Every automobile sold in the U.S. bears a unique serial number that enables the car’s seller and buyer to track the vehicle’s history, authenticate ownership, and manage safety recalls. Today’s food consumers have similar interests in transparency about the products they buy and the ability of the food producer to take responsibility for the product across the entire value chain.
Explore this issueAugust/September 2017
It’s one thing, however, to serialize on an economically feasible basis the fewer than 20 million new cars sold in the U.S. each year at an average price exceeding $30,000. It’s another thing to do so on thousands of food products, many of which sell billions of individual units or packages at a price of a few dollars or less. The good news is that modern information technologies make mass serialization of food packages not only possible at very low, cost but able to be done in ways that establish transparency across the value chain and facilitate two-way communication between brand owners and consumers.
The potential benefits of serialization are tremendous for consumers and industry alike, enabling firms to tackle a series of food safety and consumer protection challenges, such as instant track and trace, targeted product recalls, and real-time authentication, while opening up fresh opportunities for direct consumer engagement on subjects ranging from environmental sustainability and animal welfare to customer loyalty rewards and other marketing possibilities.
While the technological capability exists, dialogue is needed among food companies, technology providers, consumers, and food safety experts to devise applications tailored to particular value chain traceability and transparency needs and that thereby maximize both the consumer and commercial benefits of new information technologies.
Evolving Consumer Drivers
The search for mass serialization solutions stems from the food industry’s need to meet changing consumer expectations.
In 2016, Deloitte published a study in collaboration with the Food Marketing Institute and the Grocery Manufacturers Association revealing that the drivers of consumer choice are shifting. Historically, purchasing decisions have been made largely on the basis of traditional drivers, namely taste, price, and convenience. However, a set of evolving drivers has become increasingly influential, encompassing health and wellness, safety, social impact, experience, and transparency. Over half of the 5,000 U.S. consumers Deloitte surveyed said that they now weigh these evolving value drivers more heavily than traditional ones, a trend that spans product categories, region, age, and income and seems set to continue.
Further, research conducted by The Centre for Food Integrity in 2016 revealed the high levels of concern regarding food safety among consumers, with two in three American consumers identifying this as a key area of concern. The research also showed that only 40 percent of consumers feel they have the information they need about where food comes from, how it is produced, and its safety credentials.
In sum, consumers are demanding more information about the foods they purchase and stronger assurances that products meet today’s higher expectations for safety, wellness, and sustainability.
The food industry has long sought efficient solutions to full value chain traceability, from sources of ingredients and raw materials through finished product manufacturing and all the way to the consumer. This serves the internal needs of the company’s food safety management system with respect to such factors as supplier management, oversight of cold chain management, and the efficient conduct of rapid, targeted recalls. These needs remain unmet in many sectors of the food system, but now with heightened consumer expectations about transparency and the speed with which safety issues are addressed there must be a shift.
The food industry is also seeking ways to meet the interest of today’s consumer in much greater transparency and connectivity with those who are producing and marketing their food. Companies need to cater to the next generation of consumers—Gen Z—who are “born digital,” and to target and share information with consumers in real time in order to build consumer confidence and nurture brand loyalty.