“Trust is the new currency of brand loyalty, and the path to
trust is transparency”
"Trust starts with truth and ends with truth." - Santosh
Food companies are acknowledging that customers want to understand
"what's under the hood" of the food they are purchasing. As a result,
more and more brands are taking big strides to supply more relevant information
about their ingredients, supply chains and certifications.
But why is transparency getting so much attention?
Is there an absence of trust? Possibly! But it seems that it
is a matter of an absence of product information that’s creating distrust and
confusion amongst consumers.
In practice, food transparency is defined as “The consumer’s
desire to understand where food originated and an expectation for clarity,
accuracy and usefulness of food-related information from the businesses that
produce and sell food.”
The concept of supply chain transparency was virtually
unknown 15 years ago, yet today it commands the attention of managers across a
broad spectrum of companies and industries. Supply chain transparency requires
companies to understand what’s happening upstream with in the supply chain and
to communicate this knowledge both internally and externally.
Supply chain transparency can be highly complex encompassing
a large range of sectors, disciplines and stake holders. It may be as simple as providing information
on source of origin or food safety certifications and as complex as product
tracing from farm to fork. Traditionally industry best practice required the
ability of a supply chain entity to be able to trace one step back and one step
forward. Ideally, it would be preferred
to be able to trace from the farm to the fork, but this wasn’t always practical
thanks to a highly segmented paper-based process with many middlemen. With the application of new technologies like
QR codes, blockchain, and IoT devices the power to trace from farm to fork is
now within the realms of practicality.
As part of the new era of smarter food safety, the FDA is encouraging
certain high risk food commodities to adopt technology to improve
traceability. Supply chain transparency
means that it is a lot more difficult to “hide” and this is holding
stakeholders accountable which is improving culture, engagement and trust.
We can see that there is a powerful push towards
transparency and therefor benefits are clear to see, yet the food industry is very
slow to transition.
"The most expensive thing in the world is TRUST. It can take years to earn and just a matter
of seconds to lose." - Unknown
Part of this can be the conservative nature of the industry,
but specifically, companies and suppliers have feared that divulging too much
information would undermine their competitive advantage or expose them to
criticism. One more reason is relevant information, such as details of upstream
supply chain practices, might not be collected or if it does exist, could be
erroneous. Finally, the ROI for investing in transparency doesn’t always
satisfy near-term requirements.
Regardless of the reasons for hesitancy, the pure nature of
digital transformation implies that the push for transparency will continue.
The question is how we as an industry react to it in a way where we still feel
like we have semblance of control.
The food industry like many others finds itself being pushed
towards more transparency but like in
the movie “The Full Monty” they are very nervous of exposing too much.
So what is the happy medium?
Providing your audience with what they want but still trying
to maintain some semblance of decency and respect.
Keep private what is private, but expose what needs to be
So what parts of the supply chain need more transparency? A
good place to start is to show where your product is from (provenance), that it
is safe and where your company’s social accountabilities lay.
While blockchain and other technologies have been hailed as
the solution to supply chain transparency, any viable solution must include the
right mix of people, information, and technology to support outlined
objectives. A technology cannot solve
this issue in isolation. For instance, internal and external stakeholders
should be involved, and the technology deployed should include solutions that
capture, translate, and disseminate useful data, as well as support appropriate
decision making. Blockchain is not a
magic wand but it may be just the magic to make things happen that were not
possible in the past. Blockchain is immutable and forms the backbone of most of
the Food Ecosystems digital supply chain solutions.
A balanced approach to improving transparency without doing
the full Monty is to follow these 5 easy steps:
Step 1: Identify your transparency goals based on your
business risks and stakeholder needs.
For examples you may have a competitor which is sourcing ethically grown
raw materials and using this as a marketing edge.
Step 2: Scope out the part/s of the supply chain you want to
target based on the risks and goals identified in step 1. In our example you may then want to focus on
suppliers and the sourcing of a specific raw material
Step 3: Collect as much actionable information on where your
opportunities for improvement lie. You
may look for alternative suppliers that meet your buying standards
Step 4: Begin to engage the key players and stakeholders,
which may include the suppliers, marketing and branding on how you want to
communicate the new transparency
Step 5: Establish how
much you want to disclose. In our example we may want to identify a specific
grower and tell their story. How do you
engage the consumer? Are you going to
provide QR codes or write bogs on your web page? This is your choice and in your control.
Clearly the 5 steps of transparency is not something you will
do by yourself or in isolation. But as
you are considering this journey there are a couple of easy (low hanging fruit
opportunities) that can get you prepared.
What I would consider the basics of transparency in the food supply
Firstly, get your food safety programs certified and
disclose this. A food safety certificate
is the ante you need to play in the food game.
In an industry where supplier quality assurance is more
about getting the cheapest ingredients, the game is changing as many are
creating networks of suppliers based on sustainability, authenticity and labor
practices. Where are you sourcing your
raw materials and do you know what the consumer’s perceptions are? There is a very strong push for locally owned
and locally grown products.
Start sharing real time critical information across the
supply chain. For example, real time
monitoring of temperature or vehicle position tracking.
Technologies such as QR codes are now common place. Consider
participating in programs which let the consumers use their smartphones to scan
a QR Code on a package and receive information about the product From there the step to using blockchain is a
very small one. QR codes are cheap and
easy to use and form an integral part of the digital supply chain.
Establish a formal process such as the 5 – step process to help
assign priorities and to choose low hanging fruit
Not everything needs to be transparent and it can be an
Technology alone cannot improve transparency. We should not rely purely on blockchain but
need transformation and staff engagement.
What does not get measured does not get done. Combine what you are measuring and sharing on
It is possible to share what is under the hood without doing
the Full Monty.