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If there was ever a time when the food industry needed to build the three big T’s, the time is now. A terrific short article on this topic appeared in a recent issue of Environmental News Network.
A Food Marketing Institute press release announcing the results of its survey, U.S. Grocery Shopper Trends 2007, clearly showed that “consumer confidence in the safety of the food supply has dropped dramatically. Confidence had consistently hovered in the 80th percentile for years, but dropped to 66%, the lowest point since 1989.” Small wonder with the food scares we’ve all experienced of late.
Besides recent incidents like the Topps Meat, Westland Meat and Menu Foods debacles, several other factors have led to a the food industry’s reevaluation of its product safety practices, further fueled by a decided decrease in consumer confidence:
• Increased consumer health concerns
• New government regulations
• Growth in global supply chains
• Increase in marketplace competition
A major solution advanced by a number of sources, including Forbes.com, is product traceability. This means tracing the flow of all raw materials and ingredients from producers to food manufacturers. It also entails following finished products through distribution channels to retailers. This has been dubbed a “field to fork” strategy. This makes great sense.
Research firm, The Aberdeen Group, recommends that food companies “implement technologies with core track and trace capabilities to achieve best in class performance.
Bottom line: traceability when it comes to food products being sourced from all over the world, leads to transparency. Transparency helps to rebuild the public trust. Trust, in turn, will lead to consumer loyalty, increased revenues and profitability.
For food companies, in particular, it’s the right thing to do, and as the article so aptly states: “. . .it’s also good business.” I’d also add that in the food business, it’s best to be proactive to potential problems, rather than reactive. After all, tainted food is more than a major headache for manufacturers and consumers; the consequences can be deadly.
Questions:
• Would you as a consumer be willing to pay a little more for food brands if they advertised that they had implemented traceability technologies to ensure safety?
• Would you be willing to write or email food manufacturers and ask them to be proactive by implementing traceability technology in their plants?
• What do you need to see food manufacturers do to gain your trust and your consumer dollars?
I’d love to hear from you.
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Comments
Ted, this is a very important post for many reasons, and applicable to much more than food companies (although they've had the most press lately).
As marketer's, we must do what we can to grow the business and one of the ways we can do this is to strengthen and protect the brand. We don't do ourselves any favors when we spend millions on brand positioning, and then flush it down the toilet with safety incidents.
Supply chain management is the concern of not just your ops people, CFO and CEO. Marketers have a huge stake in knowing EXACTLY what's in the supply chain from beginning to end.
Posted by: Paul Barsch | 05.20.08
Paul,
How right you are. . .and how insightful. Every company's management group ought to push for this. They all should know this information. And then marketing departments ought to let their customers know that this is a focal point of the company. Ensuring safety as well as product efficacy should be job #1.
One of the industries my consultancy works with closely is the toy industry. How important is the issue of trust, transparency and traceability for this industry, given recent events in the toy business?
If companies are to gain consumers' confidence for the long haul, they will have to focus on these crucial aspects of knowing where every raw material and component part is sourced from and manufactured. Regardless of what those finished products are.
Thanks for your comments, Paul. I appreciate it.
Posted by: Ted Mininni | 05.20.08
As someone, among many others, who look at labels carefully, I would pay more for traceable food. Absolutely.
If, by your question, you are asking if credible tracing would win my trust and respect? The answer is an unqualified yes.
I think it is fair to say that my opinions represent a very large group of people that care a *lot* about the health and safety of food.
Posted by: Neil Anuskiewicz | 05.27.08
I concur wholeheartedly, but need to mention that this is just part of a much larger picture. Concern over what we eat has been mushrooming for sometime, and as we get to live longer, our health becomes even more important. WE ARE WHAT WE EAT, and thanks to the internet, information is much more easily sourced now. For purists and those prepared to make the (worthwhile) effort, direct marketing channels like CSA's and other box systems that deal directly with the primary producer have flourished, and will only continue to do so. The sustainable and environmental benefits of these systems will only make them more worthy, and as these producers are usually Certified Organic, they have full traceability for all their inputs and activities.
Posted by: Andrew Hearne | 05.27.08
I believe you're right, Neil. The recent scares about tainted human and pet foods have only heightened consumers' concerns about sourcing. As a toy marketer, I can also tell you first hand that lead paint in toys has been another huge cause for concern. Given this, I truly believe source information has to be there if companies want to gain consumer confidence. . .and they should want to. Let's hope this becomes standard operating procedure in all industries.
Thanks for weighing in, Neil.
Posted by: Ted Mininni | 05.28.08
You've made some good points, Andrew. Let me add a bit more to your thoughts. As Western countries experience a rise in the median age of the populace, health-related concerns naturally increase. With so much talk about food and nutritional issues in the media, and with older consumers attention on these matters, it makes sense for food companies to make absolutely sure they can trace every ingredient and every manufacturing process involving their products. Whether foods go through a rigorous certification process due to organic claims, or not, traceability and transparency are an absolute "must" given recent debacles in the business.
Thanks for adding more depth to the conversation, Andrew. I appreciate it.
Posted by: Ted Mininni | 05.28.08
I think more source information could become a practical and marketing imperative.
It has come to the point where many people want to know exactly what they are buying and where everything came from.
The firms that do this right and credibly are in an excellent position to do very well in the market.
You are correct to point to the dog food, toys, and other incidents that have brought home the importance of this issue in very stark and scary terms.
These incidents were quite simply completely unacceptable.
Posted by: Neil Anuskiewicz | 05.28.08
"It has come to the point where many people want to know exactly what they are buying and where everything came from." Exactly, Neil. This is no longer a luxury for companies to invest in the necessary tracking of their sourcing; it is a necessity.
I think consumers in this country have made their feelings known about potentially dangerous products. Companies should not wait for governmental oversight. They should act now. This will go a long way to building consumer confidence and trust.
Thanks, Neil, for adding your insights. Much appreciated.
Posted by: Ted Mininni | 05.28.08
Yes, and industries that self regulate are often spared the often Byzantine regulations that would be imposed by Congress.
It is better to change from within than to tempt Congress to act.
Posted by: Neil Anuskiewicz | 05.28.08