{"id":590010,"date":"2021-11-22T14:45:21","date_gmt":"2021-11-22T13:45:21","guid":{"rendered":"https:\/\/pulse.microsoft.com\/?p=590010"},"modified":"2021-11-22T14:45:23","modified_gmt":"2021-11-22T13:45:23","slug":"fa2-the-food-tech-company-reducing-global-food-waste-with-cloud-technology","status":"publish","type":"post","link":"https:\/\/pulse.microsoft.com\/nb-no\/sustainable-futures-nb-no\/na\/fa2-the-food-tech-company-reducing-global-food-waste-with-cloud-technology\/","title":{"rendered":"The food tech company reducing global food waste with cloud technology"},"content":{"rendered":"
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LMK Group is a Nordic food tech company that delivers a large variety of meals directly to its customers\u2019 doors. As part of its work, the company is on a pioneering mission to reduce global food waste and drive sustainability across the grocery retail sector. To do this, LMK has been using cloud technology to optimize its processes, provide customized options for its clients and ultimately become a fully data-driven company.<\/h4>\n<\/div>\n
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\u201cOur service is intrinsically about removing food waste. That\u2019s always been a core part of what we do.\u201d<\/p>\n

Alexandrer Aagreen, Chief Technical Officer for LMK Group \u2013 formerly known as Godtlevert \u2013 is talking about the sustainability mission that underpins the Nordic food tech company\u2019s operations.<\/p>\n

\u201cToday, we try to hit less than 1% food waste, which is incredibly low for the food retail sector,\u201d Aagreen continues. \u201cIf you compare that to a normal grocery store, which I would bet is around 15-20% food waste, it’s a huge difference.\u201d<\/p>\n

Ever since LMK was established, it has sought to distinguish itself from traditional food retailers by doing things differently. \u201cIt’s not necessarily just about the tech,\u201d Agreen says. \u201cIt\u2019s the way our service has been built, the way the processes are done, the way we do upstream logistics. That\u2019s always been focused around a core strategy to eradicate food waste.\u201d<\/p>\n

That strategy \u2013 and the organizational and technology infrastructures that have made it achievable \u2013 has led to huge success for LMK, which has gone from start-up to scale-up to NASDAQ-listed company in little more than a decade, bringing together several leading food delivery companies from across the Nordics in the process.<\/p>\n

\u201cWhat we\u2019ve managed to do isn\u2019t just lucky,\u201d says Aagreen. \u201cIt\u2019s testimony to the priorities that have always guided us as a company and the processes we\u2019ve put in place.\u201d<\/p>\n

And while a steadfast commitment to reducing food waste has been the company\u2019s North Star, a key initiative supporting this drive has been the transition of LMK\u2019s core infrastructure to the cloud, supported by Microsoft partner, Syone.<\/p>\n

\u201cThe partnership with Syone has allowed us to start building our own tech, which has provided fantastic return on investment, as well as allowing us to continue to pursue our key strategic priorities,\u201d he says.<\/p>\n

Bringing locally grown food straight to your kitchen table<\/h3>\n

Founded in 2008 with a vision of simplifying everyday life by offering a large variety of meals delivered directly to its customers\u2019 doors, LMK has grown into something of a phenomenon in the Nordics. Operating in Sweden, Norway and Denmark under brand names including Godtlevert and Adams Matkasse, the LMK Group delivered approximately 1.74 million meal kits to households in its markets in 2020.<\/p>\n

\u201cOur service is so popular because it takes the hassle out of choosing what you\u2019re going to eat each day,\u201d says Aagreen. That service provides LMK\u2019s customers with meal kits that include everything they need to prepare tasty, nutritionally rich and varied meals from high quality, locally grown food.<\/p>\n

\u201cBy bypassing the traditional value chains of food retail, we not only take about 20% off the margins, but we\u2019re also able to work with local producers, with local farmers that wouldn\u2019t ordinarily get a space on traditional grocery stores\u2019 shelves,\u201d he explains. \u201cSo we take locally produced food, combine it with great recipes, and deliver that straight to your kitchen table.<\/p>\n

\u201cAdd in our efforts to reduce food waste, and that\u2019s a hugely appealing proposition for our customers.\u201d<\/p>\n

It\u2019s easy to see why LMK\u2019s business model has been so successful. But as is always the case, with success comesan increase in demand, as well as the emergence of competing services. By 2016, it had become clear that the existing infrastructure LMK had in place was not enough to accommodate the company\u2019s unstoppable growth.<\/p>\n

\u201cAll of the e-commerce, the sales with the customers, were happening through some off-the-shelf solution, which was not built for a subscription,\u201d recalls Aagreen. \u201cThe problem was that meal kits are very complex. It’s basically a full ERP value chain: from configuring products and recipes, all the way to last mile logistics and delivery.<\/p>\n

\u201cAnd up until then, all that data was actually being managed in Excel. We were doing something like 16,000 orders a week at that point, with distribution to 75% of the Nordic region, all managed by Excel and some really nice macros.\u201d<\/p>\n

That was when Microsoft partner Syone, a Portuguese system integrator and nearshore IT services provider, proposed a solution: migrate to Azure.<\/p>\n

Creating a more efficient and scalable infrastructure with Azure<\/h3>\n

\u201cWith food delivery, you can\u2019t afford to have downtime,\u201d says Aagreen. \u201cThe way that the logistics chain is built up, it means that you\u2019ll lose your revenue very quickly. Especially in comparison with other e-commerce businesses. If your sofa arrives in two days, instead of one, it’s fine. With food delivery you have a very strict timeslot to hit. If you miss it, that\u2019s it.\u201d<\/p>\n

\u201cExactly,\u201d agrees Tiago Fonseca, Chief Commercial Officer at Syone. \u201cAnd there\u2019s a huge reputational risk at stake too. If people order food and you don\u2019t deliver, they might forget once, but they definitely won\u2019t forget twice.\u201d<\/p>\n

When Syone began working with LMK in 2016, they found the company running on a platform that Fonseca describes as \u201cnot minimizing cost or maximizing productivity.\u201d<\/p>\n

\u201cIt was very stressful for the team at LMK,\u201d he says. \u201cWe were sometimes getting calls at 6am saying that order calculations weren\u2019t finishing in time. So initially our support was in helping LMK move away from the strangling processes they had in place. Then, after some workshops and assessments, we proposed a new model built on Azure.<\/p>\n

\u201cTo give you an idea of the transformation, this process at the time was taking 16 hours,\u201d says Fonseca. \u201cAnd after the initial delivery on Azure and with some well-developed code, we were taking four minutes to calculate the orders. So, that was a huge improvement.<\/p>\n

\u201cRight now, it’s taking up one hour to two hours, but that\u2019s because the company has grown so much since that time,\u201d says Fonseca.<\/p>\n

\u201cYes, we have gone from serving 30 million pounds in those days to around 120 million pounds today,\u201d says Aagreen. \u201cAnd we are adding 15 million pounds more for Denmark now here in September.\u201d<\/p>\n

\u201cThere are websites that make benchmark comparisons of the performance of e-commerce websites across the sector. The benchmarks put our site at 60% faster than the average competitor in the sector,\u201d adds Fonseca proudly.<\/p>\n

The journey to becoming a food tech company with Azure<\/h3>\n

\u201cI think we were lucky that we started using Azure in a very scale-up way,\u201d says Aagreen. \u201cIf you compare 2015-era Azure to what it is today, there has been a huge development. Very early on, we were just leveraging Virtual Machines. There wasn’t API management at that time, so we built our own.<\/p>\n

\u201cBut now we’re using off-the-shelf Azure products, everything from different security products to our API management to running our own paths, having app services and analytics. It’s been a fantastic journey from just using the infrastructure to being able to move fast to now utilizing a lot of the core technologies that Microsoft is providing as products.\u201d<\/p>\n

It is something that the wider team at LMK appreciate too, especially from a security standpoint. \u201cIt\u2019s great having these out-of-the-box solutions from Azure,\u201d says Fredrik Gabrielsen, Nordic Platform Lead at LMK Group.<\/p>\n

\u201cThey allow everything from DDoS protection to data masking in the database that ensures people only see the information regarding customers that they should see,\u201d says Gabrielsen. \u201cAll those security features are so easily applicable within the platform that adding them isn\u2019t something you even need to think about \u2013 they\u2019re just there, straight out of the box.\u201d<\/p>\n

For Aagreen, the ability to personalize the customer experience is perhaps the biggest gain for the company. \u201cWe\u2019ve gone from having a product model where you had 20 different variations, to offering 2.1 million combinations on one of our brands, which means it’s no longer humanly possible to process that type of information.<\/p>\n

\u201cSo the company has really grown into a proper food tech company with the personalization and flexibility that is now a core part of the product offering in all of our markets. And it wouldn\u2019t be possible without Azure.\u201d<\/p>\n

A journey of continuous improvement<\/h3>\n

The personalization features that LMK is now achieving are no fluke \u00ad\u2013 they are part of the long-term strategy to become a tech and data-driven company. \u201cOne of the decisions we took back in 2016 was to work on a culture of continuous development and delivery that would evolve and show up with new impacts years later,\u201d explains Fonseca.<\/p>\n

It is a strategy that is continuing to bear fruit for LMK, with forecasting features now emerging that are creating better customer experiences.<\/p>\n

\u201cOur forecasting process is very much driven by machine learning models,\u201d says Aagreen. \u201cAnd we have just launched a recommendation engine that sorts the dishes that show up at the top for each customer. These recommendations are no longer selected by the chefs, but by machine learning algorithms. It\u2019s a huge improvement, substituting a manual process that has been in place since the early years of the company with artificial intelligence and algorithms.\u201d<\/p>\n

But perhaps the most profound impact of this forecasting technology is being felt by the farmers and food producers that LMK works with.<\/p>\n

\u201cRight now, we are able to provide our producers very precise forecasting, 10 weeks in advance, so they don’t need to grow crops that they won\u2019t end up using, like they would do working with a more traditional food retailer,\u201d says Aagreen. \u201cSo we\u2019re helping our suppliers to be much more precise with the food they produce, not asking them to produce stuff that they can’t sell, and so reducing food waste even further.\u201d<\/p>\n

It is just the latest innovation on the journey to becoming a fully-fledged, data-driven food tech company. \u201cWe are definitely taking significant steps forward,\u201d says Aagreen. \u201cBut I think it’s a journey that is probably never ending. That\u2019s how we look at it. There is always room to improve, to do more, to reduce food waste further.<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

LMK Group is a Nordic food tech company that delivers a large variety of meals directly to its customers\u2019 doors. As part of its work, the company is on a pioneering mission to reduce global food waste and drive sustainability across the grocery retail sector. To do this, LMK has been using cloud technology to […]<\/p>\n","protected":false},"author":382,"featured_media":590013,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1811],"class_list":["post-590010","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-customer-stories-nb-no","specials-sustainable-futures-nb-no","stories-baerekraftig-fremtid","stories-sustainable-society-nb-no","businessPriorities-data-ai-nb-no"],"_links":{"self":[{"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/posts\/590010"}],"collection":[{"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/users\/382"}],"replies":[{"embeddable":true,"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/comments?post=590010"}],"version-history":[{"count":2,"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/posts\/590010\/revisions"}],"predecessor-version":[{"id":590108,"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/posts\/590010\/revisions\/590108"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/media\/590013"}],"wp:attachment":[{"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/media?parent=590010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pulse.microsoft.com\/nb-no\/wp-json\/wp\/v2\/categories?post=590010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}