8 Food Traceability Predictions for 2020
Food traceability is listed amongst the top trends of all food industry related prediction for 2020. Let's see what trends we expect within this sector.
At the start of 2020, TE-FOOD’s industry professionals collected their thoughts to predict what new trends this year will bring for food traceability.
1. Supply chain visibility remains one of the top industry trends
Just like last year, supply chain traceability will be amongst the top food industry trends in 2020. This doesn’t mean that every food company will hurry to implement traceability, this period is still for early birds. But the demand for radical transparency is growing.
Consumers — especially the Millenials and younger — are acknowledging sustainability and ethical production, but at the same time, don’t trust brands. End-to-end traceability information can provide trusted proofs about the processes of their favourite brands.
2. Marketing is still the primary motivation for implementations, but other benefits are emerging
Until now, the main purpose for food companies to implement traceability is to differentiate their brands from their competitors, or to justify the higher price of a premium product.
As consumers prefer brands which provide more information on the production process, the marketing motivated traceability implementations are getting more popular.
However, a growing number of companies want to employ traceability to achieve other goals like improved operational efficiency, reduced food waste, quicker and targeted product recalls, or unified certification management.
3. Traceability customer segments will diversify
While most customers in the early bird period require highly customized solutions, we expect that segmentation will start in 2020.
Large enterprises will continue to demand traceability solutions deeply embedded into their internal processes and environments. Meanwhile small and medium sized enterprises will require solutions, which can be implemented quickly and with affordable cost levels.
In the medium term, SaaS solutions will appear in the traceability industry, providing easy parameterization and integration to IoT and backend systems, while providing it for monthly fees based on volume or features.
But solutions will have to consider sector specific characteristics. End-to-end traceability isn’t a one man show. It’s a collaboration of complete supply chains for a common goal. As upstream suppliers (e.g. farms, food producers) are often selling to the same customers (e.g. distributors, retail chains), and downstream companies are often sourcing from the same suppliers, it’s reasonable for them to form a consortium to implement one system for several parties, sharing the cost and governance duties.
One of the top challenges of traceability is upstream supply chain onboarding. If several customers of a farm require traceability information, there is a bigger chance they can successfully onboard it, making industry consortiums more valuable.
4. The need for transparency and traceability will become the usual narrative in case of foodborne disease outbreaks
The multistate outbreak of E. coli infections in the united States was one of the most covered food safety news in 2018. It focused the public interest to the necessity of traceability.
Since that outbreak, whenever a foodborne disease appears, the narrative of traceability as a potential tool to mitigate the devastating effects appears in the media. We expect this trend to continue, and act as an important motivator for companies to explore the possibilities of traceability.
5. Serialization regulations won’t stop at tobacco products and medicines
As product serialization (identifying each item with unique serial) is an efficient way to mitigate black market products, it is mandatory to use it for cigarettes and medicines in many countries.
But regulation won’t stop there. We expect that alcoholic beverages, PET bottles, products with protected designation of origin, or traditional specialties will be sooner or later required to be serialized. It helps avoiding tax evasion (e.g. alcoholic beverages), monitoring recycling, or defending local or national brands.
But transparency can not be achieved by serialisation unless there is a global data synchronisation network, allowing users and enforcers to check the integrity of the data, the origin of the product, and ensuring data is up to date.
6. IoT in supply chain still remains a promise of the future
Feeding a traceability (or any) system with manually entered data means a single point of failure, this is why combining IoT tools with traceability systems to provide less error-prone data is a marriage made in Heaven.
IoT tools require hardware to capture data (e.g. temperature, quantity, location, weight, video, etc.) and to communicate the data they measured. And hardware always has high implementation and maintenance/support cost, which makes it slow to roll out, especially in a lower margin industry like food.
IoT will definitely have a significant role to replace manual data capture in the future, but it might take even a decade to become popular.
7. As companies learn more about blockchains, they start to differentiate between centralized and decentralized ledgers
For many companies, especially beyond the technology sector, all blockchains seems to be the same. In such environment, leading food companies like WalMart, Carrefour or Nestlé can be convinced to implement private ledger solutions like IBM Food Trust. In reality, centralized blockchains — where all nodes are provided by the solution provider — are no more credible than a centralized database.
As IT departments of food companies are curious to learn more about blockchain technology, we expect that they will realize that centralized blockchains can’t be used to gain back the trust of consumers.
8. Limited edition products in the food industry will start to employ blockchain
Recently, Nike recognized the opportunity to tokenize limited edition shoes on blockchain. A digital representation of the serialized physical product helps to fight off counterfeiting, creates a new channel for personalized marketing and direct consumer engagement, and supports loyalty of consumers.
These advantages are desirable for specialty food products as well. A limited edition fine wine, whiskey, chocolate, or coffee can be replicated digitally on blockchain, providing a channel for special treatment.
We expect this trend to strengthen as it enables brands to build a new level of consumer engagement and brand positioning.
We think the industry will go in these directions, and TE-FOOD formed its strategy along these expectations for 2020.
TE-FOOD is the world’s largest publicly accessible, farm-to-table food traceability solution. Started in 2016, it serves 6000+ business customers, and handles 400,000 business transactions each day.