream

Fresh fruits and vegetables

18330

232462

Cereals

28436

319847

Dairy

4894

35571

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Market

IX.2 More detailed data from the survey analysis Annex 6: Adoption of ICT in B2B transactions upstream and downstream, weighted results

UPSTREAM Do you exchange electronic business messages? No Yes

Number of producers (incl. members) 34214 14897

DOWNSTREAM Number of companies associates 86694 340144

% of producers 70% 30%

% of companies 20% 80%

Annex 7: Use of ICT in B2B transactions per sector between upstream and downstream, weighted results

(Number of producers and associates companies)

Use Don't use

Fresh Fruits and vegetables

Cereals

Dairy products

Upstream Downstream Upstream Downstream Upstream Downstream 8 100 232 423 6 686 236 963 13 30 638 10 230 10 305 21 750 82 884 4 878 4 933

Annex 8: Adoption of ICT in B2B transactions depending on the position in the value chain

Annex 9: Use of ICT along the value chain

N. of % of N. of companies companies companies using ICT using ICT not using ICT Producer Processor Distributor, logistics service provider Retailer

101 70 48 63

55% 56% 81% 62%

% of companies not using ICT

81 55 11 39

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Supplier of services, equipment, materials or technology

47

69%

21

31%

Annex 10: Level of adoption of ICT in B2B transactions, depending on the size of the companies

Annex 11: Use of ICT depending on sector per country (number of surveyed companies)

Belgium France Germany Greece Italy Netherlands Poland Portugal Spain United Kingdom

FRUITS AND VEGETABLES Yes No 2 1 6 3 3 0 4 2 17 2 46 27 2 0 7 12 3 2 12 6

CEREALS Yes 0 33 0 5 7 2 5 4 1 6

DAIRY PRODUCTS No 0 0 1 8 2 0 0 1 0 3

Yes 0 6 3 6 7 3 1 5 5 6

No 0 30 2 5 4 0 0 4 1 3

Annex 12: Types of messages exchanged electronically and technologies used

(Number of quotes) Order Invoices Order response Dispatch advice Catalogue/ Product information Delivery instruction Delivery ship

EDI

XML

Web-EDI

ebXML

Electronic marketplaces

88 82 56 51

16 16 15 10

26 21 16 13

3 1 3 2

12 7 9 4

45 34 36

18 13 14

21 13 15

3 2 1

19 7 8

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Payments Quotation Traceability message

27 18 16

14 16 12

15 6 11

1 2 3

7 16 6

Annex 13: Most important messages to be exchanged electronically

TYPE OF MESSAGE

Number of quotes

Order Invoices Catalogue/Product Information Payments Traceability message Order response Quotation Dispatch advice Delivery Instruction Delivery Ship

173 159 109 84 82 72 71 62 55 47

Annex 14: Benefits expected from EDI

BENEFITS

Number of quotes

Improve your quality of services Reduce length of business cycles Reduce manual data entry, save time and money Respond to clients requests Reduce marketing costs Reduce data interchange costs with the public administration Expand market abroad Deal with competition Simplify data interchange with the public administration Legal & tax complexities Reduce data interchange costs with banks Expand local market Diversify activity

126 77 72 47 32 27 26 22 23 17 16 9 4

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Annex 15: Types of projects quoted by the companies surveyed

Annex 16: List of ongoing projects

PROJECTS

Number of companies

Traceability E-invoicing Customer Relationship Management (CRM) E-procurement Electronic catalogue EDI Electronic marketplace Web EDI Call for tenders digitalization Enterprise Application Integration (EAI) RFID Web XML Purchasing card AS2 Protocol UN CEFACT Core components AS1 Protocol AS3 Protocol

78 63 43 27 26 27 18 17 13 14 12 8 8 3 2 0 0

Annex 17: More usual problems encountered with the projects’ implementations

PROBLEMS

Number of quotes

Standardization of exchanges Potential customers still insufficient Financial investment costs Resistance to organisation changes

64 63 55 53

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Development time Lack of equipment from partners Compliance with procedures Data integration into ERP Difficulties in the integration with management systems Technical complexity Fears due to confidentiality, safety & job cuts Lack of training and support Legal & tax complexities Telecommunications costs Interchange certification

41 37 37 35 31 32 28 26 18 16 7

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IX.3 Questionnaire Name: ____________________________ Company: _________________________ Position:___________________________ E-mail:________________________________ Q1| Number of employees:

□ 1-50

□ National □ International Tel:____________________

□ 51 – 100

□ 101- 500

□ +500

Q2| Business location (country): ________________ *Note: In the electronic version, please provide a drop-down list with all European countries

Q3| Your market location:

Q4| Business sector:

□ Local □ National □ European □ Other Countries □ Fresh fruits and vegetables □ Cereals □ Dairy products □ Other

Q5| Position in the value chain: (please mark all necessary answers/// multiple answers are possible) □ Producer □ Processor □ Distributor/Logistics Service Provider □ Retailer □ Supplier of services/equipment/technology/materials Q6| Position of your clients in the value chain: (please mark all necessary answers/// multiple answers are possible) □ Producer □ Processor □ Distributor/Logistics Service Provider □ Retailer □ Final Customer Q7| Do you exchange electronic business messages with your business partners? □ Yes □ No If Yes: Q7 A| Please select the type used: Category of data

EDI

XML

Web-EDI

eb-XML

Marketplaces

Catalogue/Product Information

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Quotation Order Order Response Delivery Instruction Delivery Ship Dispatch advice Traceability message Invoices Payments Others, please specify :

If Yes: Q7 B| The exchange of electronic business messages is integrated with your business information systems? □ NO □ ERP □ DMS □ Other If Yes: Q7 C| Overall, what is the percentage of automatic electronic processing of incoming/outgoing messages in your company? □ 0% □ 1%-25% □ 26%-45% □ 46%-100% Q8| Please, select the 5 business messages that you consider the most important to be exchanged electronically with your business partners: □ Catalogue/Product Information □ Quotation □ Order □ Order Response □ Delivery Instruction □ Delivery Ship □ Dispatch advice □ Traceability message □ Invoices □ Payments □ Others; please specify_____________________

Q9| Would you benefit from a stronger integration with your customers and suppliers (automated data exchange) to reduce handling of paper documents? □ Yes □ No Q10| How many partner web-portals do you currently use (e.g. you have to register with a web-site and type in your order data into forms in a browser)? □0 □ 1-4 □ 5-10 □ +10

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Q11| Do you provide machine readable labels to your customers? □ Yes □ No Q12| Do you request machine readable labels from your suppliers? □ Yes □ No Q13| What are your projects for the next 18 months? (5 choices max) □ E-invoicing □ E-procurement □ Web XML □ Call for tenders digitalization □ AS1 Protocol □ AS2 Protocol □ AS3 Protocol □ EDI □ Web EDI □ Electronic catalogue □ Enterprise Application Integration (EAI) □ Electronic marketplace □ CRM □ Traceability □ UN CEFACT Core components □ RFID □ Purchasing card □ Other …………………. Q14| What kind of problems/barriers did you encounter with regard to these projects implementation (or possible implementation) □ Compliance with procedures □ Data integration into ERP □ Standardization of exchanges □ Development time □ Fears due to confidentiality, safety & job cuts □ Potential customers still insufficient □Resistance to organisation changes □ Difficulties in the integration with management systems

□ Lack of equipment from partners □ Interchange certification □ Lack of training and support □ Financial investment costs □ Technical complexity □ Legal & tax complexities □ Telecommunications costs □Other ..............................

Q15| What benefits are you expecting from the electronic exchange of business messages? (4 choices maximum) □ Improve your quality of services □ Reduce marketing costs □ Deal with competition □ Expand market abroad □ Reduce length of business cycles □ Diversify activity □ Expand local market □ Reduce legal & tax complexities □ Respond to clients requests □ Simplify data interchange with the public □ Reduce data interchange costs with the public administration administration □ Reduce data interchange costs with banks □ Other ........................................

Q16| In your opinion, what are the Digital Supply Chain growth promoters? Exogenous factors: (3 choices maximum) □ Political support (e.g. national and international regulations) □ Internet development

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□ Network effect of user companies □ Decrease of telecommunication costs □ Optimization of the processes with the supply chain □ Increased technological performances □ Increase of telecommunication networks use □ Influence of various standardisation organisations □ Business partner-driven demand Endogenous factors: (2 choices maximum) □ Offer of new services to business partners (e.g. secure traceability, product availability) □ Too much diversification of integration solutions in the company (reduce the number of specific applications for integration) □ Increasing international awareness and uptake (to increase the visibility and presence on the global market) □ Strategic importance of e-commerce in the company

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IX.4 List of experts/stakeholders surveyed Annex 18: Agro-food companies surveyed

COUNTRY FRANCE FRANCE

COMPANY AREA CECAB D’AUCY

FRANCE

Chamber of Agriculture Rhône Alpes FDCL 25/39

SECTOR Agro supplier Fruits and vegetables Agriculture

ACTIVITY Union of cooperatives Producer, processor

Lactalis Sodiaal Union Wilh. Mestemacher GmbH C. Hahne Mühlenwerke GmbH & Co.KG DMK Deutsche Milchkontor GmbH Heinz Funken GmbH & Co. KG Privatmolkerei Naarmann KG Dr. Otto Suwelack Nachf. GmbH & Co. KG Düpmann GmbH & Co. KG Gemüseprodukte Bonduelle Deutschland GmbH OWD Lebensmittel

Dairy products Dairy products Cereals Cereals

Representation, advice to farmers Federation of cooperatives Producer, Processor Producer, Processor Processor Processor

Dairy products

Processor

Fruits and Vegetables Dairy products

Processor

Dairy products

Processor

Fruits and Vegetables Fruits and Vegetables Dairy products

Processor

NETHERLANDS

Royal Fruitmasters

NETHERLANDS

POLAND POLAND

Kwekerij Harting Vollebregt BV Polcargo International Sp. z o.o. w Szczecinie EuRolPol Sp. z o.o. ELEWARR Sp. z o.o.

Cereals Cereals Fruits and vegetables Fruits and vegetables Fruits and vegetables Fruits and vegetables Cereals

Trading company Processor Supplier of services

NETHERLANDS

Dimitriakis Kaplanidis Centro Servizi Ortofruticolli The Greenery B.V.

Agriculture Cereals

POLAND

CONTRACTUS LTD

Logistics service supplier Retailer, Supplier of services Producer, Distributor

POLAND POLAND POLAND

Confidential X. De Heus Sp. z o.o. Confidential

FRANCE FRANCE FRANCE GERMANY GERMANY GERMANY GERMANY GERMANY GERMANY GERMANY GERMANY GERMANY GREECE GREECE ITALY

POLAND

Dairy products

Cereals, Dairy products Cereals Cereals Cereals

Processor

Processor Processor

Processors/ Distributors Processor Grower Supplier of services

Processor, Retailer Producer Distributor, Logistics

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PORTUGAL PORTUGAL PORTUGAL

PORTUGAL PORTUGAL PORTUGAL

Frutus Hortapronta XI. ANP (Associação Nacional dos Produtores de Pera Rocha) XII. Associação dos Produtores de Maça de Alcobaça Lactogal Cerealis Codimaco

PORTUGAL

Luis Simões

PORTUGAL

FRULACT

PORTUGAL

PORTUGAL

ANIL (Associação Nacional da Indústria dos Lacticínios)

Fresh fruits Fresh vegetables Fresh fruits

service provider Producers’ organisation Producer/ Processor Producers’ organisation

Fresh fruits

Producers’ organisation

Dairy products Cereals Fresh fruits and vegetables, cereals and dairy products All agro-food

Producer/ Processor Processor Service provider (certification)

Dairy products / Fruits Dairy products

Processor

Agro-food research institute & service provider to the industry Distribution/Retail Producer Producer, distributor

PORTUGAL

COTHN

Fruits and vegetables

PORTUGAL PORTUGAL SPAIN

Sonae Distribuição LusoMorango Acrena

SPAIN

Ganadera Virgen de la Cabeza S.L. Several farms

Agro-food Fresh fruits Fruits and vegetables Cattle rearing

SPAIN

Cattle rearing

Service provider (logistics)

Industry Association

Producer Producer

Annex 19: ICT solutions providers surveyed

COUNTRY FRANCE FRANCE FRANCE FRANCE GERMANY GERMANY GERMANY GERMANY GERMANY GERMANY

COMPANY EDT ADHERENTS COOP EUROEDI ISAGRI Modus Consult AG SolutionTime Ltd. Steinhaus Informations systeme TEAM GmbH CLAAS Agrosystems GmbH & Co KG CSB-System AG

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GERMANY NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS NETHERLANDS PORTUGAL PORTUGAL PORTUGAL

ITrade Partner Alfa Automatisering Schouw Informatisering Goldfish-ICT Van Aaken Automatisering B.V. Q-ray my eyes Group NV Type 2 Solutions

Van Ruijven IT IBS Enterprise Sweden AB RPO ICT Solutions ZET solutions Agritect Advies B.V. Agrolean Saphety FoodInTech

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XII.1 Summaries of the interviews per country XII.1.1 France The first part of the surveyed companies provides technical tools which are suitable for each customer. In fact, these companies set up extranet, software, ERP or EDI solutions for B2B exchanges and e-business. For example, EuroEDI and EDT are multisectorial companies (transport, industry, agriculture, etc.) whereas ISAGRI, ADHERENTS.COOP and CRA RhôneAlpes are dedicated to agriculture. The second part of the surveyed companies belongs to the agricultural value chain: milk producer (FDCL 25-39), milk or vegetables processors (respectively Lactalis and CECAB d’Aucy), cereals and agricultural supplies retailer (AREA) and milk processor and retailer (Sodiaal). The interviewees are mostly company managers or Information System / sectorial managers. Some of them are experts in electronic data interchange (EDI) especially in ICT solutions provider companies. The others are rather trades people. Overall, the downstream of the agricultural and food sector is pretty well covered by EDI not only in business exchanges as invoices, dispatch advices and delivery notes, but also for product traceability (mostly intern traceability). Upstream, data exchanges on traceability of primary production are limited. The implementation of EDI is only at the “thinking stage” for companies wishing to invest in ICT to increase their productivity and competitiveness. Example of possible exchanges with the upstream of agricultural sector: • •

Traceability of crops (e-daplos) for fruits and vegetables producers Bills of agricultural supplies, milk pay and technical records for dairy farmers

In the interviews, the main barriers and challenges expressed regarding EDI implementation were: interoperability problems, international and intersectorial standardization, codification, development of internet in rural areas, costs of implementation (investment, Telecom). The main objectives of companies in general are an increase in productivity and an improvement of the business relationship with their business partners and their clients. Nowadays, using ICT solutions is necessarily associated with the aim of achieving these objectives. For the agricultural sector (not only), the guidelines are: • • • •

Use of ICT for traceability of agricultural products and development of services for food safety and quality. Establishment of standardised exchanges in the upstream of agriculture and food sector, at the level of primary production. Consolidation of existing exchanges for business Keeping on developing and harmonizing technical references through coordination or participation in dedicated working groups.

XII.1.2 Germany 1. Brief characterization of the interview sample (types of companies/organisations interviews, their representativeness, profile of functions within the companies that were presenting their views, etc.)

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In Germany mainly ICT providers, some processors of the three target food supply chains and relevant industry associations were addressed. The stakeholders were selected due to their expertise in this area. The interviewed persons were either persons involved in implementing data exchange or responsible for the quality management. 2. Reality of data exchange systems and e-business conditions along the value chain (i.e. differentiated depending on the stage of the value chain) For Germany - due to the low number of interviews done - only a trend is given for data exchange systems and e-business conditions. The interest in electronic data exchange is growing in the food supply chain. This is mainly triggered by the demand of customers (market pressure) to save time and money in the purchasing process. Therefore the most interesting projects are linked with the product (e.g. electronic catalogues, e-invoicing and traceability criteria). 3. Main barriers and challenges identified In Germany the main barriers are fears due to confidentiality, data integration into ERP, resistance to organisation changes, and legal & tax complexities. Especially the last point is related to the huge differences in data protection rules and documentation requirements. 4. Projects and plans for the future – summary of trends In Germany the following growth promoters were identified: further development of the Internet, the influence of standardization organisations (namely GS1), the establishment of a network of user companies and more efficient procurement process for companies. 5. Future outlook based on the interviews conducted It is necessary to enhance trust in the food supply chain among all stakeholders for the electronic data exchange. Trust is the basis for more efficient cooperation and business operation. Another important issue is the definition of wording along the food supply chain (e.g. sustainability). Only if we understand the same content in the needs and issues of the food chain we may facilitate the electronic data exchange. Last but not least the politicians shall harmonize the requirements for the documentation which is needed for the data protection within the EU. But the “confidentiality fears” of companies should be kept in mind. 6. Main conclusions/lesson for the framework development Interestingly, stakeholders declared that all standards and technologies for the data exchange are available. We need the interfaces and links to connect all standards in a more efficient system. Traceability in times of crisis (food safety & security) as well as the integration of “sustainability data” (use of resources) along the food chain are important for the further data integration. ,Especially the capabilities of micro and small companies with regard to ICT have to be enhanced.

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XII.1.3 Greece 1. Brief characterization of the interview sample (types of companies/organisations interviews, their representativeness, profile of functions within the companies that were presenting their views, etc.) Two companies have been interviewed in Greece: DIMITRIAKI and KAPLANIDIS. Dimitriaki is a distributor and retailer of cereals, established in 1981. It has 40 employees in Greece and a turnover of 159 billion€. Its President was interviewed. Kaplanidis is a processor of cereal derived products: flour production, bio functional foods, biological flours, bakery, semolina products and traditional pasta. It is a 35 year old company. Its President was interviewed. 2. Reality of data exchange systems and e-business conditions along the value chain (i.e. differentiated depending on the stage of the value chain) Those two companies, involved in high quality production (ISO22000 certification, organic certification…) do not use data exchange systems, but would like to. In general in Greece, most exchanges are done by phone and paper. Only few companies already use ICT solutions. 3. Main barriers and challenges identified Problems of affordability and absence of fibre network seem to be the most important for the development of ICT solutions. Policies should help companies by financing measures tailored to the business requirements.

XII.1.4 The Netherlands 1. Brief characterization of the interview sample (types of companies/organisations interviews, their representativeness, profile of functions within the companies that were presenting their views, etc.) •

Cooperatives / Producer Group: Cooperatives of Dutch growers which also are traders & packers (or even processors) in Fruits& Vegetables.

ICT Solution Providers: ICT Solutions Providers which are active in the Horticulture Industry or even other agro-food sectors like dairy, cereals and meat industry (logistics service providers, traders, packers & retailers).

2. Reality of data exchange systems and e-business conditions along the value chain (i.e. differentiated depending on the stage of the value chain) • Cooperatives / Producer Group From Cultivation/Crop Message to ERP & WMS systems. From the grower to the selling of Fresh Products to customers (retail stores, traders, packers). •

ICT Solution Providers

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The whole chain. Mainly ERP & WMS or other systems for traders & cooperatives. From Producer Group to the selling of Fresh Products to the consumer. 3. Main barriers and challenges identified • Cooperatives / Producer Group Barriers  Few traders use standards  Different (use of) standards with different customers. Specifically with customers outside the Netherlands.  Also, use of different solutions for basic identifications within different standards, is a problem  Especially insufficient knowledgeable resources. Challenges • Traditional Demand & Supply Messaging • Modernization of business procedures require additional efforts in ERP systems • Specific Fresh Fruits& Vegetables Messaging (eLab (Residuals, Cultivation) • VMI in development (process where the vendor creates orders for their customers based on demand information that they receive from the customer. One of the benefits of VMI is that the vendor is responsible for supplying the customer when the items are needed. This removes the need for the customer to have significant safety stock. Lower inventories for the customer can lead to significant cost savings).

• •

Roll out SSCC labels and DESADV messages to all Dutch & International clients (Dutch retailers ask traders & Producer Groups to implement these GS1 standards) To implement (fast moving) new technologies in a proper way.

 ICT Solution Providers Barriers • Lack of knowledge and expertise • Lack of collaboration in the supply chain and between solution providers • The visibility and cooperation between customers and suppliers. • Lack of standardization rules • Data quality • Integrators that can connect to “all” systems. Standards are already there, the difficulty is to accept and use them. • The economic situation, where lots of SME’s don’t have the (financial) possibilities to set the next step to SCM • Lack of (strategic) skills at the entrepreneur level. Challenges • Simplicity for end-users. More (and simpler) integration between various SMEs and thereby lowering cost and turnaround of doing business. • Data integration and standardization and thereby simplification of the overall package and process by using new techniques (portal) and shift work (order entry) to supplier and customer. • One standard • Clear information

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Not only focus on standardization of messages but also on standardization of business processes

4. Projects and plans for the future – summary of trends  Cooperatives / Producer Group A successful implementation of a new ERP-system, without losing some of the solutions of the old system.  ICT Solution Providers A successful implementation of a new ERP-system, without losing some of the solutions of the old system. 5. Future outlook based on the surveys conducted  Cooperatives / Producer Group Data integration into ERP is getting more & more important.

• •

• •

• ICT Solution Providers Various EDI (retailers) and Portal integration (suppliers) solutions. Various standardised communication protocols i.a. with Customs solutions and shipping companies as a result from the implementation of more and more processes in-house. More integration but thereby staying flexible and mobile. Movement towards ‘The Cloud’. The information exchange between growers and processors can be improved by making use of Portals and Mobile devices which make the data recording, data exchange and data capturing in the ERP system much more efficient/effective. Data interchange services / hubs. Applications for mobility. Requests, orders, confirmation of deliveries, invoices etc to be used in hand-held devices.

6. Main conclusions/lesson for the framework development       

Cooperatives / Producer Group Too less traders use standards Different (use of) standards with different customers. Also, use of different solutions for basic identifications within different standards Insufficient knowledgeable resources. ICT Solution Providers Further standardizing processes, information requirements and information flows will simplify and reduce the cost of integrating growers and traders or/and processors. This will result in a larger adoption of such solutions in the market Electronic trading systems based on standard XML messages. The use of open standards and open data by the governmental organisations in their communication with the business.

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XII.1.5 Poland The surveyed Polish companies represented cereal and other business sectors. Their market location was mainly national with some operating on European and third countries markets. Their position in the value chain was differentiated, from producer position throughout processor, distributor / logistics service provider and retailer positions ending on supplier of services/ equipment and materials position. The business partners of the companies we surveyed were not only local (80% of cases), but also national and international (60%). As main problems / barriers with regard to projects implementations the responders listed the following items:  Potential customers still insufficient  Lack of equipment from partners  Financial investment costs However, difficulties in the integration with the management systems, compliance with procedures, resistance to organisation changes and development time were also mentioned as other problems in the projects implementation. As a main growth of promoters of the digital supply chain the responders listed internet development, decrease of telecommunication costs, increased technological performances, strategic positioning of e-commerce by certain companies, as well as increase of telecommunication network use. Since in Poland both the number of survey respondents and surveyed companies were rather limited, and in order to complete the picture of Polish reality, the results of the external research are also quoted here. The research was conducted in 2009-2010 by the Agriculture University in Warsaw by dr Tomasz Ząbkowski and dr inż. Piotr Jałowiecki. The research focused on ICT solutions in logistics of agro-food small and medium enterprises. The research covered the companies operating in the agro-food processing sector. From 10.000 requests for filling-in the questionnaires the authors of the research had received 507 responses from the companies representing the bakery sector (42%), meat processing (23%), production of other food (9%), flour-milling sector (8%), fruits and vegetables processing (6%), dairy sector (5%), feed sector (3%) and oils and fats production (1%). Based on the conducted research, the authors concluded that the scale of using ICT solutions to support logistics activities of the companies was rather limited (small), despite the increasing requirements on food quality, traceability and supply chain of the organisation. From the results of the survey the authors concluded that the main barrier could be the insufficient knowledge level of responders regarding available ICT solutions supporting logistics and possibilities of those ICT solutions. The outcomes of the eFoodChain interviews prove the above mentioned results of the study by dr T. Ząbkowski and dr inż. P. Jałowiecki on ICT solutions in logistics of agro-food SMEs. It can be concluded that the scale of adoption ofICT solutions in B2B data exchanges as well as automatic electronic processing of messages in the small and medium agro-food companies in Poland is still rather limited.

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XII.1.6 Portugal 1. Brief characterization of the interview sample The agro-food actors surveyed in Portugal included several associations of producers and producers’ cooperatives, specialized research centres, representatives of the processing industry, service providers to the sector, a certification entity, as well as actors positioned at the very end of the supply chain, including the biggest Portuguese retail group. The sample included therefore a mix of companies, representing not only different positions in the supply chain, but also a wide range of company dimensions and backgrounds. The general management was interviewed, in most cases of SMEs, and for larger entities their structure allowed to interview persons specifically linked to the issues in question, including logistics and ICT directors. 2. Reality of data exchange systems and e-business conditions along the value chain Electronic and automated data exchanges at the beginning of the supply chain (close to the “farm”) are practically non-existing in Portugal. The majority of the agro-food producers are still traditional small producers, among which the adoption of ICT is very low and where the cultural background and resistance to changes, combined with lack of resources, skills and investment do not facilitate the modernization of current data exchange practices (mostly manual and paper-based, but also already in some extent using mobile phones and SMSs). Producers collaborating in cooperatives and other forms of associations seem to be more open to apply new ICT solutions, but such innovations are usually initiated with a top-down approach and still meet barriers in execution. Producers ‘organisations already have their own information management system, where the information from the individual producers is manually introduced, and to some extent already exchange electronic business messages with big retailers and distributors. However, these messages do not cover all types of information, but are exclusive to financial related information (order, invoice, etc.). This structured exchange of electronic messages is mostly supported in EDI and integrated with the producers ‘organisation information management system. While moving upwards in the supply chain, the level of adoption of digital data exchanges increases, resulting to great extent from the requirements imposed by the distribution and retail sector. But again these are limited to financial related information. Automated systems are most commonly used for orders and payments, but even the most advanced cases barely implement EDI for a full spectrum of business messages. Therefore, there are still numerous scenarios that are not digital, neither harmonized among stakeholders. The examples of such gaps where the interviewees recognize the need for improvement and foresee significant gains from the optimization of data exchanges include: logistics processes (incl. interaction with logistics providers), various types of certification procedures and reporting towards authorities. Looking at the service providers and integration with the authorities, a huge gap is recognized. The need to provide different information to several authorities – for traceability, certification and even financial support – creates a big burden on several players in the supply chain, but mostly at the level of the producers and producers’ organisations. There are also recognized

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benefits in the exchange of specific logistics messages (for example, dispatch advices) since this information would allow the optimization of not only the transport, but also of the reception of the goods, with a significant reduction of costs. 3. Main barriers and challenges identified Barriers  Insufficient sensibility / recognition of (potential) benefits  Cultural barriers  Technological “delay” and resistance to technology among small players at the beginning of the value chain (small producers, who are still dominant in Portugal)  Relatively low rates of collaboration among agricultural producers  Lack of investment capacity among many actors and lack of critical mass to justify an investment in electronic data exchanges  Lack of skills Challenges  Awareness creation  Support for implementation  Modernization of technological base among small agro-food actors  Simplicity and relatively low costs  Harmonization with existing solutions  Cultural and administrative setting 4. Projects and plans for the future – summary of trends    

Implementation of web portals to exchange information with business partners (unstructured, manual) Use of RFID tags for inventory management and logistics optimization Implementation of EAN128 codes (mandatory in the relation with retail) Implementation of logistics messages (retail) 5. Future outlook based on the interviews conducted

Further optimization of logistics processes through better data exchanges is crucial for some companies. Data integration into the company’s own systems is also gaining importance. Efficiency gains and simplification of certification processes (so frequent in agro-food industry) would be another much appreciated added value by companies. Further standardization, information requirements and automatic information flows will simplify and reduce the cost of numerous business processes, improving the quality of services and reducing errors at the same time. 6. Main conclusions/lesson for the framework development The interviews conducted in Portugal allowed to gain a better understanding of the current landscape that is characterized by a huge gap in the use of electronic data exchange: almost

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inexistent at the producer level and almost full used at the retail side. But even at the retail side this is limited to financial related information. Food safety and certification processes, with several standards being used demanding for different but overlapping sets of information, are mostly done manually with a few exceptions of some web platforms. Some pilot experiments have also been conducted by ICT service providers to integrate logistics processes in specific sectors. The main challenges and trends identified in the interviews point in the direction of further developments in EDI support for information related with logistics, safety and certification processes. There is currently a growing awareness of the benefits associated with more and better integration which the eFoodChain project can take advantage of. Several possible pilots have already been identified, some of them involving cross border messages exchange, and will be further explored in the upcoming months. XII.1.7 Spain 1. Brief characterization of the interview sample (types of companies/organisations interviews, their representativeness, profile of functions within the companies that were presenting their views, etc.) Companies interviewed were at the level of production: one farmer, one owner of several farms and one producers’ group. The last one is from the sector of fresh fruits and vegetables whereas the two others are from livestock farming. 2. Reality of data exchange systems and e-business conditions along the value chain (i.e. differentiated depending on the stage of the value chain) The companies surveyed don’t use electronic Exchange of data. They explain that at the level of production, these technologies are very rarely used. They use it principally for the exchange of data with administration (social security, banks). For other exchanges, the phone is still the most common used means of data exchange. Anyway, companies using computers have quite often an ERP, and would like that future ICT solutions were integrated with it. 3. Main barriers and challenges identified, projects and plans for future – summary of trends Lots of difficulties appear to these companies in relation with the implementation of an ICT solution. In general, they stress problems in relation with formation and training. They accord to say that there is a cultural gap between producers and downstream, which have to be crossed before developing ICT. The lack of specialized personal is crucial. They also insist on the importance of integration of ICT solutions with ERP. The two main projects quoted in the survey are the implementation of an E-catalogue and the development of an EAI. Yet, the development time is identified as a major problem, and some fears due to confidentiality still remain. 4. Future outlook based on the interviews conducted: main conclusions/lesson for the framework development

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Given the low level of adoption of ICT solutions among producers, the problem of training and support is important to enhance the use of ICT. Producers’ groups wish to develop these technologies, but would need a real support, especially by financial support. This would allow them to get software but also to train employees or to recruit specialized people.

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XII.2 Characterisation of the supply chains Fresh Fruits and Vegetables In the fresh fruits and vegetables sector, producer organisations have an important role in the interface between producers, agro-food processors and retailers. In terms of information exchanges and B2B communication, producers mostly communicate with these “interface cooperatives�. In general, the adoption of ICT in B2B transactions by companies representing the upstream is very low. Currently, the few information exchanges which exist between producers and cooperatives are linked to financial purposes. However, the demand for high quality products from the customer has led to important developments in track and trace messages (traceability). To sum up, there is a reduced use of ICT upstream to the processing and distribution at the level of production. To fill this gap, four kinds of needs were identified regarding the dematerialization of exchanges : - To strengthen the traceability exchanges between producers and cooperatives (B2B communication) - To implement the dematerialization of invoices between cooperatives and farmers: einvoicing (B2B communication) - To be able to transmit data of farms (sustainable farming) - To implement production and product certification information exchange with service providers and authorities (B2B and B2G). If the processor is a cooperative, data can be exchanged with producers and/or retailers. If the cooperative sells its products directly to final customers, the nature of the exchanges moves to B2C communication. In this case: - Exchanges with producers (B2B) are the same that those described previously (producers part). - Exchanges with retailers (B2B) are rather business and logistics messages (orders, invoices, dispatch advices, etc.) - In the case of direct sales to customers (B2C), mandatory information must appear on labels. Here, needs are less important than for producers. Nevertheless, the identified needs regarding the dematerialization of exchanges between processors and partners are: - Traceability from producers and to industry - Improving financial exchange with processor customers - Improve exchange with service providers (certification, lab tests) In terms of information exchanges and B2B communication, retailers mostly communicate with their suppliers (processors, cooperatives, etc.) and they are also brought to communicate with final customers (B2C in case of direct sales). In general, ICT are well used in B2B transactions by companies representing the downstream for business and logistics messages (orders, invoices, dispatch advices). Some retailers also exchange traceability information with their suppliers associated with requests of proposal. In the case of direct sales to customers (B2C), mandatory information must appear on labels. As mentioned in the industry, needs are less important than for producers. Yet, the identified needs regarding the dematerialization of exchanges between processors and partners are: - Traceability from producers to retailers - Improving financial exchange with retailer customers

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Dairy Products In the dairy products sector producer organisations have an important role in the interface between producers, agro-food processors and retailers. In terms of information exchanges and B2B communication, producers mostly communicate with these “interface cooperative�. In general, the adoption of ICT in B2B transactions by companies representing the upstream is very low. Currently, the few information exchanges which exist between producers and cooperatives are linked to financial purposes. To sum up, there is a lack of ICT use upstream to the processing and distribution at the level of production. To fill this gap, four kinds of needs were identified regarding the dematerialization of exchanges: - To strengthen the dematerialization of invoices between cooperatives and farmers: einvoicing (B2B) - To implement the dematerialization of the quality analysis results (B2B) - To implement the traceability exchanges between producers and cooperatives (B2B) - To implement the exchange of laboratory testing and quality data (B2) If the processor is a cooperative, data can be exchanged with producers and/or retailers. If the cooperative sells its products directly to final customers, the nature of the exchanges moves to B2C communication. In this case of a "cooperative manufacture ": - Exchanges with producers (B2B) are the same than those described previously (producers part). - Exchanges with retailers (B2B) are rather business and logistics messages (orders, invoices, dispatch advices, etc.) - In the case of direct sales to customers (B2C), mandatory information must appear on labels. - Exchange with producer and laboratories of quality results data (B2C, B2B). Here, needs are less important than for producers. Nevertheless, the identified needs regarding the dematerialization of exchanges between processors and partners are: - Traceability from producers and to industry - Improving financial exchange with processor customers - Improve exchange with service providers (lab tests) In terms of information exchanges and B2B communication, retailers mostly communicate with their suppliers (processors, cooperatives, etc.) and they are also brought to communicate with final customers (B2C in case of direct sales). In general, ICT are well used in B2B transactions by companies representing the downstream for business and logistics messages (orders, invoices, dispatch advices). Some retailers also exchange traceability information with their suppliers associated with requests of proposal. In the case of direct sales to customers (B2C), mandatory information must appear on labels. As mentioned in the industry, needs are less important than for producers. Yet, the identified needs regarding the dematerialization of exchanges between processors and partners are: - Traceability from producers to retailers - Improving financial exchange with retailer customers

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Cereals In the cereals sector, cooperatives play a key role of interface between producers, agro products processors (milling, biofuel, etc.) and retailers (cereals, seeds distribution, etc.). In terms of information exchanges and B2B communication, producers mostly communicate with these “interface cooperatives�. In general, ICT are not very well used in B2B transactions by companies representing the upstream. Currently, the few information exchanges which exist between producers and cooperatives are linked to traceability of plots and agricultural products (inputs, pests, etc.). To sum up, there is a lack of ICT use upstream to the processing and distribution at the level of production. To fill this gap, three kinds of needs were identified regarding the dematerialization of exchanges : - To strengthen the traceability exchanges between producers and cooperatives (B2B communication) - To implement the dematerialization of invoices between cooperatives and farmers: einvoicing (B2B communication) - To be able to transmit environmental data of farms (sustainable farming) If the processor is a cooperative, data can be exchanged with producers and/or retailers. If the cooperative sells its products directly to final customers, the nature of the exchanges moves to B2C communication. In this case of a " cooperative manufacture ": - Exchanges with producers (B2B) are the same than those described previously (producers part). - Exchanges with retailers (B2B) are rather business and logistics messages (orders, invoices, dispatch advices, etc.) - In the case of direct sales to customers (B2C communication), mandatory information must appear on labels. If the transformer is a private company, in terms of B2B communication, data can be exchanged with suppliers (producers/cooperative) or retailers. In case of direct selling to final customers, the nature of the exchanges moves to B2C communication. In this case of an independent retailer: - Exchanges with cooperatives / producers (B2B) are linked to products traceability within the framework of production contracts and to products sales (invoices, orders, etc.) - Exchanges with retailers (B2B) are rather business and logistics messages (orders, invoices, dispatch advices) - In the case of direct sales to customers (B2C), mandatory information must appear on labels. Here, needs are less important than for producers. Nevertheless, the identified needs regarding the dematerialization of exchanges between processors and partners are: - Traceability from producers and to industry - Improving financial exchange with processor customers In terms of information exchanges and B2B communication, retailers mostly communicate with their suppliers (processors, cooperatives, etc.) and they are also brought to communicate with final customers (B2C in case of direct sales). In general, ICT are well used in B2B transactions by companies representing the downstream for business and logistics messages (orders, invoices, dispatch advices). Some retailers also exchange traceability information with their suppliers associated with requests of proposal. In the case of direct sales to customers (B2C), mandatory information must appear on labels.

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As mentioned in the industry, needs are less important than for producers. Yet, the identified needs regarding the dematerialization of exchanges between processors and partners are: - Traceability from producers to retailers - Improving financial exchange with retailer customers

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XII.3 Results from the interactive exercise in the validation workshop The methodology used to conduct this market analysis included a workshop with relevant stakeholders and experts. The eFoodChain workshop, hosted by the European Commission on the 9th of July 2012, was an additional opportunity to consult relevant stakeholders and experts and validate the findings obtained from other sources. An interactive exercise was conducted during the workshop, with the purpose to validate the findings of the analysis conducted by the consortium and get further inputs from the participants. Whit this in mind two sets of posters were placed in the coffee break area: three posters with main challenges, drivers and solutions for adoption of ICT for B2B transactions, and another three posters with the simplified representation of the supply chains from the target sectors of the study (Fresh Fruits and Vegetables, Dairy Products, and Cereals). The participants were asked to select the challenges and drivers they considered more important (each participant had 3 stickers to vote in each poster) and to classify the solutions in terms of importance and complexity of implementation (each participant had 6 stickers, 3 red and 3 green). The final result of the exercise was already summarised in V.1.5 and the posters are in Figure 40, Figure 41 and Figure 42.

Figure 40: Poster with the challenges prioritized

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Figure 41: Poster with the drivers prioritized

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Figure 42: Poster with the solutions classified (green - importance/impact; red – complexity of implementation)

Regarding the supply chains, the participants were given 9 stickers (3 for each sector) and were asked to identify the locations in the supply chain where the adoption of ICT for B2B transactions can have a greater impact. The final result of the exercise is presented in Figure 43, Figure 44 and Figure 45.

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Figure 43: Priorities in the Fresh Fruits and Vegetables supply chain

Figure 44: Priorities in the Dairy supply chain

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Figure 45: Priorities in the Cereals supply chain

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Seamless eBusiness Environment

Fully Integrated Digital Supply Chain

Smart Use of ICT


Market Analysis Report

Contacts for further information:www.efoodchain.eu| info@efoodchain.eu

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Efoodchain project: Market analysis report, august 2012.