Traceability is no more a “nice-to-have” affair on your food supply chains. As stakeholders expanding over private, public, and even non-profit sectors are opting the transparency route, we decided to look into the various food traceability projects that are out there.
A simple Google Search about food supply chains today will give you surprising results – a feed dominated by news from around the globe on food recalls, value chain disruptions and unsustainable practices. But amid these results, you will find few stories of brands that are changing how business is done – with genuine stories of how they are produced, sustainability goals that prove their forward-thoughts and a persuasive story where human spiels talk louder than numbers.
Acting behind many of these ‘feel-good’ brands are technological innovations like traceability systems. You may be now thinking, “We already do some part marking. Do I really need this advanced technology right now?” The truth is, with the challenges agri-food players face in Industry 4.0, traceability is no longer simply a “good-to-have” process.
But we were curious to find statistical proof over this claim that you might be hearing every other day. A brief look into 200 different food traceability projects gave us insights about reality. For rationals like us, here is some numeric evidence as to why you should adopt traceability system into your food supply chains.
Stay ahead, stay wanted
Walking through the aisles of a typical grocery store, your shoppers must be sorting through anywhere from 15,000 to 60,000 products, out of which 100’s could be different brands that sell products that you do. This proliferation has surely opened doors for diversity and innovation in the market, but at the same time, this means that your customer’s attention is fragmented.
Responding to the consumer needs and competition of the retail shelves, brands have produced a glut of confusing and unregulated marketing terms: natural, healthy, all-grain, all-bran, keto, free-range and the list goes on. The hollow nature of these terms has in turn led many consumers to question food labels and their legitimacy. This is why traceability is gaining popularity among brands with exclusive products.
A look into 200 different traceability projects around the world showed us that the majority of these solutions run on food supply chains of fresh produce such as leafy greens, berries and exotic fruits; beverages often made of natural ingredients; and meat and seafood products which often run high risk of dubiousness on quality.
Consumer attention is even more clouded when we move to online spaces and in today’s world, your brand identity cannot be separated for both the paradigms. Online channels have enabled consumers to seek out deeper sets of perspectives and information than they might otherwise be able to find. Moreover, a growing majority has been able to bring attention to sustainable sourcing issues and place pressure on brands to seek full visibility into their supply chains. And that’s where things get more complicated. Because even if consumers demand transparency and have the language and metrics to understand it, the international food supply chain poses a formidable barrier.
This is why traceability systems should be in the pockets of all types of enterprises – be it small or large. But companies that are reluctant to invest in newer technologies. In a study from Deloitte, manufacturers were asked to rate the business value of new technology solutions and their enterprise’s readiness to adopt and use smart and autonomous technologies. Results showed that about half (51 percent) ended up in the “Followers” segment – those who understand the value of these technologies but are not quite ready to fully adopt them. The rest of the companies were either “Frontrunners” (26 percent) or, at the opposite end of the spectrum, “Stragglers” (23 percent).
But what a mere 26 percent of Frontrunners understand is that with a traceability system in hand, a QR code will give your consumers complete visibility over the products at every stage of the supply chain. This confidence handed out about the authenticity and quality of the products is definitely your key metric in maintaining customer loyalty.
As much as we all despise those “act-now-before-you-miss-out” late-night infomercials, this is really a situation where the tagline would aptly fit. Now, you can implement this process at your own pace, but it is important to start sooner rather than later. Why? Because right now, it’s still a competitive advantage. This emerging technology can deliver visibility of the entire lifecycle of each part and maximize data value to quickly spot production issues or trends and make proactive improvements.
Changing focus from big brands to small brands
Now smaller manufacturers and processors are getting onto the traceability bandwagon in a big way. There’s an increasing realisation that, if a business can get safety and traceability right, the public will always have faith in them. And in a world where consumer confidence and brand loyalty are increasingly fragile, that is an incredibly powerful thing.
Our data shows that family-owned businesses and ranches implement traceability systems in their supply chains as much as big restaurant chains and retail corporations. Why? Because their stories are incredibly powerful than mass-produced industrial goods. Though having such a system translates to increased cost in production, a recent study by IBM tells us that over 70% of consumers are willing to pay a premium for your proof of sustainability. Moreover, GS1 US estimates that an integrated traceability process could represent approximately $3 billion in savings to the fresh foods industry as a whole.
Save your brand from recalls and counterfeits
When a piece of red plastic was found in a Snickers bar in January 2016, it led to a mass recall of Mars products in more than 55 countries. Though this may sound extreme, it is traceability that enabled Mars to trace the problem back to a production incident in The Netherlands facility between December 2015 and January 2016. There’s no doubt that being able to quickly and easily recall an item protects the consumer, sometimes even saving lives. Yet, traceability also protects the brand. By removing defective products promptly, you are preserving consumers’ trust in the quality and integrity of their favourite brands.
Another effect of the global supply chain is an increase in counterfeit goods. Consider these statistics: The Interpol in 2020 seized USD 40 million worth of potentially dangerous fake food and drink, and in India alone, food fraud went up by 24% in just a year. Many “fake” products do not live up to the safety and quality standards of your genuine counterparts, putting end-users at high risk, and in turn a bad name for your brand due to lack of validation.
What to look for in your traceability provider?
The key to success with traceability is a collaborative effort between all parties in the supply chain. Getting this right can take time and effort, but it’s not without its rewards. Traceability isn’t going anywhere, and so long as it remains a priority for consumers, retailers and regulators, it’s an investment every business needs to make.
As a long term investment, choosing the right technology partner is an overwhelming decision. It’s not only about investing in the right technology; but finding a provider who can accustom to your growing business needs and making life easier for your internal team.As our industry is heading to Big Data and the Industrial Internet of Things (IIoT), your traceability system must also be compatible with these innovations to make meaningful improvements. Interoperability is key.
But most importantly, your partner needs to reciprocate with your goals for a better tomorrow. Can your partner understand the pain points that actors throughout the food system face in implementing those practices? Do they answer consumer-driven traceability demands? If yes, your collaboration is indeed in the trail of true transparency.