CHICAGO — The clean and clear movement, as it relates to food product development and product labeling, established itself in 2015 and will drive product formulation, marketing and retailing of foods in 2016 and beyond. The concept of farm-to-fork transparency includes an open dialogue between all parties involved, including the farmer, the food company, the retailer, the food service operator and the consumer.
Nothing is secret anymore. Companies must address issues openly. Gone are the days when waiting out an issue could be considered a strategy. Today, it is about transparency.
The Center for Food Integrity (C.F.I.), Kansas City, has research showing that if you increase transparency, you increase trust, and trust in today’s food system is imperative for a successful business and a well-fed consumer. The C.F.I.’s most recent research on the subject identifies the most effective practices for building consumer trust.
In “A clear view of transparency and how it builds consumer trust,” a culmination of three years of work, the C.F.I. not only defines transparency, but also provides direction on how a company may be more transparent while addressing consumers’ growing skepticism about food. Included in the report is data from an on-line survey of 2,000 people that explored the attributes most important to consumers when it comes to trust-building transparency. This includes policies, practices, performance and verification.
|Charlie Arnot, c.e.o. of The Center for Food Integrity|
After C.F.I.’s Food Integrity Summit, which took place Nov. 17 to 18 in New Orleans and focused on transparency, Food Business News spoke with the C.F.I.’s chief executive officer Charlie Arnot about the future of transparency in today’s food system.
Food Business News: What does transparency involve?
Charlie Arnot: Transparency is no longer optional. It is a consumer expectation for those in today’s food system. According to our research, there are six components to transparency, as these are areas in the food system most important to consumers. Consumers want to know more about what you are actually doing in these important areas. They also want the ability to engage by asking questions through the company web site and they expect straight answers in a timely fashion.
The six areas are:
• Impact of food on health
• Food safety
• Impact on the environment
• Human and labor rights
• Treatment of animals raised for food
• Business ethics in food production
What were some of the key findings from the survey?
Mr. Arnot: Consumers rate “impact of food on health” and “food safety” as most important. For these issues, they want information on the product label. This includes all ingredients regardless of quantity, allergens and preservatives, as well as disclosure of any ingredients derived from genetic modifications. For other issues, engagement and access to information are key themes.
Consumers want to be able to engage via the company’s web site and they expect information to be provided in easy-to-understand language. This not only includes communication in areas of health and safety, but also environmental performance, labor and human rights, animal well-being and business ethics. When regulations are violated, corrective actions should be provided on the company web site.
Results of third-party audits should be publicly available. Third-party audits of animal well-being and food safety practices are the minimum level of investment for transparency, but because it’s somebody from outside an organization reporting on performance, a third-party audit doesn’t reflect the organization’s values and therefore is not enough.
Storytelling and providing examples of business practices are important. Actually showing and talking about what you do is key to being transparent. Merely making your policies available to the public isn’t enough. Policy is the way a company or organization articulates motivation. Practice is the way you demonstrate your commitment. Practices are a reflection of a company’s internal motivation; they are a demonstration of a company’s values in action. Demonstrating shared values is the foundation for building trust.
Who do consumers think is most responsible for this open communication?
Mr. Arnot: Our study clearly shows consumers hold food companies most responsible for demonstrating transparency in all six areas. Even when it comes to on-farm animal care, an area one might assume people look to farmers to provide, consumers told us food companies are most responsible. This could lead to food companies requiring more information from their suppliers and reporting more information to consumers when it comes to the treatment of animals raised for food.
How can companies identify their shortcomings and improve their transparency efforts?
Mr. Arnot: We have explored the concept of increased transparency for three years and are in the process of developing what we call a transparency index. This will give companies and organizations the tools needed to effectively demonstrate transparency. A beta test of the index was recently conducted by Campbell Soup, ConAgra, Hershey, Kroger, Smithfield Foods, Tyson Foods, DuPont, Monsanto and Phibro Animal Health.
The beta test results revealed strengths as well as opportunities for companies to better provide information important to meeting consumer expectations on transparency. Companies received high marks for providing information about the impact of food on health, food safety, environment and business ethics via company web sites. Areas of opportunity include performance in responding to consumer inquiries and providing information about how they have verified their practices. The index will continue to be refined and specific criteria developed for food companies, farmers, restaurants and retailers.
How can transparency improve a dire situation?
Mr. Arnot: Our study revealed that effectively managing situations that cause social outrage directly influences public trust. Key to that effective management is, you guessed it, transparency. The actual public impact of two situations might be the same, but the outcome for a company or organization can be dramatically different based on preparation and the ability to manage the public outcry that ensues.
C.F.I.’s analysis of transparency began in 2013 when we studied the causes of social outrage and how to effectively manage it to build trust. We learned that two ingredients are necessary to trigger outrage: a high level of concern about the issue and a strong belief that the issue will have a personal impact, or impact vulnerable populations, such as children and the elderly. A video showing animal abuse, for example, may trigger a high level of concern but doesn’t directly impact “me and my family.” A food safety incident that results in sickness, however, is more likely to be a catalyst for outrage as it both causes concern and potentially impacts the health of “me and my family.” It’s no wonder that survey respondents identified health and safety as their top-two wants in transparency. There’s nothing quite as personal as the foods we consume and feed our families.
The Maple Leaf Foods deli meat listeria outbreak of 2008 provides a good example. It was a devastating incident that resulted in loss of life, many illnesses and a massive recall of Maple Leaf products. The company openly accepted responsibility, apologized publicly and redoubled efforts to assure food safety. After $13 million in losses the year of the recall, the company rebounded with $22 million in profits the following year. The stock price took only three months to return to pre-recall levels. While you can never reduce the loss of life to dollars and cents, the stock price is one indicator of how well the company recovered from an incident that could devastate or destroy an organization less prepared, or unwilling to accept responsibility.
Sounds like some companies are doing a decent job of being transparent. Do consumers agree?
Mr. Arnot: Consumers in the study were asked if the U.S. food system is headed in the right direction or down the wrong track. This was the fourth year the question has been posed. An impressive 40% said “right direction,” which was a slight dip from a year ago but up significantly from 30% in 2012. Those who believe the food system is on the wrong track has dropped by 11% in the past two years.
For more information on C.F.I. and its transparency study, visit www.foodintegrity.org.