The Future of Food Tech: Meet Our EiR
Rethinking Legacy To Longevity
🥙 Upgrading Warehouse Inventory Management
There are multiple inefficiencies in the food industry. Losses arising from a number of scenarios include the following: spillage, contamination, poor quality, failure to use within the expiry date, spoilage for other reasons, unaccounted for consumption (human error), and overstocking. However, this most often boils down to inefficient management due to a lack of reliable data. In the restaurant industry, F&B operators set aside ‘loss provisions’ to account for any unknowns that could have an impact on their forecasted food cost.
While many people know about the effects of food waste, some are still unaware of its degree of impact. To put this into context, if food wastage were a country, it would be the third-largest GHG emitting country in the world. Even small amounts of food waste add up and can drastically erode the bottom line and any profits the business generates.
But today’s rapid advancement in technology offers a solution — barcoding technology.
While barcoding has been around for many decades, it has come leaps and bounds from when it was first introduced in the 1970s. In its simplest form, barcoding is a system that assigns a unique number to any packaged product or service. In the context of the F&B industry, barcodes represent information in a form that is machine-readable which is particularly important in identifying the product during production, transportation, and distribution.
With barcoding technology, organizations have a real-time overview of their inventory that is delivered with speed and accuracy. Barcoding technology forms the essential foundation of a strong inventory management system that will enable organizations to:
- Increase organizational efficiency
- Reduce the amount of waste
- Optimize food safety
- Enhance transit and packaging processes that reduce costs
Using this technology has revolutionized the food industry, benefiting both consumers and business owners alike. Barcodes are an invaluable piece of technology for store and restaurant owners as it provides a reliable solution for replenishing popular items and identifying sources of food waste.
To gain deeper insights into the FoodTech space, we spoke to Salvatore Alaimo who joined NBT’s EiR program in February 2021.
🚀 The NBT EiR Program
Next Big Thing AG is on a bold journey to empower a more prosperous, sustainable, and democratized world that’s fueled by impactful solutions.
Our four-month EiR program is a gateway into this new world of technology aimed at getting you — the future founder — started on your company-building journey.
If you’re curious to know more about this program from founders who have lived the experience, this recent retrospective article highlights success stories from our very first EiR Cohort.
Take a look here 👇
What matters to you, inspires what we do.
🦸♂️ Meet NBT’s EiR: Salvatore Alaimo
Salvatore, please could you tell us about your background and professional experience?
I’ve always been passionate about technology, sports, and food. However, during high school, I got more deeply into probability games, financial market readings, and films.
I attended Bocconi University, where I earned my Master of Science degree and also took part in an exchange program at Schulich School of Business — York University in Toronto. I really enjoyed this experience for many different reasons but mostly because it opened my mind to more diverse patterns of thought.
After I graduated, I found myself in a very tough job market because of the EU financial crisis. However, I eventually landed my first job in sales and trading in Milan. After that, I moved to Futex, a prop trading fund, in London. Much of my time was spent doing active trades, often speculating on different global markets and events. But after a while, I became tired of merely speculating. I felt disconnected from the ‘real’ economy. Making money has never been my main reason for joining a company. It was here that I realized that I’m much more attracted to change and innovation that positively impact people and the economy.
I soon found myself back in Sicily on vacation with a friend where we enjoyed good cheese and wine. We fell in love with those products and their artisan philosophy and spontaneously began discussing the launch of a food startup. This is how Made al Sud came to be where I worked for about 6 years. We experienced many failures and successes, but we built it all on our own. However, during Covid-19, my job became too repetitive and stagnant in certain aspects. For the first time ever, I thought my job was not able to satisfy my ambitions anymore. Furthermore, Covid-19 proved that no sector could expect to efficiently work without the help of technology. I tried to share this view with my partners and to give a more innovative perspective to Made al Sud but they didn’t agree with my vision. As a result, I decided to look for something more challenging and innovative and came across NBT’s EiR Program. I knew that this was it — the perfect place to realize new ideas with real-world impact.
Why did you decide on Berlin?
I could name a bunch of reasons, but I’ll tell you what I said to an uncle of mine on a postcard the first time I visited the city. Berlin is a unique contrast between old and new. Monuments and historical buildings show signs of grave wars and divisions that for years interested the world. But the thing that struck me most is the strength and courage of its people, who were able to rebuild something more glorious and powerful than their gloomy past.
Berlin has learned from its history and embraced diversity and innovation as an outlook for the future. Its culture is attractive, sharp, and captivating. Berliners are lively and forward-thinking who challenge existing norms and constantly restyle places, products, and systems. Often, you’ll be having a casual drink with a group of people when you suddenly find yourself in the middle of a conversation on how the city can be further improved. Personally, I think that this is the main reason it keeps attracting people from around the world, even more so than its economic appeal. Berlin invites you to keep coming back before one day maybe convincing you to call it home.
💼 Understanding the Business Case
What challenges currently exist in your industry and how does your business case aims to solve them?
Inventory management is a crucial element for many businesses, but it is particularly important for F&B (Food and Beverage) operators. Inefficiencies in inventory management are drying up significant resources for several reasons:
- It’s expensive. If a company spends too much of its money buying stock, it can’t use those funds elsewhere. For restaurants, shops, and distributors, food costs typically range between 25% to 40% in relation to other operating costs. Experts argue that the optimal range should be around 20% to 31% since overstocking reduces essential space and costs money.
- It’s complex. Restaurants with large menus or regular menu changes can lead to inventory overstocking. While restaurants typically deal with between 100–150 ingredients per day, this amount can reach a much higher figure — around 25000 or more — for distributors and supermarkets. In addition, consumer behavior can change at any given moment and products can expire if not properly stored or purchased within a given timeframe. Overstocks often push owners to sell at a discount, which lowers margins and profits. Holding excess inventory is as damaging as shortages since not all customers are served the products they desire which result in businesses making less money from both sales and excess stock.
- It’s inefficient. According to Benchmarking Warehouse Performance, less than 30% of warehouses are considered to be ‘efficient’ and only 30% of the 600,000 warehouses in the US have a WMS system installed.
- It’s wasteful. On a global scale, more than 30% of all food produced is ultimately lost or wasted through inefficiencies in the food supply chain. In developed countries, waste mostly happens during the final stage of the supply chain with end-consumers throwing away food that was purchased but not eaten. Contrast this with developing countries where the bulk of food waste occurs in the early stages of the supply chain during production, harvesting, and distribution. In the restaurant industry, leftovers are not the only reason for waste. Over-ordering, over-production, and spoilage of both raw and prepared ingredients contribute to waste with estimates suggesting that 10% of food purchased ends up in the bin. Further to this point, consumer-facing businesses in the US are responsible for 40% of total food waste. Although regulators have been quite active in the last decade in promoting different ways to reuse food waste, results have been far from satisfying.
- It’s poorly managed. Poor inventory oversight ends up draining significant organizational resources. Warehouse operations are dependent on employees who play a critical role in manually placing orders, barcoding, and later conducting a periodic inventory audit. This accounts for inventory mismanagement through human error. To further illustrate this challenge, let’s imagine a restaurant. The warehouse manager manually tracks inventory on paper, before eventually uploading the data to software. However, much of this responsibility often falls onto the shoulders of the chef and his team, who oversee replenishments. This represents a significant time cost for the chef, who was originally employed to prepare and cook food, and instead now has to visit warehouses to determine stock availability. Furthermore, inventory checks need to be done at very specific times of the day. So, the chef who is now responsible for inventory checks works longer hours beyond their original scope of work, costing the organization more. This is a lengthy process because the chef will need to submit a request for the F&B director’s approval, who then, after an additional few checks, will send the request to the purchasing manager to complete the order process. This communication process takes time and is either written on paper, in Excel, or in an email. Most of the time, these orders are written down so that there is a record of it, however, the piece of paper which contains all of the important information is often lost.
It comes as no surprise that the stats aren’t pretty. Around 60% of restaurants don’t make it past their first year and 80% go out of business within five years. The average profit margin for a restaurant is only 6.2%. Such a slim margin isn’t the best risk-reward opportunity for a highly competitive market. Nowadays, a ‘gut feeling’ and ‘experience’ aren’t sufficient for accurate inventory management. This can be augmented by automated and predictive data analytics.
In order to increase warehouse performance, it’s imperative to limit human contribution so that errors can be minimized. Businesses are being forced to improve their supply chain processes to reduce inventory costs and enhance customer service levels. In today’s highly competitive food industry, a warehouse is not only stored stocks but a responsive system that manages value-adding activities. This is important in the fast-moving consumer goods industry where speed is critical and product variety tends to increase from time to time, adding another layer of complexity to warehouse operations.
As the food industry continues to encounter many inefficiencies, more restaurateurs are realizing the benefits of food tech innovation and automated systems.
Could you explain your business case in one sentence?
A WMS (Warehouse Management System) to bring greater reliability and efficiency to restaurants as a solution to minimize inventory waste and maximize profits.
Why did you decide to apply as an EiR and partner with NBT?
Next Big Thing is a well-known venture studio deeply focused on building new companies for the Machine Economy. I’m certain that IoT is going to play a growing role in the global economy and I couldn’t think of a better organization to help me develop my idea and build on my previous experience. I was intrigued by NBT’s expertise in IoT and its interdisciplinary team of engineers, venture developers, marketers, lawyers, and more. Having this incredible knowledge at my disposal will give my idea the best chance of success.
My first experience as an entrepreneur convinced me that issues are less of a challenge when you’re supported by experts that embrace your project as their own. Louise Leroy, NBT’s EiR Program Lead, made me feel like I was already part of the team during the interview process and explained just how much they invest into each EiR beyond capital. For me, there was never any real decision to make since I never had any doubt about it — NBT was the best choice.
What do you find most beneficial about working with NBT?
- Clarity: The program is well-defined with clear procedures and goals. At the same time, Simon Bernard, a Venture Developer at NBT, has always been flexible and curious to discuss possible variations or alternative proposals to select the best way forward for the project. It’s clear that the overall program methodology has been deeply studied and it offers a solid framework for venture development, however, still being open to change.
- Friendliness: Since day 1, I’ve always found the team willing to help and provide guidance. Everyone at the office is easygoing and even when I’m a little bit shy, they introduce themselves and make me feel right at home.
- Competence: Every time I’ve spoken to someone on the team about the business case, they’ve proven to be spot on with their suggestions. Discussions that initially didn’t seem very important, later on, proved to be a solution to a specific issue that I had not foreseen at the time. That’s exactly the kind of long-term strategic thinking you want when you look for advice and support.
What technologies are you most excited about for your business case?
While many people may assume the answer to be RFID technology for this solution, RFID is expensive and is less scalable since someone would need to physically go to each customer and install a sensor.
So, I would say that I’m most excited about using barcoding technology for my business case. Barcoding is still quicker and more reliable than other options available today. Not only do barcodes speed up data entry, but they also increase the accuracy of inventory records and make real-time inventory control possible. It’s also an inexpensive option and a system that most people are already aware of and familiar with.
What milestone are you hoping to achieve with NBT in 4 months?
Over the course of the next four months, I would like to:
- Validate the value proposition of the business case to ensure its success within the target industry
- Find a co-founder who can add strategic value to the project
- Gain final approval of the business case and found the company
What is one inspirational quote you live by?
“I can accept failure; everyone fails at something. But I can’t accept not trying.” — Micheal Jordan
What does the Machine Economy mean to you?
When I think of the Machine Economy, I think of a system operated by smart machines and devices which are independently carrying on different kinds of activities with little-to-no human intervention. This system is made possible by IoT and creates incredible opportunities to reduce human errors, speed up processes, and produce more reliable data systems for a fully automated and optimized future.
If you’re interested to learn more about Salvatore Alaimo, you can find him on LinkedIn.
🏁 Get Involved: Join NBT’s EiR Program
Open your mind to new opportunities and rethink what’s possible with technology.
At NBT, we empower you — the future founder — with all the necessary tools and support to make your technology dreams become a reality.
If you’re inspired to work on a new idea in the fields of Construction Tech, Proptech, Industry 4.0, DLT, Pharma, or the Machine Economy — apply to our EiR program today!
Curious to know more about NBT? Learn about us here👇
