Reasons to Invest in End-to-end Supply Chain Traceability

In October 2022, the World Health Organization (WHO) officially launched its Global Strategy for Food Safety 2022-2023, which will guide members in planning, implementing and monitoring national action plans to reduce foodborne illnesses. According to Food Safety Magazine, the strategy will also contribute to making food systems safer by promoting global cooperation—between countries and interconnected supply chains.

The strategy’s targets for 2030 are ambitious as the WHO works to bring government institutions, UN agencies, educational institutions, NOGs, the private sector, and public health and food safety experts together. The aim is to reduce the burden of foodborne illnesses by slashing the number of foodborne diarrheal diseases by 40% in vulnerable populations. The strategy also has a goal to achieve 100% of functional coordination mechanisms to manage foodborne events and boost laboratory capacity for surveillance.

While there are five main priorities laid out in the overall strategy, one key area of focus is critical for the strategy’s overall success: that each WHO member establishes means to improve their respective nation’s food supply chain information and regulations concerning food traceability.

THE CHALLENGES OF TRACEABILITY IN THE FOOD AND BEVERAGE INDUSTRY

The sheer complexity involved in tracking and tracing a food item throughout a supply chain, from farm to fork, was conventionally not a priority for many agri-food companies; they considered traceability inefficient, overwhelming, and cost-prohibitive. In the eyes of many agri-food businesses, the costs and perceived hassles greatly outweighed the benefits. Traceability was relegated to a “nice-to have” instead of a “must-have.”

While serialization initially held promise to verify food and beverage products, it is really just the first step to comprehensive track-and-trace methodologies; serialization is about assigning serial numbers to a product, whereas traceability is the action of using those numbers to trace a foodstuff up and down its supply chain—and its leap to another supply chain.

According to Food Safety Magazine, conventional traceability solutions “struggle to function smoothly in a true end-to-end system as data sharing between trading partners requires costly customization.” This is further exacerbated by supply chain stakeholders’ disparate to the right tech infrastructure, such as cellular service, power and the Internet, compromising data collection, specifically upstream from some actors.

Nevertheless, thanks to advances in comprehensive traceability technologies for the food and beverage industry as well as global standards, namely GS1’s EPCIS norm, the tech and data gaps are now closing.

Finally, as more and more countries adopt modern legislation with regard to food safety, digitized traceability is now the foundation for F&B businesses to ensure compliance and resiliency in the event that a foodborne illness arises. A case in point? The US Food and Drug Administration (FDA)’s recent final ruling on the Requirements for Additional Traceability Records for Certain Foods (Food Traceability Final Rule) under the Food Safety Modernization Act (FSMA) Section 204(d).

The legislation means that American agri-food companies and their international partners will be required to provide real-time traceability information to the FDA within 24 hours of an official request. Enforcement for non-compliance can range from penalty fees to court action and a suspension of a facility’s ability to sell or export a product. Other countries looking to do business in the United States or model their food safety initiatives after the US are likely to follow suit.

How can companies in the food sector be ready?

BENEFITS OF INVESTING IN END-TO-END SUPPLY CHAIN VISIBILITY IN THE FOOD SECTOR

Compliance with national and international legislation is a situation that forces the hands of stakeholders in the food and beverage industry to adopt a traceability solution. Nevertheless, several other advantages must be underscored.

FOOD SAFETY AND QUALITY

As an offshoot of regulatory compliance, businesses can prevent food recalls due to pathogens as well as safeguard consumers from potentially deadly illnesses. With better visibility in their supply chains, companies can identify and address weak spots that compromise the quality of their products, whether through their operations or those of their current partners.

ANTI-COUNTERFEITING

Particularly with luxury food products or those with special designations, such as Appellation d’origine contrôlée (AOC) in French and the EU’s Protected Designation of Origin (PDO), traceability can assist weed out counterfeits and protect brands from food fraud—anything from country-of-origin fraud, false claims about organic food, seafood smuggling, counterfeit olive oil, wines and chocolate, and even tanker milk fraud.

IMPROVED BRAND PERCEPTION

Food organizations that collaborate with supply chain partners to guarantee the utmost transparency regarding ethical sourcing, product source, ingredients, etc., show that they are aligned with their consumer ethics. Customers are more prone to reward these businesses with their collars.

LESS WASTE

The United Nations estimates that a third of all food produced yearly goes to waste. By leveraging an end-to-end traceability platform, agri-food companies can reduce the risks of food recalls, better manage supply vs demand, and re-calibre lead times with clients to eliminate food waste and associated inventory costs.

ADDITIONAL REVENUE STREAMS

Reducing food waste is one thing. But imagine if an agri-food business could tap into the tremendous opportunity the upcycled food waste market offers. Research shows that the global market for products from food waste is expected to grow at a CAGR of 4.6% to reach US $83.26 billion by 2032.

FoodDive and Forbes point to several examples of the revenue potential: using fruit waste to make snacks and beverages, growing mushrooms in coffee grounds, and bread doctored with rice waste. A new breed of agri-food businesses is sprouting up thanks to upcycled food alone.

GAINS IN EFFICIENCY

Poor food supply chain visibility and control can bog down production cycles, cause delivery delays, and generate spikes in logistics costs. Apart from crushing the end consumer experience, unproductive supply chains in the food industry can lead to penalties or service credits for not respecting SLAs. When considering multiple partners throughout one company’s supply chain ecosystem, these fees can quickly ramp up.

BETTER ESG SCORES

In the fight against climate change, food and beverage companies are adopting best practices and traceability solutions to monitor and reign in their Scope 1, 2 and 3 greenhouse gas (GHG) emissions. End-to-end supply chain visibility can pave the way to better environmental, social and governance (ESG) integration along an entire supply chain as companies consistently evaluate the impact of their and partners’ operations on local communities and economies.

It may seem daunting for a company in the food and beverage industry to overhaul its traditional supply chains and bring about a level of digital transformation to guarantee comprehensive visibility among all stakeholders. With the right traceability platform and partner, a project of this magnitude can be scaled with minimal disruptions to operational workflows and without breaking the bank.

Contact OPTEL today to learn more about how not all traceability platforms are created equally. Schedule a customized demo for your unique business reality.

Top Reasons Food Manufacturers Should Invest in End-to-end Supply Chain Traceability