John Keogh, principal advisor at Shantalla, speaks with FIA and shares his views on food chain transparency, standards and Blockchain.
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FIA: You have recently completed 2 years of academic research into food chain transparency and consumer trust at Henley Business School, what was your motivation to research transparency and trust?
John: About three years ago I set out to write an ebook on food chain transparency. However, I realized the critical importance of empirical evidence and theory as it’s such a new focus area for business and governments alike. Professionally, I advise the public and private sectors including NGO’s and industry associations and therefore my guidance needs to balance between informing policy on the one hand and being practical for industry to implement on the other.
FIA: What did you discover along the journey that is useful for food companies?
John: To start with, both transparency and trust are multi-dimensional and very complex. The relationship between the two constructs is a nascent area of research with sparse empirical evidence. Essentially, the relationship is bi-directional, but we are still in the empirical discovery mode when it comes to describing how they interact, which comes first, and how to measure both constructs. That said, trust on its own has been extensively studied across many areas resulting in more than 120 definitions of trust across literature.
FIA: is there a clear definition of transparency in the literature relevant for food companies?
John: Yes, in supply chain and operations literature there is a dominant definition from Dutch academic Gert Jan Hofstede (2003) which I think is fabulous and every food company can consider. Hofstede’s definition is “Transparency of a netchain is the extent to which all the netchain’s stakeholders have a shared understanding of, and access to, the product-related information that they request, without loss, noise, delay and distortion”. In this context, Hofstede’s usage of ‘netchain’ is a conflation of ‘networks’ or information technology and ‘chains’ means physical supply chains. The definition is easy to interpret yet sufficient to capture the complexity of food chain transparency in particular. At the heart of this definition is a ‘shared understanding’ and ‘product-related information’ and both are covered by GS1 standards that are well adopted today by food companies. The ‘loss, noise, delay and distortion’ is mostly self-explanatory but points to critical areas of weakness in the food sector today. That is, data quality and data synchronization internally, between business units and externally between trading parties and extending to consumers.
FIA: That sounds complex, so where does a business start?
John: Food companies need to have well trained data analysts and data architects familiar with GS1 standards. GS1 has good guidance documentation and provides advice to its members on how to approach data management broadly and data quality specifically. This is of increasing importance with the growth of ecommerce and regulations are increasingly requiring that online product data must be 100% the same as the information on the physical product labels and packaging for example. One service we are piloting is to help our clients to ‘think-like-a-criminal’. As part of that we suggest to clients to pick 10 of their products and do an online search and they may be quite surprised by the incorrect product data they find. Another is to test the accuracy of their master data with their top five clients. Again this may uncover a lot of surprises.
FIA: What is your opinion on Blockchain?
John: Blockchain is exciting and has the potential to unfold a new era of supply chain transparency and trust. But it’s still early days and use-cases in traceability and recall are in pilot. The academic world is now very active. For example, five years ago there was almost no academic research on blockchain but last year we had more than 350 peer-reviewed publications. This is very important as academic research informs policy, which in turn can make or break blockchain adoption in some areas that are highly regulated. And data quality has to be fixed in a blockchain era. There’s no point in moving to a blockchain level of transparency and trust with poor quality data.
FIA: What have you uncovered on consumer trust in the food sector?
John: There is a growing body of knowledge and industry reports showing that consumer trust is low. This is despite a vast network of national and international laws, regulations and industry standards aimed at protecting consumers. It’s no secret that consumers expect food producers to be socially responsible, ethical in their business and capable of sharing reliable, complete, and truthful product information. And of course, consumers expect their food to be safe, nutritious, and authentic.
FIA: What are the top three evolving areas for food executives to have on their radar?
John: 1. Blockchain, 2. Information transparency, and 3. Forensic methods to authenticate food. For Blockchain, ensure your organization learns about the pro’s and con’s of Blockchain and the impact it may have across your core business functions. Don’t get caught up in the hype - focus on proven use-cases. Don’t rely exclusively on your preferred solution providers for Blockchain information and balance this with peer-reviewed publications from reputable journals.
For information transparency you need to focus on data governance and data quality, 100 per cent data accuracy is the only acceptable outcome here. Regarding authentication, most IT based solutions only track the outer package and box but companies need to get to the forensic level and introduce random testing with mobile tools on the contents. One leading edge DNA test I have seen from a Swiss company can be done within 30 minutes. It takes the science out of the laboratory and into the field.
Companies need to protect their brands and consumers from the growing threat of food fraud. In my opinion, it is now necessary for food companies to have the capability of rapidly testing food integrity across many areas including verifying their product is from a geographically protected area.