Transparency is critical for businesses that want to capture the attention of — and build relationships with — contemporary consumers, and this is particularly important for businesses in the food and beverage (F&B) industry. People want to know where their food comes from, whether they're sitting in a restaurant or filling up their cart at the grocery store.
Consumers want to feel confident that people have not been mistreated or underpaid to produce their food. They want to know that businesses have been using fair labor practices, handling food safely, and causing as little harm as possible to the environment.
F&B companies with transparent supply chains answer these questions for consumers. They reassure their customers that they can trust the origin of the food they are consuming. Beyond fostering relationships with customers, transparency in the supply chain also enhances sustainability.
Sustainability means making decisions that do not carry negative consequences for current or future generations. F&B companies that are committed to sustainability must consider the short- and long-term environmental, social, and economic consequences of every link in their supply chain, and transparency helps to enhance sustainability in each of these areas.
Why food & beverage businesses must become more transparent
Businesses across all industries are feeling the consumer demand for sustainability, but the demand is particularly pronounced in the F&B industry. This indispensable industry is responsible for over a quarter of all CO2 emissions in the world and two-thirds of global water consumption. Change cannot happen if F&B companies don't get involved and take the lead.
Consumers are aware of this fact, and their growing concerns over climate change and access to safe drinking water cause them to be particularly critical about the environmental impact of their food choices. More than half of all consumers say that it's important for the products they buy to be produced in an environmentally sustainable way. They are often more likely to patronize businesses that are transparent about their sustainability efforts.
What is transparency?
Transparency doesn't necessarily mean that a company needs to prove it's the most eco-friendly company in the world. Rather, it means being honest with customers and providing them with the information they need to make confident buying decisions.
Transparency is more than just a tenant of a business's corporate social responsibility (CSR) plan. It is a human quality. It builds trust. Consumers want to trust the companies they patronize, just as they want transparency and trust in their personal relationships.
Increased demand for transparency
Approximately 86% of Americans say that transparency is "more important than ever before," but they don't expect businesses to be perfect. They just want honesty. They want the reassurance that, if something goes wrong, the company won't sweep it under the rug or lie about what happened.
Nearly 90% of Americans say they would forgive a business's transgressions as long as it was honest about its mistakes. Transparency supports the economic sustainability of the company itself, in this regard.
Transparency leads to accountability
Transparency in the F&B supply chain increases accountability. Businesses take a close look at their own practices when they commit to letting their customers know what's happening at every point in a product's life cycle.
Transparent businesses cannot ignore their own unethical or harmful practices. They become more accountable for their actions, which ultimately helps to drive changes and improve results.
The journey to transparency can’t help but take a business through some soul-searching. They must perform a life cycle assessment to fully understand the impact of their products on the environment, but this information doesn't just help consumers make informed buying choices. Businesses can leverage this information to find ways to improve processes in accordance with environmental and social protections.
5 places to build transparency into your supply chain
Transparency must be built into multiple aspects of the F&B supply chain. More and more customers want to know where their food came from, who was involved in its production, and how the workers were treated. They also want reassurance that the food is safe and nutritious, and they want to understand the ecological impact of their dining choices.
F&B transparency should include a clear view into these five elements:
- Sourcing: Consumers want to ensure that producers from underdeveloped countries are being fairly compensated. They think about labor and human rights when making purchasing decisions.
- Food waste: Between 30% and 40% of the food supply is wasted every year. Being transparent about efforts to reduce waste in relation to both food and packaging helps assuage consumer concerns about waste.
- Safety tracing: Traceability allows businesses to track the sources of potential deadly outbreaks, so they can protect their customers by detecting and responding to food safety issues as quickly as possible.
- Nutritional information: An increased interest in healthy eating in response to increased obesity rates and health concerns means that consumers want to know what they are consuming. They often want more than the government-required nutritional information; they want true nutritional values on their food.
- Ecological impact: The F&B supply chain consumes a lot of energy in the process of growing, transporting, storing, and selling food. On average, it takes about 10 calories of energy to bring one calorie of food to consumers. Consumers want to understand the ecological impact of the food they are consuming. They want to know where the producer has taken steps to reduce energy consumption.
Consumers make food and beverage decisions based on environmental sustainability, and in turn, transparency in the supply chain enhances sustainability both for the industry at large and the company itself.
A fifth of the Amazonian rainforest has been cut down in the last two decades to make space for cattle ranching. Beverage production consumes billions of gallons of fresh potable water every year. Many food production systems are unsustainable because they deplete resources and cause damage to the environment.
F&B businesses must increase transparency — and the sustainability it’s meant to reveal — if they want to stay relevant to eco-, health-, and labor-conscious consumers. At the same time, transparency also protects their businesses. It will guide them to more effective decision-making and help make production processes more viable for the long term.
In the end, F&B supply chain transparency is a powerful way to safeguard your brand and your company’s long-term success.
