How food companies can
streamline compliance
and improve consumer
relations through
transparency
Sage X3
Improving transparency in
food manufacturing
1
Table of contents
Introduction 3
The value of transparency 3
What is transparency? 3
Motivating transparency 4
Regulators 4
Consumers 4
Improving transparency in the supply chain 5
Improving transparency in processing 6
Marketing with transparency 7
Improving transparency with business management solutions 7
Sage X3
Improving transparency in food manufacturing
2
Introduction
The value of transparency
Transparency is a watchword in the food industry these days, an industry concern
motivated by both regulators and consumers. However, many food companies do not
have a clear understanding of what transparency means, why to pursue it, what
it involves, or how to improve it. This white paper outlines the key elements of
transparency and offers some suggestions for how food manufacturers can improve
transparency efforts to their benefit in the supply chain, in operations, and in marketing.
What is transparency?
In the food industry, transparency involves openly sharing information about how food is
produced. Many elements of transparency are already widely practiced and mandated in
forms like nutritional labeling and truth-in-advertising statutes. However, transparency
expectations are increasing. More and more, both regulators and consumers are
looking for information ranging from ingredient provenance to the specific processing
methods employed by the manufacturer.
Transparency: openly
sharing information
about how food is
produced.
Sage X3
Improving transparency in food manufacturing
3
Motivating transparency
Efforts to increase transparency in food manufacturing are driven by both regulators and
consumers. Although the industry itself is a major source of innovation in transparency, the
trend is primarily driven by external influences. Understanding these influences and the
expectations that regulators and consumers have is essential for taking effective steps
toward transparency.
Regulators
Regulatory agencies on the local, state, and federal levels are requiring increasing levels of
transparency from food companies. The Food Safety Modernization Act (FSMA) of 2011
initiated a sweeping change in the food industry by greatly expanding the powers of the
FDA to mandate increased record keeping and record sharing. Food companies should
therefore expect future regulatory compliance to involve expanded tracking
programs and the need to provide greater information about suppliers and
sourcing. Although the precise requirements of the FSMA have yet to be defined, the act
has already motivated transparency shifts like a redesigned nutrition label and stricter
verification requirements for foreign suppliers.
Consumers
Consumers have a broader concern about transparency, motivated by health and safety
concerns as well as the desire for sustainable food products. As consumers become more
educated and have more access to information, they expect more information about their
food, not just from consumer-facing companies but also from their suppliers at ingredient
manufacturers. Many consumers are acutely concerned about the geographical origin of
their food, as well as the methods used to grow and process it. Smart food companies
understand that consumer interest drives regulation and purchasing decisions,
so even in the absence of formal regulation, expanded transparency is important
for consumer relations and brand growth.
Consumer attitudes toward transparency
Consumer attitude Percentage in favor
Support labeling foods with genetically modified
organisms (GMOs)
91%
Want to know more about where their food comes from 65%
Would like to see the food industry take more action in
educating people about how food is produced
67%
Would like to know more about how their alcoholic
beverages are made
43%
Feel the food industry is transparent 31%
Sources: Just Label It!, SHS FoodThink, Mintel
Many consumers are
acutely concerned
about transparency in
the food industry.
Sage X3
Improving transparency in food manufacturing
4
Improving transparency in
the supply chain
The first step in establishing a successful transparency program is to look to the supply
chain. Although current regulation requires tracking only one step in either direction from
your facility, this guideline can be expected to expand to two-step tracking or even full
supply-chain visibility. Furthermore, given the increasing expectation from
customers that food companies will provide detailed transparency information,
a more transparent supply chain seems like an inevitability even if regulators do
not ultimately require it. Accordingly, supply chain transparency needs to be a priority
for any food manufacturer.
A full discussion of supply chain transparency is beyond the scope of this report, but the
foundation must rest on partnering with reliable suppliers. According to John T. Shapiro,
writing for Food Safety magazine, “Any supply relationship is fraught with risk. The
answer? Transparency. Stated otherwise, do you know with whom you are dealing? And
do you trust them?”
Shapiro’s article for the magazine’s digital edition outlines the basic elements of supply
chain transparency, including analysis of the supplier’s facilities for FSMA compliance,
drafting a sufficiently detailed partnership agreement, and ongoing audits. The bottom line,
however, lies in knowing and trusting the people you are dealing with. Food
manufacturers, therefore, must prepare themselves to dedicate more time to
evaluating and nurturing relationships with their suppliers. Furthermore, they must
be prepared to communicate with outsiders (regulators, consumers) about those
relationships in order to fulfill transparency expectations. Sharing that information will build
trust down the supply chain, just as food companies must have trust in their sources.
Supply chain
transparency needs to
be a priority for any
food manufacturer.
Sage X3
Improving transparency in food manufacturing
5
Improving transparency in
processing
Just as it is crucial to have transparency along the supply chain, it is essential to have
transparency within your own operations. Though this may sound easier than supply chain
transparency, in fact it can be quite challenging. Although you may have a high-level
knowledge of all your manufacturing processes, it is essential that you not only
have detailed information about everything you do but also that you be able to
make appropriate information readily available to regulators, consumers, and
your own food safety personnel. Anything less will fail to satisfy new regulations and
consumer expectations.
The FSMA will give the FDA greater access to food company records than ever before and
will mandate expanded recordkeeping within your organization as well. Accordingly, it is
critical that food manufacturers dedicate more attention to how they track lots, record their
manufacturing processes, and share information within their organization in order to
preserve food safety and promote transparency.
Transparency within
your operations is
essential.
Sage X3
Improving transparency in food manufacturing
6
Marketing with
transparency
Although the requirements of transparency may sound like a burden, they also represent a
powerful marketing opportunity. Consumer desire for transparency in food means that
companies that can provide transparency grow in consumer esteem and, ultimately, brand
equity. Major food companies like McDonald’s have conducted far-reaching
transparency campaigns with impressive results. Furthermore, transparency efforts
can help your company eliminate brand-damaging problems like recalls by helping you
avoid spoilage and prevent cross-contamination of allergens or contaminants. On the
whole, then, a successful transparency campaign is more than worth the effort.
Improving transparency
with business management
solutions
The foundation of successful transparency is tracking: keeping tabs on your lots,
processes, suppliers, and more. Sage X3 streamlines tracking and puts all your
information in an easy-to-use interface that’s accessible to everyone in your
organization. The solution provides powerful tools supporting transparency, not just
through tracking but also by making it easier for you to share relevant information with key
stakeholders.
For additional information about transparency, regulatory compliance, or resolving
challenges in food manufacturing, visit our Sage X3 Food Industry Resource Center
at www.SageFoodSolutions.com, or call us at 1-866-530-7243.
Transparency isn’t just
a challenge; it’s an
opportunity.
Sage X3
Improving transparency in food manufacturing
7
Sage
6561 Irvine Center Drive
Irvine, CA 92618-2301
866-996-7243
Sage.com
©2015 Sage Software, Inc. All rights reserved. Sage, the Sage logos, and the Sage product and service names mentioned herein are registered trademarks or trademarks of Sage Software, Inc., or its affiliated entities.
All other trademarks are the property of their respective owners. 15-00791 9/15
Improving Transparency in Food Manufacturing
Efforts to increase transparency in food manufacturing are driven by both regulators and consumers. Although the industry itself is a major source of innovation in transparency, the trend is primarily driven by external influences. Understanding these influences and the expectations that regulators and consumers have is essential for taking effective steps toward transparency.