Food Chain Transparency: The Future’s Essential Supply Chain Goal

A few weeks ago, I overheard a conversation in a rural private household about whether it would be worthwhile to keep their own laying hens in order to remain independent of the food industry. Admittedly, it seemed a little strange to me, because the people concerned usually do most of their grocery shopping in regular supermarkets. So, most of their food was grown, processed, packaged and distributed by the very companies they sought to avoid. But somehow having their own eggs seemed to provide them with a feeling of freedom.

I won’t dwell on this specific case any longer, but it brought me back to one of the original questions that led to the series “Transparent Tuesday” being launched on this blog almost seven years ago: Do consumers really care?

At least, it’s safe to say that the number of people who care, has increased significantly in recent years. With Fridays for Future and others heating up the debate on climate change and its consequences, we have seen an increased awareness of transparency issues in popular media and beyond. After all, in 2018 an impressive 93 percent of consumers considered it important to be provided with information about the ingredients and production processes of food. Thus it is really time for food chain transparency to be taken seriously.

What’s wrong with food chains?

To put it bluntly: Despite the growing number of national and international regulations, every year new scandals are uncovered in which, for example, food was contaminated with unhealthy substances or germs, or in which social or ecological disasters are taking place behind the scenes. (Even “The Sun” has a valid point there.) Modern human slavery on farms, forced child labour, cruelty against animals as well as the destruction of ecologically important areas, which are essential for the protection of species are still a disturbing part of our reality today. No wonder then, that even supposedly independent certificates and institutions are met with little trust by the consumers. And so far we have not even come to speak about the enormous extent of food waste in our supply chains or cases of irreverent food fraud.

Why else should companies care?

As serious as all these issues are, there is clearly no point in simply just pointing out the problems. Besides satisfying consumer demand, transparent food chains offer many added values for all kinds of stakeholders:

• Transparency empowers companies to efficiently manage risks and recalls in a timely manner, to keep food quality levels high and to comply with increasingly tight laws and regulations.
• Additionally, it’s important to remember that not only consumers ask for transparency these days. Employees do, too. Being recognized as a trustworthy company can help lower employee turnover and attract promising applicants, who care for responsible employers. Above that, trust is a real competitive advantage!
• Finally, a deep understanding of product-related information helps turning complex food chains more resource-efficient, and thus sustainable as well as profitable.

Don’t believe that transparency and profit can go hand in hand?

Then think about this number: $31 billion in cost savings are expected in the food industry by 2024 through the use of Blockchain and IoT technology, of which one main objective is to improve supply chain transparency.

T for Technology (and Transparency)

Usually, these two types of technology – Blockchain and IoT – have often been presented as the solution to transparency issues. IoT-applications and various kinds of sensors are deployed to seamlessly record all processes related to a food product. Given a high level of data quality, wholesalers or other stakeholders can use a blockchain to encrypt large amounts of information and, for example, provide it via RFID-enabled labels. Some RFID labels on the market are already thinner than human hair, but still affordable. When scanned manually or automatically, product-related data can be accessed for identification, traceability and authentication by all authorized stakeholders in a supply chain. Also, the information could be provided online to consumers.

There has been a real hype around blockchains, but only recently substantial academic research has been published. And where there is a hype, persistent naysayers aren’t far away. While it is true that blockchain is still in experimental stages, some interesting use cases like CHO fighting food fraud using IBM’s food blockchain have emerged by now. I believe these new technologies are well worth a try, particularly considering the many benefits that transparency can offer. Although, doing so, you probably also want to consider the following:

• When it comes to innovative technologies, you can’t skip the trial & error stage entirely. That’s why proven case studies are important.
• For blockchains to work, comprehensively high data quality is a must. Think about RFID, but also create sensitivity for data handling among your employees. Above that, there are many more tracking technologies for supply chain transparency than you are aware of.
• You can do so much more with your data than providing it to interested customers. By feeding it to modern optimization algorithms, your sales and stock forecasts will improve dramatically and empower you to make operational decisions in the best possible way.

Closing thoughts on a Transparent Tuesday

However, no one said that transparency would be easily achieved. For example, you must think about technical issues, like steady connectivity, storage requirements, or device security. Moreover, in our world of global supply chains, where you can always source anything, manufacturers sometimes change suppliers mid-process. But if a company doesn’t find ways to make its food chains attractive to consumers, other providers will fill the gap.

In conclusion, I would therefore like to highlight a small, but growing movement in which consumers are taking transparency into their own hands: Community Supported Agriculture. “Community supported agriculture (CSA) is a partnership between farmers and consumers in which the responsibilities, risks and rewards of farming are shared,” according to the website. To put it simply, people from different families come together to produce their own food on their own terms. Although these committed local communities may seem tiny compared to global trade markets, they prove that we should most likely respond to our initial question with “Yes, consumers really do care.”

What do you think are the best ways to make food chains transparent?