While the U.S. has been slower to adopt traceability legislation than Europe, it is only a matter of time before similar rules affect retailers and suppliers here. Is the industry ready?
By Donal Mac Daid
Product traceability is becoming critical in securing consumer confidence and for good reason. The ability to trace and document sources and distribution of food is already a legislative requirement in the European Union and regulations in the U.S. such as those called for in the Trace Act of 2009 are currently in motion. The goal of the proposed legislation is to “improve the safety of food, meat, and poultry products through enhanced traceability…”
The U.S. has been slower to adopt traceability legislation compared to Europe. However, it is only a matter of time before similar laws will be imposed on U.S. businesses and the food industry will be behind the eight ball.
A series of recent incidents in the U.S. have increased consumers’ worries and increased their desire for more information about food. For many years most consumers simply assumed that the supply chain for food was reliable and safe. Recent incidents, such as the egg recall, have shaken this faith.
As an example, a Harris Interactive 2009 survey of 2,078 adults conducted for the American Society for Quality produced these findings:
- 93% of adults say food manufacturers, growers or suppliers should be held legally responsible when individuals are fatally sickened by tainted food.
- 61% of U.S. adults feel the U.S. food recall process is only fair or poor.
- 82% of adults believe that the food industry should be required to follow international standards on food safety.
Some values have proven more fickle in these tough economic conditions—for example, consumers have been less willing to pay more for organic produce. At the same time, concern about food safety, and in particular about where food comes from and what are its contents, is building.
Although the U.S. government is exploring new food traceability legislation in response to consumer concerns, new regulations have not yet been enacted. This means that food manufacturers and retailers must decide on their own if and when they should implement traceability in their systems. Should they wait until they are legally obliged? Do they put the building blocks in place now so they have basic traceability functionality and can easily step up to full traceability when they need to? Or do they go to full implementation now and put in place systems that conform to global standards and best practices ahead of the legal requirement to do so?
One way to help make these decisions is to consider why a retailer or manufacturer might hesitate to implement traceability now. One reason might be a natural resistance stemming from feeling pressured into it by government.
The bottom line is that every food scare we have seen over the last decade undermines consumer confidence in the food industry’s ability to prevent contamination or quickly remove contaminated products from store shelves. For wholesalers or retailers, reacting after the event is simply not an option. By then, consumer trust is already destroyed.
Companies should regard traceability as an opportunity to engage with their consumers, earning their trust and confidence. With each high-profile recall, consumers become less loyal to a particular brand. When retailers show a commitment to traceability through the whole supply chain, it demonstrates to consumers that they are very serious about the provenance of every product and every ingredient. Traceability has the potential to sit alongside other marketing initiatives—such as green packaging, recycling and reusable bags—in the retailer’s efforts to win and retain customers.
It’s not difficult to see how a scenario such as this could link in with a loyalty program, where customers have opted-in to have their personal contact details added to the retailer’s database. This would dramatically increase the chances of manufacturers and retailers contacting consumers and recalling a contaminated product before it reaches the dining table.
Finally, most companies need to track products beyond their own shores. A uniform set of standards for traceability would enable retailers to efficiently track goods throughout the supply chain. The lack of standards could be the single most serious threat to the international adoption of traceability, and therefore to a global collaborative effort to protect consumers.
Donal Mac Daid is vice president of product marketing with Aldata Solution, Inc., a provider of retail industry- specific solutions for business operations improvement and process optimization.