In an industry plagued by scandal and a poor reputation for commitment to sustainability, those adopting developing technology and proactively improving supply chain capabilities, will be able to provide traceability and transparency particularly in the areas of social impact, safety and authenticity which is ultimately required by today’s customers.
01 September 2021 • 5 min read
Photograph: Pietro Jeng/Unsplash
Transparency has journeyed from luxury convenience to top priority in 2021. With global access to smartphones and social media, brands can no longer hide behind international production borders. Millennials, and – new arrivals on the market – Gen Z, are more concerned about their purchases contributing to global issues, like climate change and brutal working conditions than ever before. For this reason, they’re buying from more ethical brands and investigating brand promises further than the copy on the homepage.
Many companies don’t offer the transparency that customers are demanding because current traceability systems are immature, incomplete and, in some cases, corrupt. This is usually because the complexity of supply chains is currently reflected in independent IT systems of record, which can lead to participants avoiding responsibility if there is wrong, incomplete or false data somewhere along the way.
Companies willing to rise to the demands for more transparency must first deliver on supply chain capabilities. They should be looking to focus their traceability digitisation in three areas: social impact, quality and authenticity.
Digitised traceability systems, supported by technologies, are key to transforming the primary sector and meeting a more responsible consumer demand. In the food industry, technologies like blockchain, best known for strengthening code in cryptocurrencies, and IoT measurement tools can provide the strength, security and accountability that producers need to enable end-to-end transparency. Blockchain technology in particular supports accountability since the entire history of a given product is stored in a single system of record (the ledger), which allows for a much higher degree of control over missing or incoherent data.
The food industry companies willing to rise to the demands for more transparency must first deliver on supply chain capabilities. They should be looking to focus their traceability digitisation in three areas: social impact, quality and authenticity.
Younger generations have grown up around media coverage of human rights violations in production lines, namely fashion, toys and food. Unfortunately, the threat of exposure hasn’t deterred every company from using unlawful and inhumane methods. Due to the labour-intensive nature of the tasks, the agri-food sector is particularly high risk for modern slavery. In recent years, it has emerged that a fair living wage for workers is one of consumers’ primary concerns when it comes to food and drink purchases. With increased awareness of the problem, more shoppers are looking to purchase from brands that can validate adequate working conditions, such as through regulatory partnerships (like Fairtrade and B Corp).
Consumers expect fair trading practices all the way along the value chain. To give customers, regulators and businesses complete supply chain visibility, we need to look at upgrading the current standard of barcode labelling. Barcodes are the most common auto-identification technology, but they are limited in the amount of data they can store. There are now more sophisticated labelling technologies, like QR codes, that can store links to website URLs. These URLs provide opportunities for querying databases, providing detailed data or checking the validity of the codes supplied by the QR tag. Unlike their predecessors, they can also track individual items. For example, a QR code on a bag of coffee could be scanned to reveal the farmer profile, the beans’ journey, the roasting process – the possibilities are limitless.
Drones and digital tools can be used to monitor fields, collect data and intervene when necessary: a practice that’s becoming known as “precision farming”. IoT sensors with real-time tracking capabilities can also send notifications when conditions change during transport. Foodborne illnesses are preventable and waste can be managed with upgraded observation and action.
Health is at the top of everyone’s minds, and customers want to know they’re getting a product that has been handled, packaged and transported responsibly. Not only is food safety a public health concern, it’s bad for business on many sides. For example, romaine lettuce has been the culprit of several E. coli outbreaks. In 2018 America, the contaminated salad leaves shattered the market, plummeting buyer trust, costing the industry at least $71 million and killing five people.
Deploying better-suited solutions at the beginning and middle of the journey could help companies monitor changing variables, reducing the likelihood of pathogens multiplying and contaminating an entire shipment. Drones and digital tools can be used to monitor fields, collect data and intervene when necessary: a practice that’s becoming known as “precision farming”. IoT sensors with real-time tracking capabilities can also send notifications when conditions change during transport. Foodborne illnesses are preventable and waste can be managed with upgraded observation and action.
News headlines have revealed counterfeit food has been stocking supermarket shelves and fed to oblivious restaurant-goers. “Food fraud” encompasses a range of sins, from deliberate substitutions to bulking out products with cheaper additives to making false claims on packaging. While the deception is shocking in its own right, food fraud can also be dangerous, with reported cases of allergic reactions due to undisclosed ingredients. Fraud has infiltrated the seafood industry and many other household staples, such as honey, olive oil, alcohol, dairy and more.
Shoppers are willing to put their wallets where their mouth is when it comes to buying more sustainable food and drink.
With big brand names admitting to deceit and inspectors under scrutiny for malpractice (at best) and payouts (at worst), consumer trust in food industry standards is in free fall. Companies cheating the public are being found out and are facing the consequences, and honest companies with nothing to hide are looking to win over the loyalty of consumers with full, validated transparency. They can combat fears and mitigate supply chain risk with a blend of digital and human authentication methods (such as regular third party auditing). Blockchain can once again be implemented, in tandem with robust data collection technologies, to create a decentralised, immutable ledger of the product’s journey. Many companies are piloting blockchain programmes to track their international logistics. For example, Nestlé is using blockchain technology to track their dairy from farms in New Zealand to warehouses in the Middle East.
Shoppers are willing to put their wallets where their mouth is when it comes to buying more sustainable food and drink. In a widely-cited study on buyer expectations, Nielsen reveals that almost two-thirds of the 30,000 consumers surveyed in 60 countries are willing to pay more for products and services that come from companies committed to positive social and environmental impact (especially those earning less than $20,000). One interesting finding is that although participants are happy to pay up more for responsible products, they don’t feel these products are always immediately available – signalling an opportunity for honest brands to be more overt with their practices. The study confirmed that the market for sustainable goods continues to grow.
Younger buyers are demanding radical visibility from companies producing their products, so they can be more confident that their local eateries and supermarket shelves are stocked with ethical brands. We must move past the current way of thinking about supply chains to give them what they want. Traceability should be seen as a way to give the food industry a more certain future in unprecedented times. With the support of rigorous, integrity-building technologies, the primary sector can break through its image crisis to adopt a farm-to-fork production cycle that benefits people and planet.
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