“A lot of companies still use manual or paper-based processes,” Paquin says, “especially when it comes to traceability. These systems are simply not accurate enough and cannot provide the visibility that is needed to provide the transparency consumers want. Traditionally, the ROI to replace these systems with automation has not been the strongest. Manufacturers would make investments for other initiatives, say a system to improve productivity first.”
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Explore this issueApril/May 2017
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For some in the industry, the linear “one up and one back” approach to supply chain transparency has sufficed thus far, says Jones, but that’s unfortunately outdated in the present climate. Knowing only the information one step back and one step forward in the supply chain is no longer enough.
“To give consumers the transparency they want,” Jones underlines, “it is imperative that a company implement whole chain traceability, rather than relying solely on the movement of product within its own four walls.”
Adopting that level of transparency will cost capital, but Jones stresses companies need to understand that it’s also an investment that pays a healthy dividend.
“Transparency in food marketing can be driven by the data that is assembled when implementing a traceability program,” Jones explains. “Traceability provides visibility into the data about your products and how they move across your supply chain. Imagine being able to tweet with real-time data about the food you produce. It can be an incredible marketing advantage in the food industry. Traceability can enhance compliance with federal and state food-safety regulations, and significantly reduce the time it takes to resolve a food recall or withdrawal, which helps tremendously with establishing and maintaining consumer trust.”
A study Paquin conducted within the last few years recently showed that 45 percent of respondents had a formal traceability solution in place, he explains, but it also revealed that having a system in place alone was not enough to guarantee market share. Track and trace technology, with a two-way information flow from trace-back to trace-forward, made a deciding difference.
“From a practicality standpoint, traceability is really about what you can track within your system,” Paquin says. “Leaders in the industry were more likely than their peers to be able to track and trace their products from any stage in the value chain. This includes details on suppliers used, operators who worked on the product (or an ingredient that was mixed into the product), equipment used in the manufacturing process, distribution, and even any customer complaints. Without an integrated system, a manufacturer will not be able to provide the transparency that consumers demand today.
Jones, too, cautions against doing transparency by halves, or by trying to claim transparency without actually putting in the work it demands.
“Where food companies go wrong is when they attempt to market ‘farm-to-fork’ in an inauthentic way,” she says. “Consumers are getting smarter about these marketing programs and want more data-driven marketing. They want real-time information backed by real data.”
What Consumers Think And Know
A significant challenge manufacturers face, says Arnot, is becoming the source consumers turn to for information about their food. In a climate of alarm over “fake news,” debates over the merits and harms of GMOs, and other deeply debated topics, Arnot notes that “People trust information from their peers before they trust information from experts. If that’s the case, how do we begin to engage with those peers in a more effective way? It’s very challenging.”
Having surveyed widely on the subject, Arnot reports that over the past seven years, the number of consumers who believe they have all the information they need to make decisions about their food has been steadily increasing. The problem is that the information that makes consumers feel informed may not be true.