Your customers want to know where their food and drinks have been, not just where they’re going. It’s time for more authentic traceability in the F&B industry.
Formaldehyde and borax were once commonly used in meat preparation. That’s now forbidden. In short, here’s what happened. In 1904, a writer researching a new book went undercover for nine months in a Chicago meatpacking plant. In early 1906, an influential politician read the book. In June 1906, the U.S. Congress passed the Pure Food and Drug Act and the Federal Meat Inspection Act. These laws ultimately led to the creation of the Food and Drug Administration and the United States Department of Agriculture’s Food Safety Inspection Service. (One of the first major court battles involving the Pure Food and Drug Act was an attempt to outlaw a popular beverage due to its high caffeine content.)
The writer and book: Upton Sinclair, The Jungle
The politician: Theodore Roosevelt, President of the United States
The beverage: Coca-Cola®
As you can see from the recount above, the food and beverage (F&B) industry is no stranger to scrutiny. Health concerns drove sweeping industry regulation in the United States more than a century ago. As a practical matter, this put pressure on the entire F&B supply chain to increase transparency of sources and production methods. To comply with new laws, companies implemented “track and trace” systems, often paper-based, to document material and labor inputs.
Conceptually, traceability is often separated into two components: tracking and tracing. In simple terms, tracing looks backward to a product’s origins and the journey it’s taken while tracking looks forward to its next destination.
These systems have (thankfully) matured since Sinclair’s book shocked Teddy Roosevelt. Food safety has become an unspoken expectation. We largely take it for granted when we’re told to throw out a bag of lettuce from a specific lot number because of E. coli concerns. This is indeed great progress, but the role of traceability in the food and beverage industry is poised to expand. That’s because the issue of F&B sustainability keeps making headlines.
Why is F&B in the firing line? Because of massive raw materials consumption and huge waste. Moreover, stakeholders care now more than ever. Consider these facts:
- Food production accounts for 26% of global CO2 emissions and 66% of global H2O consumption.
- Food waste amounts to 1.3B tons annually (30% of total production).
- One garbage truck load of plastic waste enters the world’s oceans every minute.
- On average, a piece of plastic food packaging is used for 12 minutes, but takes 450 years to decompose.
Responsibility and Compliance
Many companies have realized that comprehensive traceability in the F&B industry plays a key role in satisfying the growing number of environmental, social, and corporate governance (ESG) investors — those whose investment strategies favor companies that focus on these three pillars of corporate social responsibility — and engaged consumers, including The Passionates, a fiercely loyal cohort of Millennials and Gen Zs who care about sustainability and refuse to be “greenwashed.”
Adding to the pressure applied by investors and consumers, governments have shown a new appetite for so-called “guilty until proven innocent” compliance regimes implemented using customs and border patrol infrastructure. The early focus was on apparel, but expect these types of regulations to spill into F&B and other industries. On January 13, 2021 the United States Customs and Border Protection expanded the blanket Withhold Release Order (WRO) initially issued on December 2, 2020 and will detain all shipments containing cotton and cotton products originating from the Xinjiang Uyghur Autonomous Region (XUAR); this now includes tomato products. And on December 23, 2021, President Biden signed into law the Uyghur Forced Labor Prevention Act, which prohibits the importation of all products with material or labor associated with the XUAR.
You can see that those pushing for a sustainable food and beverage supply chain are now asking a different question of, and placing new demands on, traceability systems. The answers to, “Where is it going?” and, “Where has it been?” must serve a higher purpose, that of total supply chain transparency. Ultimately, the recipe for achieving sustainability and traceability in the F&B industry will include innovations across the board: in food bank productivity, recycling, technology, sustainable packaging, and public and private sector collaboration.
Creating a Digital Thread
In the near term, those in the food and beverage supply chain – regardless of size and including growers, processors, distributors and retailers – should consider technology that can demonstrate compliance across every link in their complex, global networks, sometimes referred to as a ‘digital thread’.
A digital thread compiles and organizes a chronological and verifiable account of every tier of the supply chain back to the original source. Transactions are validated at every tier using POs, invoices and packing lists. All these documents are rolled up to a certificate of compliance with complete chain of custody.
Traceability is just one technology that will play a key role in the establishment of a sustainable F&B supply chain at scale. In this space and elsewhere, you’ll be reading more about real-world F&B uses for blockchain solutions, including data verification, multi-organizational collaboration, achieving compliance and enhancing planning. The availability of blockchains designed for the F&B industry is projected to grow exponentially over the next five years.
If blockchain sounds like science fiction, just wait. Prepare yourself for circular business models, milk jugs with sensors and edible boxes and bags. Picture buying a burger, but instead of throwing away the box, you feed it to your dog.