More food is being traded across borders than ever before. Businesses are hungry for growth and are looking to grow revenue in foreign markets. Faced with razor-thin margins, companies are sourcing from low-cost suppliers around the world. Globalisation is increasing food safety and quality risks, and is making traceability and control over supply chains more challenging.
As global food trade becomes subject to more regulations, food companies are spending millions on the integration of their supply chains to improve safety and traceability. At the same time, governments are issuing policy and strategic announcements to encourage the integration of supply chains to assist in making improvement.
High-profile food safety and fraud scandals are triggering public health concerns and damaging trust in the industry and in governments around the world. With the ubiquity of social media and increasing public interest, a single lapse in quality control can quickly become a scandal that makes international headlines.
Governments, most notably China and the US, are adopting stricter and more complicated regulations for quality standards, supervision and sanctions. This creates unprecedented compliance risk and additional costs for companies with operations, suppliers or customers in multiple jurisdictions.
The growth of Asia’s economies, especially China and India, is creating enormous new consumer markets. In 2015, the middle class population of Asia-Pacific will surpass that of the US and Europe combined. By 2030, we predict that the purchasing power of the E7 economies will overtake that of the G7.
Scientific advances are increasing our ability to detect hazards and identify risks. New technologies, such as on-farm GPS mapping and DNA labelling are now commercially viable. Along with data analytics, these technologies can enable tighter controls along the entire length of the supply chain that will improve quality and efficiency. Advances in traceability will increase accountability and enable companies to execute fast, targeted recalls. Traceability combined with social media will give consumers unprecedented transparency into the origins and ingredients of their food.
Economic development and population growth are driving increases in overall food consumption, while a growing middle class is demanding better quality and more variety. Greater purchasing power has resulted in a significant increase in consumption of resource-intensive protein products, with significant implications for the environment and agriculture. Demand for certain standards, such as organic or halal, is also growing.
The internet gives consumers access to vast amounts of information about food and health issues. At the same time, social media enables every consumer to share and document their views on the quality and safety of food products. Using nothing but their phone, anyone can use text, pictures and videos to expose issues and trigger a food scandal. In response, food companies are investing more in communications, risk management, and crisis response planning.
World-class food companies are setting internal standards that are far more stringent than those required by law. Instead of merely complying with regulatory safety requirements, they are aiming for exceptional quality that distinguishes them from their competition and builds consumer trust and brand loyalty.
With growing populations and prosperity, agricultural production will need to increase by 70% to feed the world’s people by 2050, yet our current resource consumption is already unsustainable. Governments and companies are using new technologies, corporate acquisitions and even diplomatic relations to secure access to the water, energy and land resources required to ensure sufficient food supplies in the future.