Change is the one constant in the global food industry. As food safety regulations constantly evolve, retailers and consumer packaged goods (CPG) manufacturers have an ever-changing set of rules and guidelines to follow. Retailers are accountable for ensuring that the entire supply chain and sourcing methods comply with all these rules – a particularly daunting challenge if they lack full collaboration with their Private Label suppliers. For instance, the new regulatory complexities created by Brexit will have long-lasting effects on how retailers and suppliers collaborate to serve consumers across international markets.
Corporate Responsibility and Sustainability
Today’s consumers demand more information from retail companies. They expect product details like its origin, how it was made, who made it, under what conditions, the natural resources used to produce and distribute it, as well as the impact that the production of the food will have on future generations and resources. European and British consumers lead the way in demanding more from CPG suppliers and retailers. Nearly seven in 10 (68%) UK shoppers say the environmental impact of a product’s packaging affects their purchase decisions, a figure that rises to 77% in Germany and 81% in Spain
Consumers have become far more demanding that the companies from which they buy food, have certain corporate responsibility policies in place and hold their supplier partners to the same standards. Consumers are more informed, empowered and vocal than ever, and they now expect more responsible behaviour from retailers and suppliers.
Food Recalls and Withdrawals
Food recalls are major industry threats because the supply chain for food products is globally entwined, and its integrity affects public health and safety. Food recalls can arise for reasons ranging from product mislabeling to bacteria and undeclared allergens.
The total number of food recalls in the U.S. increased by 10% between 2013 and 2018.
Recalls of meat and poultry rose 66% between 2013 and 2018 and Class I recalls (associated with serious health risks including undeclared allergens) of meat and poultry increased 83% in during that period. In the UK, food recalls jumped 40% in 2018. That year, the top categories for food recalls in the European Union (EU) were nuts, nut products and seeds, followed by fruits and vegetables, and fish and fish products.
- 47% of U.S. food recalls were from undeclared allergens
- 23 million people in Europe fall ill every year from contaminated food and an average of 4,700 cases are fatal
- 300% increase in severe allergic reactions to food between 2007 and 2016.
- 90% of food-related allergic reactions in the U.S. come from milk, eggs, fish, shellfish, tree nuts, peanuts, wheat and soybeans.
Collaboration is Critical
Retail opportunities abound for retailers and suppliers that work together to differentiate their offerings with innovative products. According to the 2018 Retail Collaboration Survey of Trace One, 90 percent of retailers say sourcing new products is an opportunity to gain a competitive edge. This finding aligns with Trace One’s Consumer Confidence in Private Label Report, which found that 72 percent of consumers shop at a specific retailer more than once per month because of its private label products.
Retailers use non-standardized approaches to sharing information about products and their trading partners. Using varying processes across retailers leads to confusion, complexity and inefficiencies across the supplier base, as it takes time and effort to adapt their information to retailers’ diverse needs. To simplify and streamline retail processes, using a tailored Supplier Collaboration Program helps each supplier understand the nuances of each retailer.
Risks of Supplier Disengagement
Disparate tools and systems, constantly changing processes and the lack of a single version of the truth create communication challenges that prevent smooth retailer and supplier collaboration as a unified team. These challenges often result from using multiple points of data entry, functional silos that keep relevant information hidden from stakeholders, low levels of education and adoption of information-sharing best practices – all resulting in incomplete and inaccurate product specifications. As a result, cross-functional and cross-organizational teams face product development inconsistencies, delayed time to market, legislation risks and, eventually, declining consumer trust.
Why the Lack of Engagement?
Managing new suppliers is complex. To sell seize new market opportunities and develop in-demand products, many retailers need to change suppliers; however, they find the change management process daunting.
Trace One’s survey found the following concerns hold retailers back from engaging new suppliers:
- 5% of retailers find it hard to achieve expected benefits and improved product quality
- 35% find it time consuming
- 30% find it difficult to build a trusting relationship
- 5% find it risky to adapt overseas suppliers due to cultural differences and exchange rates
To avoid these pitfalls and limit risk, leading retailers should streamline compliance management processes and assess supplier performance on a regular basis.
Addressing Industry Challenges
By adopting Trace One’s Supplier Collaboration Program, retailers and suppliers will change the way the industry develops new products and meets the need of ever-changing legislation requirements. Trace One’s industry-proven platform enables retailers and suppliers to collaborate throughout the end-to-end product development process; from ideation, through to product launch.
Leveraging these programs, retailers have the ability to mitigate key risk to their consumers and brand reputation through supply chain engagement and connectivity. This unified approach enables true product innovation, competitive differentiation, regulatory compliance and confident consumers who know exactly what they are buying for their families, which boosts brand trust and loyalty.
As a result, the dynamic changes from an arm’s-length vendor-retailer transactional relationship to a loyal, long-term, integrated partnership to fuse their strengths and delight consumers
Discover how Trace One can help you spark innovation with our One Platform
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