Tag Archives: transparency

Organic, NonGMO, Natural, Labeling

Achieving Transparency in Organic and Natural Product Claims

By Lori Carlson
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Organic, NonGMO, Natural, Labeling

Consumer preference for organic and “all natural” foods remains on the rise, according to market trend research and retailer sales.1,2 The Organic Trade Association (OTA) recorded $40 billion in U.S. organic food sales for 2015, stating that sales have nearly doubled since 2008.3 Pair this with $21 billion in sales for Q1 2016 for non-GMO labeled foods and $1.6 billion in 2015 gluten-free sales and, it is hard to ignore this thriving market sector, which seeks to support consumers in their quest for fresh, healthy and transparently-labeled foods.4,5

As a result of these trends, the industry is experiencing a surge in natural food and beverage start-up companies as well as the acquisition of organic and natural product companies by manufacturing giants such as Campbell Soup Co., Danone and General Mills, Inc. But in complex—and especially global—supply chains, achieving transparency comes with hurdles for verifying product claims  such as “all-natural”, non-GMO, antibiotic-free, and other nutrient content or functional claims.

Organic and other natural food manufacturers are under increasing regulatory and consumer scrutiny for tracing claims back to the source for all ingredients. Failing to verify the authenticity or identity preservation (IP) status of materials, maintain chain of custody and ensure the accuracy of labels can have devastating consequences for a manufacturer, including regulatory action and consumer fraud class action law suits.6 It’s not just consumers demanding the “right to know” where food comes from, but manufacturers must also push this sentiment back through their supply chain to drive transparency for ensuring safety, brand protection and verifying product claims.

With the goal of meeting consumer demands for healthy food products, improved transparency in food production and clean labels, how can organic, non-GMO and natural food manufacturers stay ahead of the curve when it comes to ensuring that product claims provide the value consumers seek?

Consider the following tasks for achieving transparency in organic and natural product claims.

Analyze Your Ingredients for Risk

Get to know the pitfalls, which can affect the integrity of product claims. Many of these stem from cross contamination, authenticity or mislabeling issues for sourced materials. To prevent these pitfalls, analyze each ingredient for supply chain risks. Identifying potential risks, which may affect the integrity of claims creating liability for misbranding, is a critical step in achieving transparency.

For example, is there a potential for cross contamination from a non-organic source? This is a common risk where a supplier engages in the co-production of organic and non-organic materials. A lack of segregation and clear product identification during transportation, storage and processing activities can lead to commingling or cross-contamination, which affects material integrity and thus, any downstream product claims. Ensuring suppliers and the manufacturer have clear measures in place for segregation is an important consideration when determining risk.

Or, consider adulteration from a non-authentic material, which can affect the integrity of the claim. Identifying vulnerabilities within the supply chain is necessary to reduce opportunities for perpetrating food fraud. Materials such as organic products and some natural ingredients are at greater risk for fraud where limited availability is an issue and/or the material is a high-value commodity or product. Mislabeling, counterfeit production or economically motivated adulteration, such as the substitution or dilution of ingredients in a sourced material, has a significant impact on downstream product claims.

Unverified packaging and labels are other sources of risk with the potential to affect the integrity of product claims. Ensure your supplier’s labeling practices include controls to verify the correct packaging and labels when producing IP materials or other ingredients with nutrient content or functional claims.

With a clear understanding of material risks, what attributes of an ingredient should be prioritized, tested and/or verified when considering the integrity of finished product claims?

Once material risks are analyzed, establish clear specifications for raw materials, which are agreed upon between the supplier and manufacturer. This serves as the basis for verifying material claims and subsequently, downstream product claims. Where specifications are in place, material verification may be performed through a variety methods including: testing, mass balance, COA review and audits. Verifying materials against agreed upon specifications not only supports due diligence in product claims but also brings manufacturers closer to their suppliers, steering us towards the next task.

Get to Know Your Suppliers

At the heart of food production transparency is the relationship a manufacturer has with its suppliers. Even the simplest of manufactured foods have a handful of ingredients, which are typically sourced through a global supply chain network. Due to the seasonality of produce or supply chain risks such as market fluctuations, business disruptions, natural disasters, or transportation failures; manufacturers can’t rely on a single supplier for the sourcing of a particular ingredient.

This leads to reliance on multiple suppliers, which may be geographically dispersed. Sourcing from multiple suppliers—especially when this occurs for multiple ingredients across multiple products—can create hurdles to relationship building for enhanced transparency due to time and resource constraints for acquiring first-hand knowledge of a supplier’s operation. Thus, proactive supply chain management, which enables a manufacturer to learn about the supplier’s history and operation, is essential for transparency.

This can be accomplished by establishing supplier approval criteria to provide a baseline for getting to know your supplier and establish minimum criteria for sourcing. Building upon this, is the use of approved suppliers to solidify the relationship and develop out a stable supply chain network. And finally, it is best practice to visit the supplier’s site to learn more about operational practices and the people responsible for ensuring material specifications and identity status are consistently achieved.

Apply Supply Chain Management Best Practices

Effective management of suppliers to prevent or reduce risks, which can lead to mislabeling and false claims, relies on the risk assessment conducted for materials and suppliers, applied controls (e.g., segregation) and verification that the supplier’s controls consistently ensure material integrity.

GFSI benchmarked schemes paved the way for enhanced supply chain management and risk mitigation when it comes to sourcing materials to ensure food safety and legal status. Some schemes additionally require controls and verification activities such as the validation of health claims or verification of nutrient content to provide a framework for helping manufacturers develop a system, which ensures product integrity. For food sold in the United States, a GFSI-based system is now reinforced by the  FSMA Preventive Controls rule, which requires supply chain-applied controls to mitigate material risks along with additional controls to ensure that food is not adulterated or misbranded under the U.S. Food, Drug and Cosmetic (FD&C) Act.

It is important to note that while the FSMA Preventive Controls rule regulates most processors and manufacturers, organic raw agricultural commodities (RAC’s), dietary supplements and unprocessed meats are not covered by the rule as they are covered by other U.S. food regulations. Since these products may be included in organic and natural product formulations, manufacturers may want to consider applying a Preventive Controls methodology to their supply chain or pursue certification to a recognized food safety standard such as a GFSI benchmarked scheme where this is not already in place.

Simplify Your Supply Chain

Complex supply chains reduce visibility, add latency into monitoring, and increase opportunities for contamination or fraud.7,8

Simplifying your supply chain can take a variety of forms such as the sourcing of local or domestic materials.

Continue reading the article by clicking on page 2 below.

University of Surrey, Food scare diagram

New Food Scare Categorization to Help Tackle Compromises in Supply Chain

By Food Safety Tech Staff
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University of Surrey, Food scare diagram

Attend the Food Safety Supply Chain Conference, June 5–6, 2017 in Rockville, MD | LEARN MOREThe global complexity of the food supply chain is only increasing the amount of adverse issues that can occur. In an effort to help the industry mitigate the various risk factors and reduce the incidence of food scares, researchers from UK-based University of Surrey have developed a new system for classifying these “food scares” across the food chain. In a recent report, Food scares: a comprehensive categorization, published in the British Food Journal, a food scare is defined as “the response to a food incident (real or perceived) that causes a sudden disruption to the food supply chain and to food consumption patterns.” The term also takes into consideration consumer distrust in the food supply chain.

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“With food scares becoming more frequent, it is important that we have a categorization system which enables efficient development of strategies to tackle such compromises to our food supply,” said report co-author Professor Angela Druckman from the University of Surrey in a press release.

“A food scare is the response to a food incident (real or perceived) that causes a sudden disruption to the food supply chain and to food consumption patterns.”

The researchers created a diagram (see Figure 1) that categorizes food scares by physical indicators such as chemical, physical or biological contamination and origin such as intentional deception, transparency and awareness issues.

University of Surrey, Food scare diagram
Figure 1. Categorization of food scare diagram. Courtesy of the University of Surrey

The authors note the importance of identifying the cause of contamination (as seen in the diagram), as the “method through which contamination occurs is key in devising food scare prevention strategies.”

2017 Food Industry: 4 Trends to Watch

By Katy Jones
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From countless recalls, to FSMA deadlines, to the rising demand for transparency, 2016 has been a monumental year in the food industry. With 2017 knocking, here are the top trends and predictions to watch out for in the food industry next year.

1. Moving Toward a Fully Digital, Connected Supply Chain

The food supply chain in many ways is still lagging behind in technology compared to other supply chains. In 2017, many companies will begin or continue on their journey to fully digitize their supply chain, whether that is simply getting their list of approved suppliers out of an Excel spreadsheet and  into a supplier management software technology solution or fully capturing every step of their products along the journey from farm to fork.

The spectrum of digitization across the supply chain is quite broad. But bottom line, supply chain analytics will empower food companies to create useful KPIs, allow them to truly measure the ROI of their supply chain initiatives and give consumers the transparency that they demand. And systems that fully support the daily monitoring, sharing and interpretation of those analytics needed to help companies will experience tremendous growth in 2017.

Collaboration with your supply chain partners is an absolutely critical element, and we can expect to see more companies fully integrate throughout their network of suppliers and customers. Food companies that will succeed in 2017 will need a fully integrated supply chain network, with access to the same information, working towards a shared mission to deliver results and be ahead of their competitors. A connected supplier network will allow food companies to be agile when faced with an issue, responsive to recalls, as well as be flexible and efficient.

2. Recalls, Recalls, Recalls

We saw a high volume of recalls this year, and this trend is not going away anytime soon. As more and more advances in food testing are made, companies will have access to new technologies across their supply chain that will identify issues early. Consequently, more products will need to be pulled out of the supply chain because of that increased testing in order to maintain consumer sentiment.

The companies that are able to roll out these capabilities quickly and efficiently—armed with the data needed—will be well poised to manage their supply chain, potential recalls and the impact to their customers. With the knowledge that we can expect to see several recalls in the new year, food companies should be looking to mitigate risks and better manage their supply chain.

3. Full-force FSMA Is Here Whether You Like It or Not

FSMA focuses on amplifying preventive controls for food production in order to alleviate potential food contamination outbreaks, and the past two or more years have been focused on this preparation. This preparation will come to a pinnacle in 2017, the first full year of FSMA implementation worldwide, with the FDA starting audits for larger companies. This could lead to the FDA requesting required records, conducting audits and in the worst situation for food companies, shutting down operations if they feel it’s necessary.

FSMA will require detailed record keeping when a recall or outbreak occurs, with clearly defined corrective actions in place. Companies will see an increased need for technologies that help supply preventive processes such as food allergen and sanitation controls, as well a prepared recall and supply chain plan. Tracking and traceability will be the two key parameters that will offer manufacturers the ability to examine specific foods and trends to improve their overall process. In order to comply with these new FSMA regulations at every step of the process, food companies will increasingly look to utilize these technologies to account for full traceability of the supply chain.

4. Growth in Foodservice At the Consumer’s Doorstep

Brands like Starbucks and Panera have been testing the food home delivery waters, but more companies seem to be jumping onto the trend of bringing gourmet food directly to the consumer’s doorstep—Blue Apron, Plated, HelloFresh just to name a few.

Dean Wiltse, FoodLogiq

Will 2017 Be the Year of Transparency?

By Maria Fontanazza
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Dean Wiltse, FoodLogiq

The increasing complexity of the global food chain has also increased the complexity of traceability of ingredients. However, FSMA has made this task a critical part of the seed to fork process. More vigilance and awareness of the supply chain is an essential part of protecting consumers and the company brand, and plays in an important role in the event of a recall. In a Q&A with Food Safety Tech Dean Wiltse, CEO of FoodLogiQ, explains the issues the food industry is experience in this area and why transparency in the supply chain will become the new normal.

Food Safety Tech: What are the biggest supply chain challenges you see industry facing today?

Dean Wiltse: The biggest challenge we see in the food supply chain is getting beyond the “one-up and one-back” approach to supply chain management to achieve real transparency in the supply chain. Now I think more than ever consumers want to know more information about their food and 2017 is going to be the year of transparency. A year of getting beyond one-up and one-back, and beyond the four walls of the food manufacturing facility to really dig down and understand what is going on two, three, four, or five levels down the supply chain, from a safety and risk mitigation standpoint.

I also think food companies will continue to be challenged by the ripple effect of increased recalls: Sunflower seeds, flour, powdered milk. Many food companies were rocked with these recalls in 2016. We expect these recalls to continue in scale and frequency going into 2017.

Another challenge is in the area of quality incidents—and the monitoring of those quality incidents. Oftentimes these quality issues go unchecked and it’s damaging to the quality of your food—and of course your brand—as well as damaging to the bottom line.

FST: How should companies monitor and ensure that they are getting high quality product from suppliers?

Wiltse: It sounds simple, but it all starts with being aware of exactly where you are experiencing quality issues across your supply chain. At FoodLogiQ, we pull all of the quality and incident data together in our dashboard to enable food companies to know exactly which suppliers you are having quality issues with and which ones you aren’t.

FoodLogiQ incident dashboard FoodLogiQ Dashboard
FoodLogiQ dashboards enable users to monitor quality issues in the supply chain and document incidents.  (Click above images to enlarge the dashboards)

Tracking and documenting these incidents—followed by the corrective actions—is critical. It is also important that all of the requirements and expectations are communicated openly; it makes the food supply chain safer by opening up transparency.

Customers can also use our technology to aggregate the quality and safety data into a star rating for their suppliers. Defining what is important to you from a quality and safety standpoint and aggregate that data in the software, and then assign a star rating for your suppliers. You can then use this star rating to formulate your preferred and approved supplier list.

FST: Where are the biggest disconnects in the supply chain? And how can companies rectify this?

Wiltse: Back to what the consumer is demanding: More information about their food, where it came from and what exactly is in it. Leading food brands want to provide this level of transparency to their consumers, but many are struggling with delivering this information in an authentic, real-time fashion.

Today there’s technology that can deliver it to them. In order to get more granular and provide more detailed information through the supply chain, there’s a cost associated with that, even down to the labeling at the grower for traceability. Many in the industry view this as an additional cost, but the leaders see this as a strategic investment and realize there is significant ROI in supply chain transparency.

FST: What are the most serious concerns surrounding FSMA and the supply chain?

Wiltse: Clearly the majority of the industry has been preparing for FSMA for several years now, getting their processes in place, if they weren’t already. Where we see a significant opportunity for companies to be proactive is in centralizing their required records, safety plans, and other essential processes into one platform for their entire supply chain.

We see many food companies who may have the required documentation and corrective actions in place, but they are scattered or siloed throughout the organization, and not centralized and easily accessible when the FDA calls on you to provide that information.

Another challenge is certainly top of mind is foreign supplier verification. The wave of required verification for foreign suppliers will be significant for many companies so they must be vigilant and start that process now or risk a significant disruption to their business.

Katy Jones, Foodlogiq
FST Soapbox

Mitigating Supply Chain Risk with Transparency and Traceability

By Katy Jones
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Katy Jones, Foodlogiq

Attend the Food Safety Supply Chain Conference, June 5–6, 2017 in Rockville, MD | LEARN MOREA recent study from The Hartman Group on the topic of transparency found that consumers are becoming more concerned about imports and the safety standards behind companies producing food and beverage products beyond U.S. borders.

So with the drastic rise in consumer expectations for food quality and safety in the past few years, how can companies ensure they’re mitigating risks in the supply chain while fostering transparency to meet consumer expectations?

To our benefit, the focus of the broader food industry and the government, as well as innovations in technology, are making it easier than ever to comprehensively track the supply chain.

Another Day, Another Food Recall, Another Listeria Scare

In today’s reality, whether we like it or not, food recalls are an inevitable part of the food industry, and adulteration in the supply chain is a key safety issue. With the wellbeing of consumers at stake, if a contamination finds its way into a brand’s supply chain, the best possible course of action is to take action on a recall using impeccable supply chain records and monitor the affected product moving throughout the chain.

With recalls being here to stay in the food industry, companies need to be prepared to handle these issues quickly and effectively. By implementing supplier management and whole-chain traceability software, allergens and impurities can be pinpointed to a specific lot of product as opposed to being limited to processing/issue date, and not knowing the source or country of origin of every ingredient (as many suppliers can contribute to one product) within the supply chain.

Additionally, with these technologies, brands can keep their supply chain transparent and compliant with growing industry regulations. With consumer standards on the line, proactive transparency can ensure that a company has a plan of attack when the inevitable hits.

A Targeted and Precise Plan

Companies and brands need to broaden their definition of food safety in order to manage and satisfy an expanded set of consumer expectations. The traditional, linear “one-up and one-back” (OUOB) approach to supply chain is no longer acceptable when it comes to comprehensive supply chain transparency.

Consumers need a targeted and precise plan when dealing with the safety of their food—it’s no longer just about whether the food safe to eat. The definition has expanded to include safety around ingredients and country of origin. Awareness of where a product came from and where it is going next is not an acceptable method if a company wishes to foster transparency with customers and effectively manage recalls. In addition, these standards are emphasized by federal regulations like the FSMA and FSVP—the industry is now shifting towards preventative approaches to safety matters, as opposed to reactive. FSMA requires food manufacturers to increase focus on prevention rather than response to contamination incidents, which will require a comprehensive view of the entire supply chain.

Brands will need to develop strong food safety plans with streamlined audits and compliance records, verifying supply chain partners and executing corrective actions for suppliers that are not in compliance with the process and food safety plan set in place. In establishing this process, having the technology to support it is paramount in ensuring that suppliers are sticking to the food safety practices necessary to follow industry regulation and exceed consumer expectation.

Transparency in Today’s Complex Food Paradigm

As the global food supply continues to grow in volume and complexity, brands have an opportunity and an obligation to adapt to the food paradigm. According to a Label Insight study, 94% of consumers say transparency from food brands is the #1 factor that impacts purchase. Brands are no longer able to blame a supplier’s lack of transparency or unreliable records for exposing consumers to unsafe products but instead, the brand is solely held accountable.

Transparency and proactivity were optional in the past, but are now established as fundamental components of a brand’s safety plan if they are to adapt to the changing industry landscape as well as consumer demand. As recalls are bound to happen, proactivity and transparency can ensure that a company is one step ahead of an outbreak at all times.

The fact is, adapting to this shifting environment and aligning with these best practices and the technologies that enable them is critical to the success of the supplier, distributor and across the whole supply chain. Food companies must look to utilize big data analytics and intelligent supply chain mapping technologies in order to improve transparency and increase traceability. With the ability to track ingredients back and forth across the supply chain, these technologies enable a safer consumer experience as well as provide tremendous business value in eliminating inefficiencies, managing supply chain issues, and effectively protecting the brand with the insights offered.

Hand

Consumers Drive GMO Debate, Chicken Playtime and Tech Innovation

By Maria Fontanazza
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Hand

Last week several leading organizations in the food industry gathered to discuss trends and key issues facing the industry at The Wall Street Journal Global Food Forum. From the GMO debate to small farming and humane practices to sugar preferences, it’s clear that consumer demand for more control over what they’re consuming will continue to drive industry practices and future policies.

Industry leaders will gather at the 2016 Food Safety Consortium, December 5–9 in Schaumburg, IL | LEARN MOREAgriculture in the Global Landscape

The agricultural sector is often one of the most protected markets, according to Darci Vetter, ambassador and chief agricultural negotiator at the Office of the U.S. Trade Representative. Vetter strongly advocated for moving forward with free trade agreements in the United States for fear of falling behind in such a competitive global market.

When the audience was asked which country would see the biggest increase in agricultural exports in coming years, 40% selected China. To this observation, Vetter commented that while China has invested a great deal into basic research in the field of agriculture, the country has not been able to turn discoveries into viable technologies for farmers.

“China’s vision of national security is very much tied to food security.” – Darci Vetter, ambassador and chief agricultural negotiator at the Office of the U.S. Trade Representative

Antibiotics: Not in My Chicken

As industry faces unprecedented scrutiny from consumers, the use of antibiotics in livestock remains a hot button issue. Nearly 15 years ago, Perdue Farms saw evidence that consumers were concerned about antibiotics, and the company has made significant strides to reach today’s slogan, “No Antibiotics Ever”. This means that 100% of the chickens are not receiving antibiotics unless they’re sick, which is about 5%, according to company Chairman Jim Perdue. Measures the company has taken to reduce the incidence of illness in birds includes wiping every egg that comes into a hatchery with a baby wipe (Perdue says that the company is the biggest user of baby wipes); using herbs such as oregano in feed, because it has been shown to help condition the gut; and engaging in “chicken playtime” (a controlled atmosphere for chickens to play), which is said to reduce stress in chickens.

Debating GMOs and Technology

In order to address the growing population, industry must look at the entire suite of tools available, said Vetter. According to Mike Frank, senior vice president and chief commercial officer of Monsanto Co., 60–70% more food needs to be produced to feed the future population. Global warming, affordability and consumer education are just a few challenges that farmers face while trying to improve productivity and efficiency. This is where technology plays a key role, said Frank. Industry needs innovation to address the challenge of producing more food and managing the environmental footprint.

“We need every farmer, whether organic or not, to be successful.” – Mike Frank, senior vice president and chief commercial officer, Monsanto Company

Frank predicts that big data will dramatically change agriculture within the next five to six years by allowing farmers to farm by the square meter, thereby improving productivity in areas such as seeding and pest management. Farmers will also be able to leverage data to gain a better understanding of soil conditions and weather, and how it will ultimately impact their harvest.

Closing the Food Safety Loop

“Food safety doesn’t magically happen,” said Frank Yiannas, vice president of food safety at Walmart. He emphasized how companies must work hard to reduce risk early in the process, citing Walmart’s guiding principles: Is it safe? Is it affordable? Is it sustainable? He also touched on the company’s program to reduce the incidence of Salmonella in chicken parts and how companies should approach risk not just from the scientific point of view but also consider the regulatory requirements and perceived risk in making risk management decisions.

“We as leaders need to shift the conversation and let food unite us.” – Frank Yiannas, vice president, food safety, Walmart

The discussion between FDA commissioner Robert Califf, M.D. and Susan Mayne, director at CFSAN, focused more on chronic disease and healthy eating, however Califf expressed a need for more interrelated data sources within FDA. He also encouraged that industry conduct more research to ensure that decisions are based on good evidence.

Cecile Camerlynck, Transparency One

Why We Buy: The New Era of Transparency

By Cécile Camerlynck
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Cecile Camerlynck, Transparency One

Supply chains are getting increasingly more complex. Add to this the fact that consumers want more and more information about the products they buy. How can we obtain and store the information we want (and need), when we interact with hundreds of suppliers? Transparency in your supply chain is no longer a “nice to have”, but has become a must-have.

Product, price and quality used to be enough. Brands created products with good, better and best strategies targeting specific customer segments based on price and quality differences. Classifying customers and products allowed for more targeted offers—and a closer connection to the consumer.

And then Apple and Amazon reinvented the shopping experience. Digital and mobile took off. The customer experience became a point of differentiation in the store, online and on devices. As a result, the customer experience and omni-channel retailing have been core values for the past decade.

Today, a new value is emerging: Transparency. It is no longer enough to have a high-quality product, at a good price and with a rewarding shopping experience. The rise in health-conscious consumers, a highly interconnected society (transparency in the digital era), and a greater frequency of recalls and social responsibility issues has increased consumer demand for transparency. They want to know where and how products are made, what they are made of, and who made them.

Unsurprisingly, shoppers are very concerned by news about food safety issues such a Listeria and food fraud, which have become increasingly well publicized. Experience shows that these events have a significant impact on consumer confidence in brands and in certain types of products, which can take a long time to overcome.

According to a report released this year by World Vision Canada, consumers want to make ethical buying decisions.1 However, they are kept in the dark and don’t have enough information about products to do so. The organization is pushing for a new law, such as those already passed in the United States and the UK, to ensure that factories in foreign countries supplying the Canadian market don’t use minors to make products.

Every brand will need to determine the right level of transparency for their company and customers (consumer trust drivers like country of origin, label accuracy, etc.). Only 1% of consumers will want to know everything. For the other 99%, what they really want to know is that the brand they are buying from has a safe and responsible supply chain. They want to trust the brand promise. However, many brands still only know their immediate suppliers—and to ensure this trust, they need to dig deeper.

Providing transparency in your entire supply chain will reduce what we call the “visibility barrier” and give you access to all the information that you need and that your customer wants. Rather than simply reacting when a crisis emerges, you will proactively know your entire supply chain identity.

In 2016, technology and business practices exist to truly create brand trust by ensuring a safe and responsible supply chain. Yes, supply chains are complex and global. Yes, they represent thousands of companies, some of whom may not want to share information. But if more than a billion people can connect on Facebook, when it comes to knowing the supply chain, it’s simply not enough to say “I don’t know.”

Reference

  1. Press, J. (June 9, 2016). “New report on child labour raises call for supply chain transparency law”, Times Colonist, Accessed August 12, 2016. Retrieved from: http://www.timescolonist.com/new-report-on-child-labour-raises-call-for-supply-chain-transparency-law-1.2274235
Randy Fields, Repositrak
FST Soapbox

What Comes After FSMA?

By Randy Fields
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Randy Fields, Repositrak

The initial deadlines for Food Safety Modernization Act implementation are upon us, and while it will be a year or more before companies must comply with the regulations, now is an appropriate  time to consider the happens next with food safety in the United States. Packaging requirements, issues with imports, the move toward clean labels, updating facility auditing requirements, and a wide set of compliance issues will be near-term time-consuming issues for food safety directors and executives all the way up to the c-suite.

FSMA is the most impactful set of safety regulations to hit the grocery and restaurant industries since before World War II. But there are other elements of consumer protection that will quickly capture the attention of supermarket and foodservice executives after August, and smart companies are already looking ahead to ensure a competitive advantage.

Packaging requirements aren’t just limited to country of origin labeling. Consumers are demanding full transparency from manufacturers and the retailers from which they buy their food. Shoppers are demanding clear descriptions of what they’re eating and voicing their displeasure for companies that are not providing the details they want by buying competitive items. A quick look at the comparative sales of the big processed food companies during the last few years verifies this isn’t a fad.

Tainted imported food (for both humans and pets) nearly a decade ago was a key trigger for the legislation that ultimately became FSMA. While the act addresses record keeping and some elements of lab testing, there are still several issues to tackle, including third-party validation rules and the voluntary program for importers that provides for expedited review and entry of foods.

The move toward clean labels or reducing the number of ingredients in processed food is taking form in several different ways. For example, many manufacturers, particularly those that make products targeting young consumers, are eliminating high-fructose corn syrup from their product lines to address consumer concern about the impact the ingredient is having on obesity and other health issues.

Updating facility auditing requirements, at retail, foodservice and manufacturing operations, has been largely left to trade associations and the companies themselves. A single incident of foodborne illness or death linked to a store commissary, a restaurant or a processing facility is all it will take for consumers to demand government action to raise standards and increase inspections.

On compliance issues, FSMA requires companies to collect verification data of their supply chain’s adherence to regulations for up two years and have it accessible within 24 hours. Similar to Sarbanes-Oxley, CEOs are responsible for verifying the compliance of their supply chain under FSMA.  Given these risks, companies have started to automate their management of compliance documentation. Now forward-thinking companies are applying the same technology to ensure that information supplied by trading partners on products such as gluten-free goods or items containing nuts is frequently updated to avoid lapses that could lead to lawsuits and worse.

There certainly are a few different visions of the future of food safety. One commonality is that consumers will continue to demand an even safer food supply chain.  If companies don’t pursue this goal, legal action or governmental regulation will step in to encourage change.

Maria Fontanazza, Editor-in-Chief, Innovative Publishing Co. LLC
From the Editor’s Desk

Feeding the Fear and The Battle to Regain Consumer Trust

By Maria Fontanazza
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Maria Fontanazza, Editor-in-Chief, Innovative Publishing Co. LLC

When it comes to educating consumers, the process of building trust goes beyond providing research and scientific information. Consumers respond to having connections and shared values related to food safety, the treatment of animals, and nutrition. However, today’s crowd-sourcing environment has served to both enlighten and distribute information that isn’t always fully understood by consumers.

As food companies are facing increasing pressure for transparency, they’re grappling with more effective ways to communicate what’s in their products. “That’s a healthy part of the marketplace, and there’s nothing wrong with food companies responding to consumer demands,” says Jayson Lusk, Regents Professor and Willard Sparks Endowed Chair in the Department of Agricultural Economics at Oklahoma State University. In many cases, when companies provide more information about certain ingredients, it puts them in a difficult position. “Often, many consumers are not in a position to evaluate or understand why an ingredient is used or evaluate the safety risks, so there are all kinds of biases that consumers have; [for example,] if it sounds like a chemical name, it must be deadly. There are all kinds of misinformation on the Internet about various food ingredients that consumers have easy access to.”

Just giving stats and scientific information isn’t always the most effective route. “People don’t tend to respond to just scientific information. That’s unfortunate,” says Lusk. “The research shows people are more persuaded by stories, by a better understanding of why farmers or food processors might be interested in using a particular ingredient.”

Issues surrounding artificial additives, antibiotics and GMOs are particularly contentious, and marketing and advertising play a big role in shaping public perception. Take, for example, gluten-free orange juice. Most natural juices (not juice drinks) are free of gluten, but labeling them as such opens the door to new markets (or maybe it just confuses people more). “One of the big challenges for a lot of food companies, especially big companies that have multiple brands appealing to different segments, is that on the one hand, they defend the use of certain ingredients [for example, genetically modified organisms],” says Lusk. “At the same time, they offer brands that make claims that say they don’t have those ingredients and make all efforts to make sure we aren’t selling you these things.”

This dichotomy can be perceived as a lack of integrity, because it undermines the message of trust that food companies want to convey to the market. Companies need to explain why they’re using certain ingredients in a product and the impact it has on safety and nutrition. And consumers need to understand that either the addition of or absence of certain ingredients can lead to higher prices. Many consumers are willing to pay a premium for products that are labeled as organic or non-GMO, but many consumers still want food to be affordable.

This year companies are being particularly aggressive in announcing their moves to remove additives or antibiotics, or provide GMO-free menus, but the question remains as to whether this will have a positive impact on the bottom line, as well as whether consumers really understand the implications. In April, Chipotle publicized that it was the first U.S. restaurant chain to use only non-GMO ingredients. However, if you read the fine print, you’ll learn that its tortillas still use additives, and the soft drinks that the chain sells may contain sweeteners from GMO corn. Panera stated its plans for removing artificial additives from its menus by the end of 2016. Kraft’s famous Macaroni & Cheese will no longer have that eerie glow, as the company is nixing artificial flavors and dyes, including Yellow No. 5 and 6. Walmart just voiced its new position on responsible use of antibiotics in farm animals, and so did President Obama—at least in Federal cafeterias.

And in an effort to put the kibosh on the “big is bad” mentality, Hormel has put down $775 million to pick up Applegate Farms, a producer of organic meats. Rest assured, as Applegate tells its irate consumers on its Facebook page, its products will “continue to work toward transparency in labeling” and its “standards and products won’t be changed”. Applegate is doing the right thing. It is engaging with consumers, whether or not it likes what they have to say, and it’s doing so in a non-defensive way.

Beyond this, companies need to really study their consumers, understand their patterns, and learn how to educate them in a meaningful way—beyond a simple label.

I try to avoid food with a lot of extra…crap. But sometimes I’m just too tired (or hungry) to pay attention to every detail on the label. And sometimes I eat that red velvet cupcake at a party and, after examining my florescent tongue in the bathroom mirror, I think, shoot—how much dye was in that??? And maybe I like the idea of slicing an apple that doesn’t turn brown. Then again…maybe I don’t.

Truth is, I’m just not sure yet.

Maria Fontanazza
Editor-in-Chief

Randy Fields, Repositrak
FST Soapbox

Despite FSMA Exemptions, Compliance Will Not Be Optional For Small Suppliers

By Randy Fields
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Randy Fields, Repositrak

The product recall at Blue Bell Creameries earlier this year is yet another example of food safety issues negatively impacting food marketers, growers, processers and manufacturers. We all remember the Peanut Corporation of America’s salmonella outbreak in 2008 and the Jensen Farms listeria outbreak in 2011. Salmonella-tainted eggs in 2010, E. coli in strawberries in 2011, and listeria in caramel apples last Halloween combined with dozens of others during the last six years, have sickened thousands and killed dozens of people.

The brand reputation impact from the incidents at Peanut Corporation of America and Jensen Farms was terminal—both companies went bankrupt. The effect on Blue Bell, while likely not fatal, is expected by industry experts to be substantial and include loss of revenue and market share. The company has already announced plans to lay off more than 1,000 workers as a result of the recall.

In addition, growers saw cantaloupe consumption take a nosedive after the Jensen Farms listeria outbreak, which was one of the worst foodborne illness outbreaks in U.S. history in terms of number of deaths. They are only now seeing sales levels return to those before the incident. And because the farm itself went out of business, personal injury lawyers went after the companies that sold the disease-ridden cantaloupes—the retailers. By virtue of last year’s out-of-court settlement by Walmart on the Jensen Farms lawsuit, both suppliers and retailers are now responsible for everything they sell.

Enter the Food Safety Modernization Act, signed in 2011 and about to begin finalization in August. FSMA mandates that retailers and suppliers have documentation that verifies their supply chain’s regulatory compliance is readily accessible for government inspection. Add these records to the business relationship records that retailers and suppliers should already be maintaining (including indemnifications and certificates of insurance that help manage brand risk), and you’d think our risk of foodborne illness is about be eradicated.

Although FSMA represents the most sweeping change to our food safety laws in the last 70 years, it may not have the greatest impact where the supply chain is most vulnerable. Today the largest suppliers that sell the majority of our food have very sophisticated systems to ensure safe food production and transportation. This group will have the easiest path to compliance with FSMA, and they most likely already hold themselves to a higher standard. It’s actually the smaller suppliers, which likely do not have the available resources or sophistication to comply with FSMA requirements, that will be exempt from certain documentation under FSMA based on their size. This group of suppliers is growing rapidly to meet consumer desire for fresh food that is locally grown and produced. Unfortunately for them, it’s only a matter of time before wholesalers and retailers decide that the risk is too great to continue to do business with these small suppliers.

The good news is that technology exists that can help small suppliers reduce risk in their extended supply chains. Affordable, interoperable systems have been developed to address the market need for receiving, storing, sharing and managing regulatory, audit and insurance documentation. Suppliers of any size can also track products as they move through the supply chain and trace them back in the event of a recall. This move to automation will help all suppliers not only meet the demands of FSMA, but also establish a base for retailer and consumer demands for transparency in the supply chain going forward.

Having a comprehensive food safety system is quickly becoming a competitive advantage. Retailers and consumers are looking for those suppliers that have an unblemished safety record and are transparent about their safety processes, so the time is now for small suppliers to hold themselves to a higher standard than FSMA requires for future business opportunities. The stakes are just too high for retailers and wholesalers to not verify that everything they sell to consumers is produced and transported safely.