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How consumer demand is disrupting the food and beverage industry

Find out how supply chain visibility can help you meet consumer demands for transparency, sustainability and authenticity.

Today’s consumers are more knowledgeable and more discerning when it comes to the food and beverage products they buy. As a result, it’s no longer enough for a company to pay lip-service to social responsibility issues, they must act. One step to achieving these goals is through supply chain visibility, enabling manufacturers to track exactly what goes into their products, and make changes that benefit the consumer and the environment. Those who succeed in producing responsible, honest products are set to gain significant market share, while those who do not risk losing out.

Key Ingredients: Transparency, Sustainability and Authenticity

Consumer Demand #1: Transparency

Safety First

One of the biggest fears for food and beverage manufacturing companies today is a product or ingredient being contaminated or out of specification. The ability to provide transparency of origin has never been more important. Traceability up and down the supply chain is critical to manufacturers knowing where the ingredients came from, where they were used and where their products went. The process manufacturing supply chain is long and complex. It includes international and domesti­cally sourced processors, distributors, shippers and consumers. With all this complexity, companies still must maintain proper regulatory standards while keeping high quality services, in what is an increasingly competitive market.

Achieving this transparency is complex, a simple product like a pepperoni pizza is actually made from nearly 100 ingredients supplied from dozens of suppliers in multiple countries, this is because whilst the pizza itself seemingly only has a few ingredients some of its ingredients like the vinegar in the dough or the slices of pepperoni sausage are made from dozens of ingredients and it all adds up to a difficult problem to manage.

Consumer fears over product quality and source are driving the change for greater transparency in labelling and accessible information on a products origin. This is all for good reason, food recalls are a common occurrence in the US alone a product is recalled once every three days and much of the recall information is often still on paper. Hundreds of paper records filed/collated and stored just in case product should be recalled. Even manufacturers who boast electronic traceability often don’t have a joined up system and have just re-entered paper documents into a computer system. This introduces the risk of:

  • Lost records creating gaps in the traceability record chain
  • Incorrectly filled in sheets or badly written records?
  • The mis-reading of labels and quality data?
  • The mistyping into the computer system

Traceability is still therefore one of the biggest reasons for implementation of software solutions into the food and beverage industry and it’s easy to see why. The costs and fines imposed by the retailers can be disastrous for a manufacturer who cannot provide traceability information in a timely manner.

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IFS for transparency

The European Food Safety Authority (EFSA) and the U.S. Food & Drug Administration (FDA) are two of the major influencers on global legislation for food safety. In most countries, product recalls of some type occur every week. Quality failures, contamination and major recalls or a poor response to a recall can do great damage to a brand’s reputation. IFS solutions include standard end to end ingredient and product tracking for all inventory, traceability starts when the goods arrive and are tracked through production to finished goods and the distribution chain.  Recall information is available at the press of a button ensuring risk from recalls are mitigated.

Start your project

Safety First

One of the biggest fears for food and beverage manufacturing companies today is a product or ingredient being contaminated or out of specification. The ability to provide transparency of origin has never been more important. Traceability up and down the supply chain is critical to manufacturers knowing where the ingredients came from, where they were used and where their products went. The process manufacturing supply chain is long and complex. It includes international and domesti­cally sourced processors, distributors, shippers and consumers. With all this complexity, companies still must maintain proper regulatory standards while keeping high quality services, in what is an increasingly competitive market.

Achieving this transparency is complex, a simple product like a pepperoni pizza is actually made from nearly 100 ingredients supplied from dozens of suppliers in multiple countries, this is because whilst the pizza itself seemingly only has a few ingredients some of its ingredients like the vinegar in the dough or the slices of pepperoni sausage are made from dozens of ingredients and it all adds up to a difficult problem to manage.

Consumer fears over product quality and source are driving the change for greater transparency in labelling and accessible information on a products origin. This is all for good reason, food recalls are a common occurrence in the US alone a product is recalled once every three days and much of the recall information is often still on paper. Hundreds of paper records filed/collated and stored just in case product should be recalled. Even manufacturers who boast electronic traceability often don’t have a joined up system and have just re-entered paper documents into a computer system. This introduces the risk of:

  • Lost records creating gaps in the traceability record chain
  • Incorrectly filled in sheets or badly written records?
  • The mis-reading of labels and quality data?
  • The mistyping into the computer system

Traceability is still therefore one of the biggest reasons for implementation of software solutions into the food and beverage industry and it’s easy to see why. The costs and fines imposed by the retailers can be disastrous for a manufacturer who cannot provide traceability information in a timely manner.

Start your project

IFS for transparency

The European Food Safety Authority (EFSA) and the U.S. Food & Drug Administration (FDA) are two of the major influencers on global legislation for food safety. In most countries, product recalls of some type occur every week. Quality failures, contamination and major recalls or a poor response to a recall can do great damage to a brand’s reputation. IFS solutions include standard end to end ingredient and product tracking for all inventory, traceability starts when the goods arrive and are tracked through production to finished goods and the distribution chain.  Recall information is available at the press of a button ensuring risk from recalls are mitigated.

Start your project

Consumer Demand #2: Sustainability

No longer a platitude

Sustainability is considered the management of environmental, social and governance issues. Unfortunately, the food and beverage industry has not been the most sustainable with high levels of waste and energy used to produce, package, process and store food to meet customer requirements. However, that is all changing, 53% of CEOs now say involvement in sustainability is increasing and what’s more 81% believe their company’s reputation for sustainability is as important to the consumer as its products.

Proven sustainability is also fast becoming a barrier to selling to many of the major retailers with companies like Walmart creating a sustainability index for the life of its products, whilst others are demanding suppliers enter into approved and auditable schemes like the Round Table for Sustainable Palm Oil (RSPO). Suppliers ignoring this requirement are likely to see their products excluded from the supermarket shelves as the retailers fight for loyalty using their sustainability credentials.

Importance of sustainability to consumers

There’s no question that consumers have concerns over environmental sustainability, the Millennials and Z Generation leading the way. The connected, amplified voice of social media has shifted the sustainability conversation from a technical to a humanizing conversation. This makes it very difficult for companies to ignore their own responsibilities to the environment and more important brand reputation and loyalty.

Demonstrating and proving sustainability isn’t just to placate the consumer, the effect on growth and the bottom line are significant as the following example shows.

The chocolate market grew 3% last year.  However, chocolate with environmental claims, such as made with renewable energy, grew by 22%. Similarly, chocolates produced without artificial ingredients grew by 16% and chocolate with claims of fair trade rang in at 10%.

Start your project

IFS for sustainability

Sustainability is not just about saying you are sustainable its now about proving it. With IFS solutions sustainability management module and the ability to mass balance ingredients and ingredient attributes through reporting and traceability it is simple to both prove and manage your sustainable credentials.

IFS Sustainability Management™ gives comprehensive support for all stages of a product’s lifecycle, through the entire supply chain to the use phase and end of life. It leverages existing data, enables the creation of material declarations and environmental product declarations, and serves as a base for environmental reporting such as GRI.

Start your project

No longer a platitude

Sustainability is considered the management of environmental, social and governance issues. Unfortunately, the food and beverage industry has not been the most sustainable with high levels of waste and energy used to produce, package, process and store food to meet customer requirements. However, that is all changing, 53% of CEOs now say involvement in sustainability is increasing and what’s more 81% believe their company’s reputation for sustainability is as important to the consumer as its products.

Proven sustainability is also fast becoming a barrier to selling to many of the major retailers with companies like Walmart creating a sustainability index for the life of its products, whilst others are demanding suppliers enter into approved and auditable schemes like the Round Table for Sustainable Palm Oil (RSPO). Suppliers ignoring this requirement are likely to see their products excluded from the supermarket shelves as the retailers fight for loyalty using their sustainability credentials.

Importance of sustainability to consumers

There’s no question that consumers have concerns over environmental sustainability, the Millennials and Z Generation leading the way. The connected, amplified voice of social media has shifted the sustainability conversation from a technical to a humanizing conversation. This makes it very difficult for companies to ignore their own responsibilities to the environment and more important brand reputation and loyalty.

Demonstrating and proving sustainability isn’t just to placate the consumer, the effect on growth and the bottom line are significant as the following example shows.

The chocolate market grew 3% last year.  However, chocolate with environmental claims, such as made with renewable energy, grew by 22%. Similarly, chocolates produced without artificial ingredients grew by 16% and chocolate with claims of fair trade rang in at 10%.

Start your project

IFS for sustainability

Sustainability is not just about saying you are sustainable its now about proving it. With IFS solutions sustainability management module and the ability to mass balance ingredients and ingredient attributes through reporting and traceability it is simple to both prove and manage your sustainable credentials.

IFS Sustainability Management™ gives comprehensive support for all stages of a product’s lifecycle, through the entire supply chain to the use phase and end of life. It leverages existing data, enables the creation of material declarations and environmental product declarations, and serves as a base for environmental reporting such as GRI.

Start your project

Consumer Demand #3: Authenticity

Near Field Communication (NFC)

Imagine you’re standing at your local store contemplating a bottle of Château Le Pin for a special celebration. But it seems unusually cheap. Ping. A pop-up on your phone shows you the exact vineyard where the grapes were grown. There’s even the story of how Château Le Pin got its name from a solitary pine tree that grows near the Winery. An interesting fact to share at your dinner party!

Near Field Communication (NFC) chips embedded in a range of products transfer information wirelessly and gain actionable metrics, such as the analysis of consumer buying habits obtained through shared data. Now more than ever, consumers demand authenticity and the market for ‘smart labelling’ is ever-growing, which presents opportunities for Manufacturers.

Global market for smart labels:

  • 2017 valued approx. USD 5.22 billion
  • 2018-2024 growth of 17.6% CAGR predicted
  • 2024 predicted revenue end of 2024: USD 16.29 billion*
    *Zion Market Research

NFC beats fake alcohol

In addition to obvious potential for upsales, future promotions, community and brand building, it also means instant access to recall information and improved traceability, fundamentally improving supply-chain integrity.

So, why Château Le Pin? Counterfeit alcohol is nothing new. In fact France’s first Appellation Contrôlée wine rules were introduced in 1923 specifically to protect Château Le Pin from fraud, which could be why a French Bordeaux winery was one of the first to use NFC tags. But today’s statistics on alcohol fraud make for sobering reading.

  • 12% of all alcoholic drinks sold globally are said to be counterfeit
  • Total value of counterfeit alcohol production worldwide: USD 1 billion
  • By 2026, at least 5.5 billion wine & spirit closures will be NFC-enabled to protect the market from counterfeits.*
    *Market-research firm Vandagraf International

Whilst NFC will initially be driven by food and beverage brands to authenticate products effectively, smart-labelling and e-labelling are becoming more cost-effective with capabilities broadening as more industries adopt this technology.

Start your project

IFS for authenticity

Authenticity is about proving the provenance of your products and demonstrating the integrity of the supporting data. Technology exists to give customers access to this information through QR codes or near field communication (NCR) and IFS provides the repository for the detail. Evidence of purchase, quality testing manufacture and storage along with electronic copies of certificates are held within the application and can be easily retrieved to prove authenticity. IFS Applications is an open solution and capable of providing this data electronically to websites where it can be exposed to the consumer.

Start your project

Near Field Communication (NFC)

Imagine you’re standing at your local store contemplating a bottle of Château Le Pin for a special celebration. But it seems unusually cheap. Ping. A pop-up on your phone shows you the exact vineyard where the grapes were grown. There’s even the story of how Château Le Pin got its name from a solitary pine tree that grows near the Winery. An interesting fact to share at your dinner party!

Near Field Communication (NFC) chips embedded in a range of products transfer information wirelessly and gain actionable metrics, such as the analysis of consumer buying habits obtained through shared data. Now more than ever, consumers demand authenticity and the market for ‘smart labelling’ is ever-growing, which presents opportunities for Manufacturers.

Global market for smart labels:

  • 2017 valued approx. USD 5.22 billion
  • 2018-2024 growth of 17.6% CAGR predicted
  • 2024 predicted revenue end of 2024: USD 16.29 billion*
    *Zion Market Research

NFC beats fake alcohol

In addition to obvious potential for upsales, future promotions, community and brand building, it also means instant access to recall information and improved traceability, fundamentally improving supply-chain integrity.

So, why Château Le Pin? Counterfeit alcohol is nothing new. In fact France’s first Appellation Contrôlée wine rules were introduced in 1923 specifically to protect Château Le Pin from fraud, which could be why a French Bordeaux winery was one of the first to use NFC tags. But today’s statistics on alcohol fraud make for sobering reading.

  • 12% of all alcoholic drinks sold globally are said to be counterfeit
  • Total value of counterfeit alcohol production worldwide: USD 1 billion
  • By 2026, at least 5.5 billion wine & spirit closures will be NFC-enabled to protect the market from counterfeits.*
    *Market-research firm Vandagraf International

Whilst NFC will initially be driven by food and beverage brands to authenticate products effectively, smart-labelling and e-labelling are becoming more cost-effective with capabilities broadening as more industries adopt this technology.

Start your project

IFS for authenticity

Authenticity is about proving the provenance of your products and demonstrating the integrity of the supporting data. Technology exists to give customers access to this information through QR codes or near field communication (NCR) and IFS provides the repository for the detail. Evidence of purchase, quality testing manufacture and storage along with electronic copies of certificates are held within the application and can be easily retrieved to prove authenticity. IFS Applications is an open solution and capable of providing this data electronically to websites where it can be exposed to the consumer.

Start your project

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