The beginning of the COVID-19 pandemic exposed weaknesses in the global food supply chain as retailers and food manufacturers worked tirelessly to keep up with consumer demand. But, even earlier than that, traceability and transparency were becoming hot-button issues for companies that wanted to cater to consumer desires to know more about their food as well as a need to prevent product recalls.
But, before you can make transparency a goal, you have to understand it. Here is what transparency in the food supply chain means, why it’s important, and how some businesses are beginning to address the issue.
What is Transparency in the Food Supply Chain?Historically, supply chain management wasn’t something that consumers cared about. It was an internal consideration, where people put together charts, graphs, and agreements to create a working system that brought materials into the factory, or wherever else they were needed, at the right time. No one gave much thought to the origins of many of the products in the supply chain or how they were moved and stored.
Things and times have changed.
In a transparent supply chain, each link in the chain has access to relevant information about the status and origins of products. Supply chain partners are completely open about how they produce, package, and store products, giving businesses and consumers a full and transparent picture of where food and its ingredients originate from.
Why Transparency in the Food Supply Chain Matters
The next time you’re in a grocery store, take some time to look around. You’ll probably notice a lot of consumers inspecting product labels, scanning them for ingredients, allergens, countries of origin, and claims. They might even be searching for information on how a product was manufactured or farmed. Now more than ever, people care about this stuff.
Here are several reasons why food supply chain transparency is important:
1. The pandemic has impacted the need for food chain traceability
The pandemic has underscored the weaknesses in the global supply chain. In early 2020, food processors experienced a massive shift in demand from the restaurant segment to online sales, grocery stores, and deliveries. Simultaneously, food producers had to make adjustments in factory operations in response to workers testing positive for the virus.
Securing raw materials remains a serious issue for many food producers. Overseas transportation is still experiencing delays, and many preferred suppliers have experienced ongoing shortages.
For a supply chain to be resilient, it must be transparent. Businesses need to know where goods have come from and where they are at any given time. This transparency in the supply chain will eventually give way to data about quality as well as timing and quantity. In other words, there will be information about certificates and origin as well.
2. Increased pressure from consumers for food chain transparency
One of the primary reasons to make food chain transparency a priority is because consumers want it. A 2018 survey by Nielsen revealed that 67% of consumers want to know every ingredient that’s included in the food they purchase. Another study by Natural Products Insider found that 94 percent of consumers are likely to be loyal to brands that offer total transparency, and 39 percent say they would switch to a brand that is more transparent.
People have been spending more money on food since the start of the pandemic, so they are understandably conscious about what they are buying. And the pandemic itself has driven home the fact that just about anyone is susceptible to health concerns. So more people than ever are taking the time to research what they put in their bodies.
3. Improving recall response through food transparency
What happens when a food encounters a safety crisis? In the past, not a lot. Manufacturers and retailers could issue a recall notice, but the source of the issue couldn’t be identified - until now. Government regulators have become more rigid about making sure food manufacturers, food retailers, and fresh food suppliers are more transparent throughout the production and distribution process.
Being able to identify, isolate, and recall only specific lots or batches can protect consumers’ health and safety, reduce food waste, safeguard a brand’s reputation, and ensure regulatory compliance.
4. Complying with various food safety regulations
Many countries already have regulations in place with respect to clear labeling and food safety. The Food Safety Modernization Act (FSMA) is an example in the U.S. The U.S. FDA also regulates food labeling rather stringently, detailing what must and must not be included on a label as well as where the information should be listed. Part of food chain transparency is total compliance with these various regulations.
3 Ways Businesses Are Bringing More Transparency to the Food Supply Chain
Over the last several years, buyers have made it increasingly clear that they prefer to do businesses with companies that share their values. Beyond that, businesses are realizing that there is value in having increased visibility in the food supply chain. It just makes operations more efficient in addition to pleasing customers. So, how are companies achieving these feats? Several solutions help businesses get and deliver more transparency in the food supply chain.
1. RFID Labels
Some RFID-enabled labels on the market are so thin that they are virtually indistinguishable on a product. This affordable technology solution can be scanned manually or automatically. It gives 100% accessibility for identification, authentication, and tracking across all stakeholders in the supply chain. The data can also be made available to consumers.
2. Blockchain
Using an existing QR code printed on a product’s packaging or an RFID tag, data can be stored, standardized, and analyzed using blockchain technology. Businesses and consumers can access the data by scanning the same code located on the product.
3. Food Sensors
When perishable food, like seafood, meat, and produce, moves through the supply chain, it’s vital that any blind spots in the chain get addressed and closed. One solution is to add sensors to these items that will record location, temperature, water composition, and other essential factors so that suppliers and retailers can ensure the best experience and consumers can receive total transparency.
Businesses are responding to consumer demands for more information about the foods they are buying, regulators are creating tighter food safety regulations, and shippers are struggling to keep up with increasingly complex supply chain demands. Fortunately, new strategies are continuing to emerge that make transparency in the food supply chain possible. As warehouses implement technology solutions that increase efficiency, they are also boosting transparency through the increased flow of information.
