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Will Costa Group’s artificial intelligence approach bear fruit?

Costa Group Holdings Ltd (ASX: CGC) is introducing artificial intelligence (AI) to its berry farms to optimise conditions and predict yields. The fruit and vegetable grower will start using the Sensing+ system supplied by agtech company The Yield Technology Solutions to monitor conditions and advise berry farmers of when to feed, water, and harvest the fruit. 

How does the AI system work?

The Sensing+ system uses sensors to collect data and send it to a cloud-based platform. The system then analyses the raw data and provides actionable insights to the mobile and desktop apps. This provides unique insights into the microclimate crops are grown in, allowing growers to optimise inputs such as water and chemical applications. Using the system, Costa Group will be able to monitor current and future water balances, rainfall, temperature, wind behaviour and soil conditions. 

Chief executive Harry Debney told The Australian that he believes the technology will allow Costa Group to better understand and manage growing conditions to improve the quantity and quality of yields, stating, “our berries are grown in tunnels and Sensing+ measures the growing conditions in our microclimates and uses AI to give us in tunnel weather predictions.” 

Yield predictions

Costa Group plans to use the yield prediction module, which will use AI alongside data from the microclimate weather and harvest management systems to predict yields. Debney said Costa Group was impressed with the accuracy of the system compared to the group’s manual approach, telling The Australian, “accurate yield prediction allows us to optimize our costs and achieve better prices when negotiating with our customers.”

According to the article, Ros Harvey, founder and director of The Yield, which supplies the Sensing+ system, is confident it will strengthen Costa Group’s bottom line. She stated: “Using Costa’s extensive data sets, our platform enables us to quickly and efficiently combine data to create AI models for things like yield predictions that will drive significant commercial benefit for Costa Group.”

Costa Group is a supplier to major supermarkets Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW), and is hoping the move toward becoming a more data-driven business will enable it to negotiate more favourable prices for its produce. Costa Group plans to roll out the technology across 8 berry farms in Victoria, New South Wales, and Queensland. 

Foolish takeaway

By providing for the optimal application of inputs, the new system could reduce costs while also improving yields. In my opinion, Costa Group’s move towards becoming a digitally enhanced berry grower may well bear fruit. 

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Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.