People's survival relies on the food they consume. They expect to have a wide range of options that allows them to choose what types of groceries they place in their carts. Consumers place their trust in these stores and the brands they carry to bring them nutritious and filling foods that will keep them happy and healthy. However, with the number of recalls throughout the food production industry, confidence in the supply chain is lacking and calls for higher transparency.
Consumers lack trust in retailers
In a Trace One survey of U.K. and U.S. consumers, less than 7 percent of respondents trust the foods they eat, and it's easy to see why. In July, nine products were recalled due to contamination from salmonella, E. coli and staphylococcal enterotoxin, according to the U.S. Department of Agriculture. When people see these announcements, they may rethink their purchasing decisions.
Approximately 91 percent of U.S. and U.K. buyers said it was important to know where their food came from, Trace One reported. Yet only 13 percent are confident that they have that knowledge. Transparency is the key to manufacturers and retailers earning their customers' trust. They require information about where materials are coming from, the conditions they're grown or made in and the effects those elements will have on their health.
"Retailers need to validate their product ingredients and the origins of those ingredients, and consistently communicate that information throughout the supply chain and with consumers," Chris Morrison, chief marketing officer of Trace One, said in a press release. "If brands want shoppers to trust their products more, those brand owners must be armed with accurate and reliable product information that enables brand transparency and, ultimately, builds consumer confidence and trust."
Companies must improve communication
Transparency might be slightly harder than it seems. Global sourcing can make it more difficult for companies to trace where their materials and products are coming from. To be able to provide consumers with the information they seek, businesses need to discover those details for themselves, Morrison explained in an article for The Guardian.
Companies know from where they directly receive products, and they may be familiar with who their supplier gets the items from. However, they might not be informed about the supply chain beyond that point, which can lead to problems for brands, Morrison claimed. Poor business practices may lead to customers looking elsewhere for their desired products, which hurts companies' sales. According to Nielsen's 2014 Global Survey on Corporate Social Responsibility, more than 50 percent of consumers are willing to pay more for brand items they know they can trust.
"Consumers around the world are saying loud and clear that a brand's social purpose is among the factors that influence purchase decisions," Amy Fenton, global leader of public development and sustainability at Nielsen, said in a statement. "This behavior is on the rise and it provides opportunities for meaningful impact in our communities, in addition to helping to grow share for brands."
Increasing transparency leads to countless benefits for companies. Not only will they improve their images in the public eye, they may also see increased productivity and efficiency, Morrison explained. Consumers want to do business with organizations that they relate to and can rely on. If those corporations can't provide people with the details they need to make informed decisions, customers are going to grow weary of those brands.
To keep business going and consumers happy, companies should do whatever they can to improve transparency in the supply chain.