Customer Spotlight: Part 2 - Where Michele interviews Francisco

Francisco Martin-Rayo, CEO/Co-founder of Helios AI

Michele Conners, Global Sourcing Director at JQI

Part II - Where Michele interviews Francisco

In the second part of our blog post, “Customer Spotlight: How Helios Helps a Global Sourcing Director Navigate Unprecedented Disruptions and Climate Change”, we have Michele Conners, the Global Sourcing Director at Just Quality, interview our CEO/Co-founder Francisco Martin-Rayo.

Michelle:  Okay, now your turn!  Tell me something fascinating that you've learned that I don't know. I've been in this industry my entire career.

Francisco: Oh gosh, no pressure! I can tell you what we've learned, but these might be a lot of things you already know. 

One of the things that's been interesting from chatting with all of these folks, is that they say that the markets are way more interconnected now than ever before.  For example, the US had a really bad berry crop. And then US buyers came to Eastern Europe and bought up all the crop. And so prices ended up being much higher than they expected, because of this transfer of buyers. 

Michelle: That’s so true. And that's one thing that we really liked about Helios because it can give us the world picture. Tell me something from AI that I'm going to learn that I don't already know. Specific to the industry.

Francisco: It has been surprising to us that this is one of the most sophisticated industries in the world - for example, you can buy a mango in Peru that ends up on a $700 omakase dinner in Tokyo. 

Or we have customers who are buying strawberries out of Egypt, then shipping them to Denmark to create yogurt, which then gets shipped to the US.  So you have this incredible level of sophistication and complexity. And yet, from our understanding, the vast majority of the business is happening on word of mouth and relationships.

Michelle: I do know that, but I love hearing an outside view on it because it's 100% true. 

And our industry, at least on the fruits and vegetables side, is 1,000% relationship based.  I remember one time, it was a Friday of Memorial Day weekend, and it was like three in the afternoon. And I was buyer then and booked 3 million pounds of corn.  You know, through a broker, no idea where it was coming from.  No paperwork.  So you are 100% correct.  

Francisco:  Exactly, so that's been very surprising. I think the second part that's been surprising is how lean most of the (procurement) teams are. 

For example, we were talking to this very large multinational that sells more ketchup than anyone else in the world.  And there are only four people on their team who buy all their fruits and vegetables globally.  That’s insane. 

Michelle: Yeah exactly.  And so it’s hard to be proactive and identify where the next disruption or roadblock is going to be.  Because there isn’t a dedicated person.  So if we can use Helios as a member of the team and Cersi as a member of the team, without giving us more work on our desk, that would be great. 

Francisco:  Absolutely, that makes a ton of sense. The last two points in terms of what we learned is the world is very different depending on how large you are.  If you're a Unilever or Nestle, a lot of the disruptions that happen don't really impact you. 

Michelle: Oh, I didn't really know that they don't get that stressed out about supply.

Francisco: They don't. When we talk to them, they say, “Listen, we're going to get our stuff. One way or another. It's McCain's problem, or Lamb Weston’s problem to make sure of that, but we know we’re the top of food chain and will get our supply.”

The middle players sometimes get screwed, sometimes they don't. And the smaller players always get screwed. Like the mango in Peru last year.  If you’re a small player, you’re not getting any mango. 

Michelle: So then the small players need to increase their purchase power by tagging into the medium players, I guess. Because then the medium players could bump to the big player.

Francisco:  Great idea.  But also, as a small or medium player you need to get ahead of these disruptions because you're always going to be less important than the big players. So you need an advantage like Helios.  Like the green beans, where we could tell you to go to Poland early.

Michelle: And because you’re small you need to develop those relationships and be first in line because you don't have the buying power to do that independently.

Francisco: Yes, exactly. That's been a big surprise. And last, specific to your question on AI - well, we’ve been doing this for two years now.  

And our hypothesis starting this company was that we were going to see more and more disruptions because of climate change.  At the same, you read in the news that artificial intelligence is coming, it's coming to take your jobs, etc, etc.

But in this particular case, I definitely don’t think that’s true. You have so many more disruptions that are happening in agricultural procurement because of climate change, that the jobs of buyers and strategic sourcers are becoming far more important than ever before.  Because it’s a new way of doing business.  Right now you really have to worry that there's going to be a problem with all of your crops somewhere in the world.

Michelle: And so you really need to level up and do something different if you're going to be able to manage to that level of disruption.

So where does Helios thing come in?  Let's use El Nino as an example. It was serious. It did totally impact the Peruvian fruits. And we had to go find mango somewhere else. Where Helios comes in for us is helping us to identify what's the next climate change issue going to be? 

Francisco: Yes! And that's something that we are starting to do a better job at.  Like, what's the next cocoa? What's the next mango? 

Because that's the most interesting part of the business. Not being able to look back and say we could have told you where this happened. But saying, “ Here's what's going to happen for the next three months.”, which takes us full circle to what we did with that green bean study.

Michelle: Exactly. I’m really enjoying this conversation, and what I realize now is that I need to go back to my sourcing directors and say,

“You guys need to go have a meeting with yourself and a cup of coffee and think through what items are you going to be worried about?  Tell me what's in inventory. Tell me what's not in inventory.” But in terms of the world weather, we need you to tell us where the hotspots are. 

Francisco: You mean, which places are going to be high risk, right? We're starting to add weather forecasting that's incredibly accurate.

And so to your point, it's being able to highlight the growing season for green beans, mangoes, spinach, okra, etc. - not just for your individual suppliers, but at the global commodity level.  

That’s where the Global Commodity Reports we’re launching in a few weeks are most helpful. Because it gives you that global view that we talked about right to look at how the different countries are faring and their growing seasons.

So I know we’re at time, but I’m so appreciative of the time and this was much more interesting than a traditional Q&A! 

Michelle: I totally agree. I've learned so much, thank you!