More than ever, consumers want to know how their food is grown, handled, shipped, produced and packaged. In the words of Charlie Arnot, CEO of The Center for Food Integrity: “Transparency is no longer optional. It’s a basic consumer expectation.”
Interestingly, this increased social and environmental concern is shared by consumers across income brackets. According to the 2015 Nielsen Global Corporate Sustainability Report, an incredible 68 per cent of American consumers earning $20,000 or less are willing to pay more for products created by companies committed to sustainability. As you would expect, millennials lead the trend, with 73 per cent willing to pay more for products from companies committed to the principles underlying the good food movement.
This hunger for transparency has been driven by a number of diverse factors. As a whole, consumers are more educated than ever and are putting that knowledge to use, making careful and informed purchasing decisions. Over the last decade, shoppers have become increasingly health conscious and troubled by the presence of additives, artificial and genetically modified ingredients. In addition, the global obesity epidemic has caused great concern and there is, in general, greater awareness of food intolerances and allergies. There has also been huge growth in veganism, Fairtrade, the fresh, natural, organic, gluten-free and dairy-free movements. On top of this, there is a growing cynicism and distrust of big food companies – according to Nielson’s 2017 report into transparency, only 44 per cent of consumers trust industrially prepared foods.
As a result, many more consumers are now interested in knowing exactly where their food has come from. Some food makers have responded to this by printing the name and location of the farm where the product was grown, along with the signature of the producer, on their packaging. Technology can help with this as shoppers can scan a package and learn, in the case of a fish, when it was caught, on what boat and what the name of the fisherman is. For example, One Degree Organics, uses an on-package QR code that shows farmer profiles and Bellucci lists the harvest date, types of olives and lot number on its extra virgin olive oil bottles. Similarly, all Burts Potato Chips bags are stamped with the name of the Master Fryer who cooked the crisps – as a seal of authenticity and way of communicating that “a somebody – not a machine – is responsible for each bag of crisps that leaves the warehouse.”
Providing this sort of information shouldn’t be viewed as just an expensive and inconvenient public relations exercise. According to Label Insight, food manufacturers that adopt “complete transparency” are rewarded with consumer loyalty of about 94 per cent and 39 per cent of U.S. consumers would switch to brands that provide clearer and more accurate product information.
Good for business
What’s more, becoming transparent is always good for business as it helps identify inefficiencies within the supply chain and inevitably results in internal improvements therefore increasing competitiveness. Businesses need to know their supply chains – after all, a business is only as strong as the weakest link in its supply chain and the rate of supplier failure is alarming.
Research conducted last year by Tungsten Network, in conjunction with Forrester, found that eighty-four per cent of businesses have suffered from some form of supplier failure in the past two to three years and this can result in stunted business growth and increased risk levels. For this reason, it is vital that businesses nurture their supply chains and drive transparency throughout. To help businesses achieve this, we have recently partnered with Mastercard and Microsoft to develop Mastercard Track – a new global trade platform that will give customers deeper insight into their supply chains.
Beginning in early 2019, businesses will be able to maintain, retrieve and exchange key information relating to themselves and their trading partners through the Track Trade Directory, a secure, permissioned repository of over 150 million company registrations worldwide. This central directory will integrate feeds from more than 500 sanction, watch and law enforcement lists into one place, while also keeping a close watch on any negative media, monitoring more than 21,000 global sources for reports of financial crime.
Mastercard Track is also good for suppliers as they gain greater visibility of their cash flow, as well as having a more accurate understanding of when they can expect to get paid. The platform can also be used to acquire credit score checks, ensuring any new companies are financially sound.