Artificial intelligence was a foreign word until a few years ago, but now it is rapidly gaining importance. Avik Mukhija, CEO of Freshflow Ltd, a company founded in 2020, and his cooperation partner Carmine Paolino, have developed an AI-based process to increase efficiency as well as sales in the fruit and vegetable department. While the 'Smart Retail' concept is winning over more and more food retail stores in Switzerland, Germany and France, the ambitious entrepreneurs also see opportunities in wholesale.
The Freshflow Ltd founding team: Carmine Paolino and Avik Mukhija / Image: Freshflow GmbH.
To find out about possible applications and points of improvement in today's fruit and vegetable departments, the two young entrepreneurs pitched in on site at the stores. "We experienced first hand how much waste is generated at the POS. Across Europe, 15 billion euros of fruit and vegetables will end up in the garbage every year, which corresponds to a total loss of up to 50% in margins. The bottom line is that the carbon footprint of this amount of waste is equivalent to that of the entire global aircraft industry. But the extremely high markdowns are particularly negative in two respects. Not only do they put enormous pressure on the environment, but they also contribute to a significant reduction in profitability," says Mukhija.
Additionally, the concise shortage of personnel is also putting extreme pressure on the fruit and vegetable sector in particular, which is why intelligent software solutions are not just desirable but necessary, he said. "We found that the traditional auto-dispo process was originally designed for dry goods, making it unsuitable for the demands of fresh produce, such as perishability, inaccurate inventory and seasonality. This coupled with our mission to enable a smarter supply chain for the produce trade and reduce waste was the thinking behind the development of Freshflow."
What's groundbreaking about the Freshflow process is its AI-based demand forecasting and inventory and shelf life simulation - the latter of which didn't exist in this form before. "The system takes into account external factors that affect demand, such as weather, seasonality, holidays and promotions. Orders based on demand and shelf life can reduce markdowns by up to 30 percent, depending on the food retail market. This in turn has a positive impact on sales in the fresh produce department, as Freshflow reduces zero stock accordingly," Mukhija concludes.
For more information:
Avik Mukhija
Freshflow GmbH
Unter den Linden 24
10117 Berlin
Tel: +49 173 4530954
E-Mail: [email protected]
www.freshflow.ai