First it was the pink goop. Then the horse meat. Now azodicarbonamide. Thanks to the growing savviness of consumers, and non-stop media attention around the ingredients and processes used by food and consumer goods companies in manufacturing, companies are facing increased pressure to explain where their products originated, how they were made and what ingredients are inside. If news hits, for example, that a company is sourcing lettuce from unsound farms with unhealthy sanitary practices, it causes a deterrence away from that company.
Dirty lettuce = no sales = no profit = unhappy shareholders = bad for business.
School lunch mystery meat a thing of the past
Until recently, companies disclosed ingredients around their products but most consumers never paid much attention. With increased education around food safety and more awareness around manufacturing practices, however, the pendulum has swung. Consumers are faced with greater decisions about where to buy products and with more information at their fingertips, these choices are becoming more complex. Companies are now on the hook to provide as much information as possible about their products in order to retain market share.
What is meant by ‘supply chain transparency’?
Supply chain transparency is when companies provide information to end consumers around the social, humanitarian, environmental and health conditions throughout the chain of custody of each product. From farm or factory to table, products take multiple trips for processing, packaging, consolidating, testing and improving. Companies responsible for getting their product to your home may not directly participate in unsound practices, but because they purchase from an entity that either grows, processes, packages or ships the end product, ultimately they are to blame. This burden of proof is encouraging companies to capture more information on the practices, both good and bad, across their supply chain(s).
In Oxfam’s latest Behind the Brands campaign, top food companies were ranked according to how they disclose information about their supply chain, partners and practices. Additionally, Oxfam examined how companies enforce certain requirements on their suppliers regardless of the sophistication or complexity of their supply chain. Companies like Nestlé, Unilever and Coca-Cola scored higher for providing public information about their supply chain partners and their various practices (i.e. labor conditions, wages, prevalence of disease, availability of education, gender rights, environmental practices, etc) but General Mills scored lowest given its lack of available public information. This lack of information may lead consumers to question General Mills’ efforts to ensure safe, healthy and natural ingredients in its products.
Progress Being Made
Former Hugo Boss Art Director, Bruno Pieters, created a clothing line called HonestBy that exemplifies success in sustainability, material use and transparency. By sharing the name of the factory where each product is sewn and the name of its textile suppliers, Pieters is getting out in front of any criticism and taking steps to ensure his products are made well and under the most favorable conditions. This, after harsh criticism of the apparel industry around unsafe and minimal humanitarian working conditions in regions where large companies like Gap and H&M source their textiles.
While the big brands are jumping on the transparency band wagon, it’s time for some of the smaller and more nimble companies to take the lead and speak out on the importance of transparency. The growth in certification and labeling is helping in some ways, but the lack of due diligence, complexity and misinformation on the various certification programs only confuses the end consumer. An innovative program developed by B Labs, a non-profit that “serves a global movement of entrepreneurs using the power of business to solve social and environmental problems” to award companies with the “B Corporation” moniker is taking certification and transparency by storm. A product with a “B Corporation” label is one that can be trusted to have met “rigorous standards of social and environmental performance, accountability, and transparency.” The number of B Corps companies is growing with familiar names like Seventh Generation, Patagonia, Ben & Jerry’s, Method, Green Mountain Coffee Roasters and Plum Organics. Smaller, more regional companies (more than 800!) from 27 countries and 60 industries have signed on to prioritize the environmental and social footprint of their products from place of origin to end consumer.
Why should you care?
The trend towards greater transparency and communication is critical. Traditionally the environmentalists were the ones that cared about how their food was grown, where their products came from and what their companies were doing with their profit. Nowadays, access is equally divided between processed foods and inexpensive consumer products, and all-natural, safely grown and manufactured whole foods and sound products. There remains a cost divide, although that is slowly closing. The more consumers recognize where their dollars go, the more they will allocate budgets to products that are made from the safest ingredients, by the best treated employees and in facilities that are as healthy as possible. Ultimately as more consumers push for greater transparency from the companies filling our stores, the better, healthier and more cost-effective our products will be. That means greater prosperity for our populations and a better future for our families.