Sourcing Transparently: A Key Ingredient for Brand Loyalty and Trust

With foodborne diseases taking center stage in the news and the Food Safety Modernization Act now in full swing, grocers, restaurants and food service establishments have to be more proactive in ensuring food safety than ever before. Simply stated, the highest level of food integrity is a requirement in today’s environment. In order to keep customer loyalty and trust, grocers, retailers and their supply chain partners will have to provide their customers with clearer insight into how their products are manufactured, sourced, and brought to market moving forward.

The Center for Food Integrity’s 2015 Consumer Trust Research report indicates food manufacturers are expected to lead this charge. In a marketplace where consumers are demanding transparency not only from grocery stores and restaurants, but also the food companies manufacturing their products, the best way to retain customer loyalty and trust is to build a transparent supply chain. To gain this type of visibility into the supply base, there are a few best practices to keep in mind.

Getting back to the basics: ensuring transparency with strong supplier relationships

Developing strong, collaborative partnerships with the supply base helps companies implement transparent sourcing practices. Suppliers are more likely to comply with a buyer’s transparency requirements when there is openness, trust, and a commitment from both parties. Suppliers should be inclined to work with customers to help them meet their goals.

Requiring clear insight into the supply base is also critical. Knowing where suppliers’ – including those in the second and third tier -- manufacturing plants are located, what their production processes look like, and which safety and compliance policies they have in place will help buyers properly assess risk and transparency initiatives from the start of the relationship and avoid problems. Transparency expectations and guidelines should also be clearly stated in the contract to avoid miscommunication and misconceptions around what constitutes transparent and ethical sourcing.

Monitor and measure for real success

It’s easy to rely on the same suppliers without evaluating their performance, but this can be dangerous and inhibit progress toward transparency. When suppliers know they are being monitored, they will be more motivated to identify and correct problems in order to keep their buyer’s business. To guarantee transparency and open communication with suppliers, conduct frequent audits and establish a regular reporting process. By interacting with suppliers in the field and on a regular basis, sourcing teams can identify exposure to risks, track progress toward goals, and work together in real time to mitigate problems before they turn into a disruption.

Finding alternate sources of supply

There may come a time when a supplier violates the terms of a contract. Food recalls and failure to comply with product specifications may all be cause for termination. It’s always a good practice for buyers to have alternate sources of supply immediately accessible in order to minimize disruptions that stem from these circumstances. Understanding what other supply options are out there and available will help buying teams quickly pull the trigger on a new order whenever they need it and avoid a last-minute scramble for supply that leaves them vulnerable to undesirable terms.

What’s ahead in food transparency

While supply chain visibility was once considered nice-to-have, it is now the foundation for customer loyalty and trust. With consumers and the media taking a heightened interest in how companies are producing, manufacturing and processing the food they consume, not having extensive visibility into the supply base could put a company’s brand reputation at risk. The hype around “clean labels” and “food with transparency” has skyrocketed over the past year, and this sensitivity to food adulteration will not slow down any time soon with more and more customers demanding concrete information about their food. To successfully navigate this pressure, grocers and food retailers need to have a rock solid sourcing strategy so they can clearly communicate and prove the integrity of their ingredients to consumers.