The food industry’s supply chain continues to develop complexity and, as a result, many companies are finding it difficult to document their end-to-end supply chains. Safety breakdowns at certain points in the food supply chain, including contaminated foods, adulterated ingredients and the presence of unlabeled allergens, can have serious, potentially life-threatening outcomes.
The global scale of food fraud is estimated to be around $50 billion a year. In the tragic Ugandan case, government officials were arrested over fraudulent activities related to procurement of maize flour and beans for COVID food relief. This should act as a stark warning to many in the agriculture and food industry, that with changing demands for how food is produced, coupled with our rapidly changing climate, new food safety risks will undoubtedly emerge.
From Farm to Fork, it is essential to understand the supply chain in order to meet customers’ demands to identify and mitigate any known risks and provide a traceable supply chain, having customer safety is a primary focus.
Eight risks in the supply chain
1. Fierce competition on supply costs
Due to continual downward pressure on supply costs, food businesses are often forced to source from further afield, often opting to source globally. As a result, the chance of risk events arising deeper in the supply chain increases, putting pressure on manufacturers to reconsider their controls.
2. Need for strong legislation
Steps have already been made in legislation to allow for earlier prevention of food safety incidents occurring, such as FSMA. While it is important that lawmakers are proactive in their response, the focus has primarily been on food safety, and there is still a difficulty in treating food fraud as its own separate entity.
3. Most companies manage their suppliers through contractual arrangements, rather than more formal monitoring
A dependence on contractual deals places the responsibility on suppliers to manage their own supply chain. As a result, any risks or liabilities lie with the supplier; however, this does not eliminate the risk to the ultimate food manufacturer.
4. Many companies source raw materials through brokers and agents, resulting in loss of supplier relationships
One of the biggest challenges preventing full traceability of our food is the fragmented nature of the supply chain. Tradelink has our boots on the ground and we invest the time and money to provide ethical knowledge of a product’s source of origin.
5. Ever-changing consumer demands placing pressure on continuity and traceable supply
Traceability is no longer a request from consumers, but a demand, and one that is only growing stronger. Consumers are no longer just looking for a source of ‘fuel’ in the food they eat. They are much better informed about the impact of diet, with food choices often guided by specific dietary requirements or the latest food trend. Given the need to cater to more diverse consumer preferences, there is added pressure on businesses to provide more information to consumers such as ingredient origin, nutritional information and allergens. Brand protection, demand forecasting and consumer loyalty all becomes possible for early adapters who show themselves to be taking practical steps to guarantee the authenticity of their products.
6. Food brands have inadequate resources for mitigating risks
To mitigate risks, food businesses need to make supplier diversity management a primary focus. This increases focus on building holistic supplier relationships of trust and transparency.
7. The growth of private labels
There is an obvious financial motivation for retailers to sell private label products, as this allows them to maintain an identity in a price-competitive market. However, most retailers do not have manufacturing infrastructure and rely on suppliers to assess, interpret, and manage risk. Again, this ties a food retailer’s brand equity to its suppliers, emphasizing the need to manage downstream risk.
8. Influence of organized crime
High-scale food fraud is not a naturally occurring phenomenon but rather exists because of highly organized criminal activity. It’s been mentioned that food fraud becomes food crime when it no longer involves random acts by “rogues” within the food industry, but becomes an organized activity by groups that knowingly set out to deceive and or injure, those purchasing food.
To combat the growing threat organized crime has on our food supply, it is vital that governments devote resources to organizations with the sole responsibility of identifying food crime.
Conclusion
The growth of the global food supply chain may bring with its complexity and challenges, but also great opportunities. If actors can interject their
processes with the kind of joined up thinking outlined above, with the help of technological tools that are becoming more and more accessible, the benefits will be significant, not just for them, but for all of us.
Our Promise to You
We understand and manage the innovative and disruptive solutions that help identify and manage food safety supply chain risk. Our team work on an enterprise level and are dedicated to detecting potential risks which could lead to food safety and quality failures, resulting in damage to a company’s brand reputation. We also understand the implications of cost reduction initiatives on food safety and balance the risk/reward equation. All our products pass through our risk-ranking methodology to detect potential food safety issues.
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