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In the food industry today, it's the "age of transparency." But what does that mean, when it comes to what consumers really want from producers and sellers? Katy Jones, chief marketing and strategy officer with FoodLogiQ, has answers.
SCB: What are the top issues that are driving the food industry market in 2019?
Jones: It's an incredibly exciting time to be in the food supply chain right now. There is a significant increase in consumer demand. Consumers used to care only about whether the food was safe — whether it was going to make them sick. Now it's also about where and how it was developed. We're not only seeing issues of supply chain from a sustainability standpoint, but also whether this tomato was grown five or 500 miles from my house. Food companies are needing to answer these questions for consumers. It’s become more of a supply web, and it’s really hard for food companies to go all the way back to the farm and understand where that food's coming from. That’s a large driving force from consumers.
SCB: What’s happening in the area of regulation?
Jones: There’s a significant increase in the regulatory pressure that companies are feeling. In 2015, we saw enactment of the Food Safety Modernization Act. With the new FDA [Food & Drug Administration] commissioner, there’s a new era for smarter food safety. We're expecting to see a lot more from the regulatory standpoint, increasing the need for transparency and traceability in the supply chain.
SCB: What are the challenges involved in achieving that goal?
Jones: When you think about a lot of romaine lettuce coming into a pack house, it could be coming from four or five different suppliers. It’s a really complicated supply chain. We’re seeing a lot of interesting forces in technology helping to drive that forward, to understand exactly where it’s all coming from.
SCB: You don’t want to have to shut down an entire supply chain if the contamination happened in just one farm or location.
Jones: Subway, for example, is launching end-to-end traceability based on GS1 US standards. It enables understanding at the lot level of exactly what’s in there.
SCB: How are customer expectations changing?
Jones: We surveyed 2,000 consumers with a variety of questions about customer expectations of food companies’ responsiveness to a recall, as well as information on labeling. One of the most compelling data points was that 50% of consumers expect a food company to respond to a recall within one to two days. That’s incredibly difficult to do. You're piecing together information in in a paper trail, from a lot of disparate information sources. The presence of social media has increased pressure from consumers. They want to know that a company has fully resolved any problems as quickly as possible.
SCB: Consumers talk about the need for corporate social responsibility. But how much do they really care, when it comes down to what they buy off the shelf?
Jones: Consumers say they want to know everything about their food, but as to whether they're actually scanning the QR code on the package, or taking action to find the information, there's mixed information about that. It will be interesting to see what information companies are going to be required to provide, because many are propelling their brands based on that promise.
SCB: Consumers might give lip service to caring, but when it comes down to a product that looks attractive and the price is right, they'll go ahead and buy it anyway.
Jones: Obviously, there are different segments of buyers. Millennials are willing to pay more for food if have some transparency to the supply chain. At the end of the day, a lot of these decisions are still based on cost and convenience. But we’re not going back from the pressure for transparency in the supply chain. I think we're only going to see it increase.
SCB: What’s the most important takeaway that you derive from the research you've done?
Jones: It's the need for entities across the food supply chain to work together for transparency. No one food company is going to be held accountable for an issue when it happens. When there’s something like a romaine lettuce contamination, and a consumer gets sick and dies, the entire food industry suffers.
SCB: Do you feel that the industry has a ways to go in order to meet consumer expectations of safety and transparency?
Jones: Yes. If it was easy, we would have it now. It’s a matter of companies working together. At industry conferences, you see competitors sitting next to each other on panels talking about their food safety practices, because they want to help the entire industry move forward together. It’s quite collaborative, and I think we're seeing that more of it.
SCB: What role is technology playing today in determining the source of food products?
Jones: Traceability technology is here today. We’re working with amazing brands, CPG companies, food-service companies and retail grocers to achieve end-to-end traceability. A lot of the technologies out there today are still pretty siloed, and we need to see more data sources talking to each other, with more interoperability from a technology standpoint.
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