From The Editor | February 17, 2016

How The Food Industry Is Evolving Toward A More Transparent Supply Chain

Sam Lewis

By Sam Lewis

How The Food Industry Is Evolving Toward A More Transparent Supply Chain

With the food supply chain undergoing shifts of revolutionary proportions, the importance of industry collaboration around standards to enhance efficiency has become crystal clear. Consumers want to know more about their food and where it comes from, which represents a major opportunity for food manufacturers and their trading partners to implement traceability programs based on GS1 Standards — the most widely used supply chain standards in the world. To learn more about the current state of supply chain transparency, I recently spoke with Angela Fernandez, VP of retail grocery and foodservice at GS1 U.S.

Food Online: Industry experts are saying 2015 was a “bellwether year” for the food supply chain, in that consumer demand for information majorly influenced manufacturer decisions. Do you see this further shifting in 2016?   

AngelaFernandez: We believe that 2016 will be the year of the empowered consumer. Attitudes and paths to purchase are changing and food companies recognize they need to put the consumers’ concerns first or risk losing sales. That’s why we continue to see proactive responses by all stakeholders in the food supply chain on sustainability and socially-conscious claims, such as the cage-free eggs announcements from earlier this year. There is a real sea change among trading partners where the traditional method of delivering food from farm to fork is going to shift toward more standardization, more technology, and more ways to show transparency and food origins, ingredients, and other product information for the consumer. Also, with so much national attention on foodborne illness outbreaks, there is a real opportunity for all members of the food supply chain, particularly in fresh foods, to evaluate the effectiveness of their traceability programs.

Food Online: How does supply chain visibility based on standards support the growing need to respond to such a strong call for transparency?

Fernandez: More Americans are opting for a healthier lifestyle. They are also asking more questions about recalls and the safety of the food supply chain overall. The consumer’s expanded knowledge base is pushing the food industry to shift toward greater vigilance in many areas and recognize the need to digitally connect to the consumer. To better track and trace food, the industry needs increased collaboration between industry stakeholders to establish end-to-end supply chain visibility based on GS1 Standards.

GS1 Standards enable companies to globally and uniquely identify products in the supply chain in order to optimize visibility and efficiencies. Using GS1 identification numbers, including the Global Trade Item Number (GTIN), companies around the world can identify products, as well as dynamic information, such as expiration date, and batch/lot numbers, to facilitate the communication of product-specific information whenever a barcode is scanned.

Through further industry collaboration and better education about the benefits of implementing GS1 Standards for supply chain visibility, the industry can put the consumer first with a proactive approach. GS1 U.S. is facilitating these important discussions through two industry initiatives — the GS1 U.S. Retail Grocery Initiative and the Foodservice GS1 U.S. Standards Initiative. Both help addresses broad industry challenges around traceability, improving product information, and operational efficiencies. By bringing together industry stakeholders, the initiatives are identifying the ways GS1 Standards can be further leveraged for supply chain challenges that ultimately affect a company’s ability to provide the consumer with the transparency they desire.

But, it’s important to note that full supply chain visibility using GS1 Standards does not happen overnight. It takes time — even years — for all supply chain partners to fully implement and leverage standards, technological capabilities, workforce training, and other factors necessary for full traceability to be realized. So, as the industry moves at lightning speed, there is no time to waste when it comes to implementing standards.

Food Online: How does data synchronization help enhance transparency?

Fernandez: For more than 10 years, the Global Data Synchronization Network (GDSN) has been an important piece of the GS1 System of Standards. The role of GDSN is to help ensure data is shared between trading partners in accordance with GS1 Standards and connects the physical flow of goods and services to the flow of information. With the GDSN, food manufacturers, distributors, retailers, and operators have access to the same continuously refreshed data.

The GDSN allows for the continuous sharing of product information, such as package measurements, nutrients, ingredients, allergens, and whether the food is gluten-free, Kosher, Halal, vegan, or organic. These are claims that have risen in importance to consumers, as well as trading partners, who are ultimately looking to share more complete product information to increase sales. In May, the GDSN Major Release 3.0 will be rolled out in response to industry needs. This update is designed to eliminate current inefficiencies with data exchange and enhance speed-to-market to help companies keep pace with today’s business environment.

Food Online: What are food manufacturers doing to ensure they are sharing quality data?

Fernandez: Food manufacturers are prioritizing data quality improvement because of the need to seamlessly share product information with their trading partners and consumers. There is a huge opportunity for companies to more fully leverage data analytics and consumer-generated insights to create the optimal customer experience. Supply chain stakeholders need to first work on foundational supply chain data and the processes that govern it in order to take that next step toward improved consumer engagement via actionable data.

Best practices on improving data quality are being developed through the GS1 U.S. National Data Quality Program. As part of the program, a manufacturer can take action to rid themselves of the same old vicious cycle of data inaccuracies. Leveraging data quality effectively not only allows businesses to share rich product data amongst each other, it also delivers on the consumer’s expectation of trustworthy and consistent information.

Food Online: Does a transparent supply chain mean a safer supply chain?

Fernandez: “Transparent” does not always equal “safe,” as the supply chain is only one piece of the overall picture of food safety. For example, proper store cleanliness procedures (HACCP procedures) are critical to ensuring food safety and these issues can occur independently of traceability or transparency programs. But, once an issue is identified, you need to locate or isolate product, traceability is the tool to do it.

It really all comes down to improving consumer confidence in food. There is more work to be done to give consumers the information they want in a consistent format. It will take tremendous collaboration among businesses, trade associations, industry groups, and regulatory agencies to achieve that clearer view. Manufacturers, distributors, retailers, as well as solution providers, need to join together to fully implement the standards and best practices that can enable the next phase of the industry’s evolution.