Transparency in Food Industry: 3 Reasons Why It Matters

Nicole Georgiev
Table of Contents
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    It’s important to know your food and where it comes from. Today, more people than ever are interested in mindful consumption to pair with seasonality. This is where transparency trends in the food distribution industry and food supply chain come into play. 

    Consumers expect food transparency. This is due to their desire to live a healthier lifestyle, so they opt for healthier food alternatives. When it comes to food, sustainability and health credentials are important. Consumers are increasingly interested in purchasing items labeled as healthy, plant based, organic, gluten-free, vegan, 100% natural, and homemade. 

    Technology makes it easy for consumers to learn about the food they consume. Restaurant technology and some restaurant technology trends have made it simple for diners to understand how the food is made. 

    Genetically modified organisms (GMOs) are increasingly common within the food chain. This is causing consumers to carefully read product labels, including wine bottle labels, before making a purchase. Some consumers will pay premium prices for healthier food items. 

    To maintain a competitive advantage in the food and beverage industry, you must be transparent. This is also important or extremely important when you’re opening a business for the first time, such as opening a restaurant or opening a grocery store.

    Download the link to the food supply chain eBook

    What Is Food Distribution Transparency?

    Being transparent in the food distribution industry means allowing your consumers to know how and where the food you sell was made or grown. This should be done clearly, accurately, and usefully through food-related nutritional information such as nutritional facts and a list of ingredients. 

    In the past, the food supply chain management process wasn’t a factor many consumers paid attention to. It was more of an internal, or back of house, consideration. However, things have changed. 

    Within a transparent supply chain, every link and participant has access to the information they need on the origin and status of the products. This information includes how they produce, grow, package, and store food products. It gives consumers and businesses a clear picture of where the ingredients and food originate. 

    3 Reasons Why Transparency Matters in Food Distribution and Supply Chain

    Consumers spend an increasing amount of time inspecting food brands labels. They scan them for allergens, ingredients, claims, and countries of origin. It’s common for them to also look for information regarding how the product was farmed or manufactured. 

    Transparent food distributors make consumers feel they have control over what they purchase. This is also great for food distributors to build trust with their consumers and improve customer satisfaction.

    People buying or selling wholesale also look into a wholesale directory for wholesale products and distributors. This is also common with dropshipping vendors, so they can provide their own customers with transparency regarding the products they sell. 

    Here are three reasons why transparency matters in food distribution and supply chain: 

    1. The Need for Food Chain Traceability

    The COVID-19 pandemic has highlighted several weaknesses in the global supply chain. There was a massive shift in demand at the start of the pandemic, which involved restaurants relying on online sales for profit. At the same time, food producers had to adjust their factory operations to ensure food safety

    As consumer demand for food products has increased, sourcing raw materials inventory has become a huge issue for food producers and overseas transportation has continued to see delays. This has resulted in product shortages. These are some of the common shipping issues that eCommerce shipping companies face with bulk shipping.

    Resilient supply chains have to be transparent. This means that businesses should know where their products are coming from and where they are at all times. When it comes to supplier relationship management, transparency is a huge factor. 

    Transparency in food industry allows people to access quality, timing, and quantity data. It provides information that both suppliers and consumers can benefit from.

    2. Increased Consumer Pressure

    Consumers want transparency. In 2018, Nielsen conducted a survey that revealed that 67% of consumers want information regarding every ingredient included in the food products they buy when grocery shopping. Other studies have shown that consumers are more likely to be loyal to a transparent brand and retailer.

    Since the beginning of the COVID-19 pandemic, people have increased their food spending. The pandemic has caused more people to be concerned about their health and what food items they consume. 

    3. Improving Recall Response 

    Product recall notices aren’t new. In the past, food manufacturers and businesses would issue recall notices, but the source couldn’t always be identified. Nowadays, there are regulations in place that require transparent production and distribution processes. This makes it easier to locate the source of any food safety issue. 

    When it comes to communicating sustainability and health, distributors have a lot to consider. They need to protect consumers' safety and health by identifying, isolating, and recalling specific batches or lots. They also protect their brand’s reputation, reduce food waste, and abide by industry regulations. 

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    How to Be More Transparent In Food Supply Chain

    Companies that share their values with consumers have grown in popularity. They’ve also realized that having increased food supply chain transparency with their consumers is a powerful business value. It pleases customers and strengthens efficient operations.

    A company can be transparent in the food supply chain in the following ways:

    Having Sustainable Suppliers

    A company is only as good as its suppliers. A transparent food supply chain requires you to share information about your suppliers with your consumers. That said, it’s best to ensure that your suppliers share the same commitment to transparency. 

    You can improve supplier relationship management tactics. You’ll understand better how they source and deliver their products.

    During this process, you’ll have an opportunity to evaluate your suppliers and if any issues need to be addressed or corrected. Your suppliers' information should be valuable and accurate enough to pass along to your consumers. 

    Improving Traceability of Source Materials and Ingredients

    You should be able to work alongside your suppliers to trace each material and ingredient used for your products. This includes the working conditions of those that harvest the materials, where and how they were harvested, and their environmental impact. 

    Animal welfare is an essential consideration for any business owner in the food industry. It is a good way to ensure that they are being treated humanely. As a business owner within the food industry, you should familiarize yourself with the fields or animals that provide ingredients for your products. These include production facilities for meat products and dairy products.

    The same goes for manufacturing inventory and materials. During this process, you’ll identify if there are hazardous materials and if it’s possible to recycle or reuse them. It’s possible to identify a need for more sustainable alternatives. 

    Establishing Open Lines of Communication

    Shareability is a term that goes hand in hand with transparency. As a company, you should prepare to share information with your partners and the public. Your suppliers should be prepared to answer if questions arise regarding the company’s source ingredients or materials.

    Establishing reliable communication channels will improve your consumer relationships. This communication can be done through digital or eCommerce supplier quality management platforms, eCommerce email marketing, or text messaging. There should be open lines of communication at all times.

    Collecting and Sharing Data Regarding Your Supply Chain

    To have a transparent supply chain, you must monitor your operations actively and collect information regarding goods production. Sharing this company data with the public shouldn’t be tricky. 

    eCommerce software, including warehouse management system software, restaurant inventory software, and demand planning software, makes data collection automatic. These eCommerce automation tools collect company and product information so that it can be quickly passed along to interested parties. 

    The collected data includes information regarding your workforce, how products are made, and how much energy is used during production. Automatic data collection processes save time and get the information across easily. 

    Download the link to the food supply chain eBook

    Frequently Asked Questions About Transparency In Food Industry

    How Do You Make a Supply Chain More Transparent?

    A supply chain can be more transparent by: 

    1. Having sustainable suppliers
    2. Improving ingredient sourcing traceability of source materials and ingredients
    3. Establishing open lines of communication
    4. Collecting and sharing data regarding your supply chain

    How Does Transparency Contribute to an Effective Supply Chain?

    Transparency contributes to an effective supply chain by creating new business opportunities while improving supply chain visibility to monitor and improve supplier practices. This includes social and environmental practices which can create new market opportunities. 

    What Technologies Can Enable Supply Chain Transparency?

    The technologies that enable supply chain transparency include: 

    • Blockchain
    • Cloud computing
    • Artificial intelligence
    • Internet of Things (IoT)
    • Big data analytics
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