Modern consumers give great importance to the quality and price of the products they purchase. As consumers demand more information about the origin and authenticity of the products that they consume, forward-looking brands seek to reach new levels of transparency. The challenge is to accurately provide a higher level of detail when faced with an increasingly complex supply chain. Moreover, tracking and documenting every step in the supply chain is no simple task. Supply chain transparency goes well beyond gaining visibility into the extended supply chain. It is the process by which a company acts on the insights gained through greater visibility to manage risks more efficiently. In today’s competitive market, establishing consumer loyalty is easier said than done. It takes a lot more than a few rewards plans to keep a consumer from slipping to the competitors. Brands must build trust and instill confidence in their customers that the goods they provide are of the best quality, safe, and authentic. Unlike before, today, consumers want to understand the journey a product goes through before it gets to the store shelf – and this is especially true for food products.
The Importance of Supply Chain Transparency in the Food Industry
Improved food quality and supply chain transparency have become increasingly important to many manufacturers in the food industry as consumers increasingly seek these qualities in the food products that they purchase. Furthermore, social media has raised the bar, making it much easier for customers to force transparency on brands and manufacturers who do not embrace this movement. The ones failing to adhere to do so often end up with bad goodwill and negative word of mouth against the brand. Here are some of the main reasons why supply chain transparency is the need of the hour for every company in the food industry:
Adhering to regulations
Food manufacturers continue to face numerous challenges in managing the food safety. Apart from satisfying consumer demand for increased supply chain transparency, the food industry is becoming increasingly regulated by the U.S. Food and Drug Administration as part of the Food Safety Modernization Act (FSMA). FSMA requires companies in the food industry to increase their focus on prevention rather than a response to contamination incidents, which will require a comprehensive view of the entire supply chain, something many food suppliers struggle within today’s global economy. This makes the need for supply chain transparency all the more critical. Without the ability to track and trace through the entire supply chain, it becomes complicated to ensure that contamination has not occurred at any point in the food manufacturing process. By leveraging advanced technologies like big data analytics, track and trace, and supply chain mapping, food manufacturers, and suppliers can increase the supply chain transparency.
Building customer loyalty and trust
Though manufacturers will have the ability to pinpoint the cause of contamination with the help of increased supply chain transparency, the consumer will always blame the supplier regardless of the actual source of contamination. Though not every customer will be interested in farm-to-fork traceability, the ability to display supply chain transparency following recall is one of the best ways to reduce the impact and loss of consumer trust. Publicly accepting and addressing the source of the contamination and effectively demonstrating the steps taken to ensure the cause allows the supplier to rebuild that trust and display the ability to help prevent future outbreaks.
Establish brand equity
When manufacturers in the food industry build supply chain transparency and provide customers with information about where their food has been, what ingredients have been used, and how fresh it is, it builds brand equity. Building brand equity not only requires the technological ability to have supply chain transparency, but also the motivation and willingness to provide consumers with the necessary information as a standard practice and not just when there is a contamination. Though this may seem to be too much of a hassle for food manufacturers, increased public transparency will help improve a brand’s value as customers appreciate the steady flow of information and consequently become more loyal to the brand.