Artificial intelligence (AI) could have an increasingly vital role in produce procurement.
Few markets move faster than produce. What is a delicious, enticing and, above all, valuable piece of tropical fruit one morning could, by the next, be quite literally a pile of rotten garbage.
A lot has been done throughout the agricultural sciences over the centuries to lengthen the amount of time fruit varietals stay edible.
This is also true in the logistics sector. Thanks to modern techniques, cold chains and complex shipping networks can get a fresh picked tomato from the south of Spain to the north of Sweden before its leaves start to wilt. However, procurement—especially when it comes to produce—is fundamentally about balancing the cost of a product with the quality that can be attained within the regulatory, environmental, and physical contextual constraints of the market.
Produce is fast moving and complex. Increasingly, the sector also faces criticism for its environmental impact and record of abysmal human working conditions. For large scale retailers with national, or even international, footprints, produce procurement is a challenging prospect. Some CPOs believe the process is better left to the machines.
Dollar General taps AI for produce procurement
In January, US discount retailer Dollar General rolled out a new program in about 3,000 of its US stores—a pilot which would use AI to fully automate the procurement of produce.
The AI ordering system aims to “optimise in-stock levels” and replenish shelves to “fight food insecurity”. It could also save Dollar General a lot of money in unsold stock. Dollar General, which is currently being sued over allegations that it has been routinely scamming tens of thousands of customers by charging more money for items than their listed prices, made $11.9 billion in profit last year.
In Rhode Island, United Natural Foods also implemented AI as a way of automating elements of its distribution process this January. In November of 2023, grocery retailer Albertsons also announced the introduction of AI solutionss. The retail giant is using AI to automate store ordering and inventory management across its meat and seafood operations—another area with narrow margins for error with regard to the delicate balance between demand and supply.
The platform adopted by Albertsons aims to help meat and seafood teams “keep coolers and freezers light while boosting in-stock rates” using AI-powered recommendations for high-value, hyper-perishable items like fresh poultry and prefilled order quantities for slower-moving, prepackaged items such as bacon. Susan Morris, EVP and Chief Operations Officer for Albertsons also added that the platform would help “significantly reduce food waste as Albertsons continues to make progress toward our goal to have zero waste going to landfill by 2030.”
