The food industry is on the cusp of a brave, new world. For the first time since the the "good old days" when consumers personally knew the local farmers they bought their food from, the food supply chain is approaching 100% traceability — thanks to emerging technologies like the blockchain.
By implementing blockchain technology, farmers, processors, packagers, distributors, transporters, wholesalers, retailers, and other participants on the long and complex supply chain have a unique opportunity to provide the same, if not more, transparency and traceability than ever before. Every step of the (on average) 2,000 mile long journey food travels from its source to the consumer gets recorded in a digital ledger.
While this allows supply chain participants to increase efficiencies, cost savings, and most importantly, food safety and integrity, it has other benefits for consumers as well. By simply scanning a barcode with a smartphone or entering a product code online, customers can trace the product they are about to purchase or consume — from the store all the way back to the farm and every step in between.
But there are concerns in the industry about sharing this kind of information:
- Consumers will be confused and overwhelmed with the amount of data.
- Today's consumers are so far removed from the realities of food production that they won't know how to categorize this information.
- Lastly, a very popular concern is that supply chain data is useless to consumers. What are they going to do with that information?
Regardless of which side of the fence you are on, consumers are demanding more transparency. Let's have a look at their deeper reasons for it.
Consumers Demand More Transparency About Where Their Food Comes From And How It Was Produced
The fact that food traceability is quickly becoming a necessity cannot be disputed. The International Food Information Council Foundation (IFIC) just identified it as one of the top five trends in the food industry in 2019. Joseph Clayton, CEO of the IFIC Foundation, explains:
“Americans have a growing appetite for more information about their food, and technology is enabling eaters like never before. It’s also driving transparency across the food supply chain.”
Reason #1: Consumers Want To Eat Healthier Food And Therefore Want To Know Where Their Food Comes From
According to the same 2019 IFIC study, most food and beverage purchasing decisions are driven by
- Taste (86%),
- Price (68%), and
- “Healthfulness” (62%).
While consumers still want affordable and tasty food, they are also looking for added health benefits. In particular, Gen X and mothers are becoming increasingly educated and consciously taking steps to make healthier food choices to prevent cancer, diabetes, and heart disease. Over the past years, label and ingredients list literacy has significantly improved — driving the demand to know more.
According to the Label Insight and the Food Marketing Institute Survey 2018, the vast majority of consumers (69%) say it is extremely important or important that brands and manufacturers provide detailed information such as what is in their food and how it is made.
But here is the good news: The same report also highlights the huge jump of shoppers willing to pay more for or switch to products produced in a more sustainable manner from 39% in 2016 to 74% in 2018.
Reason #2: Environmental Sustainability And Regenerative Agriculture Are Impacting Purchasing Decisions
After knowing where the food comes from, sustainability is the second highest ranked concern, according to the IFIC study: 55% of respondents said that sustainability of the food products they purchase or consume is important (33%) or even very important (22%) to them.
In addition, consumers want to buy fresh, natural food containing familiar ingredients that are produced in a more environmentally, sustainable way.
But while some consumers might take the manufacturers' claims at face value, the trend is to seek trustworthy third-party sources to verify the claim. Realistically, consumers won't verify every single claim for every product, but simply knowing the information is out there and accessible to the public shifts the currently rather skeptical perception.
Reason #3: Consumers Are Losing Trust In Food Producers
The past few years were disastrous in regards to food safety incidents and associated recalls. As a result, only 24% of consumers say they trust food producers completely, while 66% place full responsibility for the incidents on how the food was produced.
On the bright side, trust in government agencies has increased: 45% of consumers say a government agency would be their top source for information about a recall.
In today's digitalized economy that places all kinds of information at the tips of our fingers, the cries for food traceability and transparency will only become louder and more insistent. Understand WHY your target audience is asking for more information, what kinds of data they are looking for, and what they plan to do with it before defining business processes to fill that void. Once the processes are nailed down, evaluate how blockchain and smart sensors need to be implemented.