Shruth: 40% of the world's food eventually rots or is wasted

The 16th China Chain Store Conference and the 16th China Chain Store Exhibition (2014 CHINASHOP) sponsored by China Chain Store Association were held in Fuzhou on November 6-8, 2014. 40 percent of the world's food ends up rotting or wasted, said Robert Schruth, president of North Asia for United Technologies Building and Industrial Systems.

The following is a transcript:

Shruth: Good afternoon, ladies and gentlemen! Here I would like to introduce a part of the retail industry supply chain, especially the cold chain. well, from the speech just now, we can see that cold chain is a very important topic for us. If you look at some of the photos on our screen, it's very clear that this is what we expect to see when we enter a retail store, whether it's Wumart, Jiajiayue, McDonald's, it's commonplace for modern retail stores, they should provide us with a variety of meat, vegetables, fruits, and make sure the food is fresh and safe. But we may not realize that the apples we buy come from farms on the other side of China, the cherries may come from the United States, and the kiwis from new Zealand. It takes skill to transport these diverse fresh fruits to retail stores. How to keep these foods fresh after they arrive at the store requires some higher technology content.

But whether all food is like this picture behind me is one of the challenges of the food supply chain. Even with all the technology we have today, 40 percent of the world's food still ends up rotting or being wasted instead of reaching consumers. Obviously, this figure is very alarming. Food waste is not only a social problem, but also a great harm to our environment. At the societal level, reducing waste could solve global hunger. One in eight people on Earth goes hungry every day, and the world's 875 million people can solve this problem by trying to prevent things from rotting. From an environmental point of view, there are two things that have to be taken into account. The first is that agriculture consumes 70 percent of the fresh water on the planet and emits 14 percent of the greenhouse gases, and if we do the math very quickly, we can find that 40 percent of the food wasted is equivalent to 3.3 billion tons of greenhouse gas emissions, as shown in the graph. In fact, the wasted food is a country that emits greenhouse gases, making it the world's third-largest emitter after the United States and China.

Even though we know what the problem is, we still allow 40 percent of our food to rot or go to waste. Then there are the growing challenges facing the food supply chain, and another problem is urbanization. In 2009, for the first time, the global urban population was equal to the rural population, and since then 65 million people have migrated from rural to urban areas every year. China, for example, will have an urban population of more than 1 billion by 2030, which means that 300 million people will migrate to cities in the next 15 years, which is equivalent to the total population of the United States. It is clear that urbanization is good news for our retail industry, and more and more people will move away from food sources, making food transportation a more challenging topic.

Now let's look at the complexity of the supply chain. We all know that food comes from the field or the place where it's grown. Once it's harvested, processed and packaged, it's loaded into frozen vehicles and sometimes sent to local markets. But a lot of vegetables or fruits are sent to the port for export, food is put into frozen containers at the port, the transportation process takes days or weeks, the destination food is loaded into cold storage for distribution, the food is sent to the supermarket by truck or minivan, and finally placed in the freezer, all of which require technology. We know that today's technology can help us improve the efficiency of our cold chain, reduce food transport wastage with more energy-efficient products, and avoid unnecessary emissions.

Let's take a moment to talk about our company, what kind of role our company plays in the whole food supply chain. Our company is United Technologies. We have two main businesses at United Technologies. One is aviation business, like Pratt & Whitney manufacturing and micro-repairing aircraft engines, and Simon is also manufacturing helicopters for the civilized world. Aviation Systems manufactures a variety of components, and another business I am responsible for focuses on urban environments, especially in upgrading buildings and cold chain technologies. Our brands include Otis Elevator, Air Conditioning and Refrigeration, the leading brand Kelly, Kelly in China through long-term and Qingdao Haier. Our business is diverse and the sustainability mindset that runs through the company is energy efficient. We insist on economic and environmental sustainability. We use technology like this to make it more environmentally friendly. Now we have a technology to remotely control the oxygen and carbon dioxide concentrations in containers, to make the ripening of food in containers slower. Some foods that can't withstand long-distance transportation can be distributed farther. It takes three months to transport bananas from Ecuador to Europe and even longer to Asia. All of this allows us to make sure that from the farm all the way to our shelves, the whole process is controlled under very strict conditions, giving food insurance.

At the same time, we also have container refrigeration technology, which can effectively reduce the carbon footprint of the cold chain, which can reduce the carbon footprint of containers by up to 35%. Okay, now I'm going to talk about the last link in the food cold chain, which is the retail store. Then in a retail store, once the food reaches the store, the retailer must pay attention to the following points, one to ensure that the food is fresh, the second display is enough to attract customers to buy. Third, in the case of the above two points, taking into account the operating expenses, 40% of the total energy consumption of the supermarket is spent on the refrigeration system. So HVAC and refrigeration systems can save money, have an impact on the environment, and affect business profits. Using carbon dioxide as a natural refrigerant for stationary equipment, businesses can use up to 35 percent of their energy consumption. The system can be used not only for refrigeration, but also for air conditioning and heating in stores. Speaking of energy efficiency, we have recently developed technology that integrates HVAC and refrigeration into a single system. This can help businesses cut energy consumption by 40% while reducing their computer room footprint by up to 50%. This way, merchants can use the time saved to display more products.

In terms of product display, store managers often face the dilemma caused by the contradiction between energy saving and commodity display. No merchant is willing to install glass doors on the display cabinet, but the existing technology has been able to increase the storage capacity of the open display cabinet by 40%, while the display area is increased by 10%. Energy consumption is reduced by 10%. Tests have shown that display cases using this technology can achieve Chinese class I energy efficiency, because we have now realized that we see a lot of stores, and now the format is getting smaller and smaller. Therefore, the challenge of displaying products is getting bigger and bigger, so our technology becomes more and more important and valuable in such an environment. Finally, let me give you an example of our customer in China. In 2012, we installed this energy-saving system for an international chain store in Ningbo, helping customers save up to 25% of their expenses and avoid more than 15000 tons of greenhouse gas emissions. We know that cost reduction is a very important part of the supply chain, and for such customers, the annual energy savings are very considerable. It is worth noting that about two-thirds of large supermarkets in western europe use carbon dioxide systems, but stores like ningbo in china use the same carbon dioxide system. So we hope to be able to spend more effort in the future to promote the universal use of this technology in the country.

Finally, we know from past experience that through technology, appropriate education and a joint commitment with suppliers and retailers, we can improve our cold chain, thereby significantly reducing food waste and reducing energy consumption. So in general, I am very grateful to the China Retail Association for inviting us to this conference, and I am also very happy to congratulate the conference on its success this year. Okay, thanks!