Written by Jim Hardeman, CMX's CMO and CPO, this article first appeared in Forbes.com, as part of the Forbes Communications Council.
From the backlog of cargo ships in the ports of Los Angeles and Long Beach to the challenges of reported labor shortages, supply chain issues have, perhaps for the first time in history, become top of mind for the average consumer. But what many people may not realize is that supply chain disruption can also lead to product quality and food safety failures.
The foodservice industry knows this all too well. A well-functioning supply chain is essential for restaurant chains, grocery and convenience stores, and food and beverage manufacturers. As consumers have come to expect more choices, lower prices and year-round availability, supply chains have been pushed to new limits. Add in the complexities brought on by the pandemic and you have a perfect storm of disruption and increased risk.
What’s at stake?
Food recalls represent a big financial and reputational risk to foodservice businesses. And they became more common between 2013 and 2018, according to Public Interest Research Group data reported in Time magazine. Time notes that there has been an 83% increase in Class 1 recalls — the most serious class of FDA recalls — of meat and poultry during this time period. The FDA reported 427 food and cosmetics recall events that included 1,026 products in 2021.
As someone who has been associated with the foodservice industry for over 10 years and currently works for a technology supplier that offers a quality, risk and compliance solution to restaurants, grocery stores and other retail brands, I know the risks of a recall firsthand. They go beyond the potentially catastrophic impact on people (and in some cases, their pets). A poorly handled recall can bring a business crashing down, leading to lost sales, significant legal and operational costs, and a negative impact on brand reputation and consumer trust.
However, we are seeing three digital forces emerge that could help us overcome these critical concerns:
1. Innovation
The FDA is continuing to modernize its approach to food safety. It recently introduced the New Era of Smarter Food Safety Blueprint, which outlines “achievable goals to enhance traceability, improve predictive analytics, respond more rapidly to outbreaks, address new business models, reduce contamination of food, and foster the development of stronger food safety cultures.” The FDA then selected 12 worldwide winners — out of 90 entrants — in the New Era of Smarter Food Safety Low- or No-Cost Tech-Enabled Traceability Challenge, which encourages the development of cost-effective traceability solutions for human and animal food operations. (Full disclosure: My company is partnered with one of the award winners)
In spite of this momentum, the lack of data standards and system interoperability in the food and beverage supply chain ecosystem could hinder a unified, industrywide approach to whole-chain traceability. However, organizations like GS1, along with the FDA Traceability Challenge winners and other new and emerging innovators, represent significant progress toward this goal. GS1 and other organizations have developed standards to identify, capture and share product information globally.
2. Traceability data and industry collaboration
According to the FDA, a goal of its New Era of Smarter Food Safety initiative is to “explore ways to encourage firms to voluntarily adopt tracing technologies.” Through traceability, the industry has the opportunity to bring together manufacturers, processors, distribution centers, wholesalers and other supply chain partners to create a single digital source of truth.
Item-level traceability is a class of traceability several of the FDA winners offer. It can speed up and automate the resolution of product incidents, withdrawals and recalls for foodservice businesses. The purpose of item-level traceability is to support quality control efforts through the systematic review of origin, destination and freshness at each stage of the supply chain.
Beyond traceability, achieving a transparent, end-to-end view of every sourced ingredient requires the supply chain ecosystem to invest in, further develop and adopt new technologies. RFID is very promising for tagging and tracking food items but still may not be completely practical for endpoints like restaurants. The ability to scan items using QR codes and barcodes on everyday handheld devices like mobile phones and tablets is a viable option that could allow small businesses to adhere to traceability requirements. I expect that regulation will also encourage the widespread adoption of standards and ultimately motivate companies to coordinate and cooperate.
Sustainability could be another source of motivation for foodservice companies, as it is fast becoming a key factor in consumers’ food and beverage buying decisions, as research from C.O.nxt (via Retail & Hospitality Hub) illustrates. Traceability and the increased use of digital tools could enable greater sustainability while also helping to ensure that companies pay the very best attention to food safety and quality. This, in turn, could drive brand trust for food and beverage retailers.
3. Data and automation
With food recalls, quick action and effective communication are everything. Traceability data can enable recall teams to immediately identify where products or ingredients are physically located and gain greater accuracy in understanding the scope and scale of the recall effort required. Companies can then engage automation to accelerate both internal and external communications and use it to collect responses, escalate non-responses and measure the effectiveness of a recall. NexTec and Treivr are two companies that offer differing approaches in this area.
For an example of a modern, efficient and somewhat unique recall-management operation, we can look to Costco. When product recalls occur, it leverages its members-only business model to identify those consumers who purchased the product. A Food Processing article reported in 2018 that the company could call 3.8 million of its members in an hour.
From my perspective, a new era of digital transformation in food safety is unfolding right before our eyes. The way I see it, with the increased globalization and complexity of food, it is critical for food companies and the technology solution providers they partner with to apply preventative controls and implement requirements around finished product standards, ingredient sourcing and suppliers.
Further, it is incumbent upon the foodservice industry to continue to invest in risk-based approaches to product testing, including facility audits and frequent on-site inspections and product evaluations, to reduce instances of contaminated food products from entering the supply chain to begin with.
