How to nip the growing problem of organic food fraud in the bud

Business management software for food

When consumers pay a premium for certified organic produce and packaged foods, they should feel confident that they’re getting what they pay for: a product free from synthetic fertilisers, pesticides, antibiotics, growth regulators and genetically-modified organisms. There is also an underlying ethical assumption that those revenues are going to farmers engaged in sustainable agricultural practices that promote ecological balance and conserve biodiversity.

Products sold as organic must, by law, follow certain standards – both European and national – and have to be regularly inspected and certified by approved bodies. At a global level, many countries have regulatory requirements similar to those in the EU and there are formal agreements covering trade in organic products between these countries

However, because organic and eco-labelled food products command a higher price, instances of food fraud, such as adulteration and mislabelling, are becoming more commonplace, resulting in consumers being misled and overcharged. What’s more, failure to enforce standards can cast a shadow over the term ‘organic’ itself, which should be synonymous with authenticity.

Staying competitive and relevant
The problem is amplified with imported products that involve intermediaries, some of whom are looking to make economic gains by deliberately mislabelling foods as organic and selling them at a premium. One example is the 2016/2017 shipment of over 16 metric tonnes of soybeans that found their way to California from Ukraine via Turkey.

What started out as conventionally-farmed, pesticide-treated soybeans under-went a remarkable transformation to ‘organic’, which saw the consignment’s value increase by US$4 million. This wasn’t a one off: two further shipments of corn and soybeans revealed similar findings. And because these imports were largely destined for animal feed, they would be likely to infiltrate the supply chain through a variety of foods including ‘organic’ eggs, dairy, meat and poultry.

Meanwhile, brands are finding themselves at risk. While consumers increasingly scrutinise labels for farm-to-fork provenance, not all retailers can verify organic products back to the point of origin due to a lack of upstream supply chain visibility.
While tier 1 and some of tier 2 suppliers may be known, the view of tier 3 and beyond is often obscured. Tackling the root of the problem

In April 2017, imports of organic products into the EU became subject to a new EU electronic certification system, to reduce potential fraud and provide more comprehensive statistical data on organic imports. As well as the goal of reducing organic food fraud, the addition of import certificates to the existing Trade Control & Expert System facilitates trade by enabling partners and competent authorities to easily obtain information on the movement of their consignments.

Forward-thinking companies, however, look beyond the ‘stick’ of regulation to the ‘carrot’ of consumer trust, and are actively seeking ways to reduce their susceptibility to organic food fraud and protect their brand. They need to account for every part of the production process, which means farming practices, distribution paths, storage procedures and product delivery must all be made visible to business managers.

External traceability is vital to validating the presence of attributes such as organic certification for the entire agro-food sector, which includes animal feeds. This requires all parties in the supply chain to systematically link the physical flow of materials and products with the flow of information about them.

However, many traceability systems today were only designed for internal purposes, providing an one-up, one-down view for the company using that system. Many companies, particularly those that do business with large retailers that impose strict standards, will quickly find themselves outgrowing manual methods or standalone software for batch/lot tracking. At this tipping point, an ERP solution that supports strong batch/lot traceability features becomes a must-have.

A fresh focus on traceability
With traceability-focused software, the product’s batch/lot number follows it from seed to table. By capturing the organic certification data as part of lot tracking, organic status can be tracked through the supply chain. For example, a bottle of certified organic wine should be traceable back to the exact vineyard from which its grapes were harvested.

An organic apple should be able to be traced back to the farm where it was grown, and it should even be possible to pinpoint the exact orchard from which it was picked.

This traceable chain of custody is what empowers consumers to trust certified organic brands. Shoppers are becoming increasingly savvy about what they eat and how it’s raised; wherever there is opportunity for differentiation by helping the consumer understand where their food is coming from, it should bear fruit in the form of customer loyalty based on confidence, not blind faith.

To find out more about how Signum Solutions and SAP Business One can help you achieve end-to-end trace ability to maintain the safety and integrity of your products, speak to one of our industry experts on 01244 676 900

How Blockchain is set to transform food safety and integrity

As consumers, our communication patterns, searches and online habits create a digital trail that means algorithms are getting to know many of us better than we know ourselves. Yet the trust and transparency challenges that confront the globalised food system – such as substitution, tampering, misrepresentation, illegal production and contamination – are still compounded by a lack of supply chain traceability.

The problem is, every company has its own way of working: inaccuracies are caused by traditional paper tracking and manual inspection systems; transactions are handled in siloed databases, resulting in opaque supply chains. When it comes to a recall, this can make the difference between identifying a few contaminated bags of spinach, and pulling the entire stock of spinach from hundreds of stores.

As one of 2017’s most talked-about technologies, Blockchain is being positioned as the way to “provide trust in an untrusted world” by transforming systems of record, with use cases ranging from carbon credits to diamonds. But what is it, how does it work, and how can it be applied to solve food supply chain management challenges?

What is Blockchain and how does it work

Blockchain was developed in the aftermath of the financial crisis of 2007/8 to deliver transparency, security and efficiency in managing transactions between multiple parties without involving banks. This gave rise to crypto-currencies such as Bitcoin, which can be transmitted worldwide without friction: no intermediaries, regulation or the need to know or trust the parties involved – the so-called “trustless” system.

In the simplest terms, Blockchain is a way to structure data. It uses distributed ledger technology: a database that, rather than being stored in one place, is continuously synchronised and shared among all members of a peer-to-peer network for real-time data transparency.

When a digital transaction is carried out, it is grouped together in a cryptographically-protected block with other transactions that have occurred in the last ten minutes and sent out to the entire network.

Once validated by consensus, the block of transactions is timestamped and permanently added to a chain in chronological order. New blocks are linked to older blocks and contain a reference to the previous block (called a “hash, which is somewhat like a digital fingerprint).

A distributed database cannot be hacked, manipulated or disrupted in the same way as a traditional, centralised database with a user-controlled access system. The data is immutable: once it has been written to a Blockchain, nobody – not even a system administrator – can modify or tamper with it. The technology can work for almost any type of transaction involving value, such as money, goods, land ownership, work, medical information or even votes.

How can Blockchain be applied to the food industry?

Today’s supply chains have an inherent weakness: individual parties are using disparate digital systems, different technologies, and paper-based processes to bridge the gaps. This makes it inefficient to share the critical data that drives supply chain interactions, or to guarantee a high degree of rigour and accuracy.

Blockchain-infused traceability systems could deliver the transparency and trust that has eluded the food industry until now. With immutable data, it has the potential to give growers, suppliers, processors, distributors, retailers, regulators and consumers access to reliable information on the origin and state of food.

Blockchain for agriculture – It will become feasible for farms to create digital records for individual animals to track the lifecycle from farm to fork, using technology such as RFID tags. This enables consumers to read the “digital history” of meat down to the individual animal, including who raised it, how it was raised, what it was fed and who processed it, simply by scanning a QR code on the packaging. As the lynchpin of our food supply, farmers typically have little visibility to the end consumer, and could stand to gain a new voice and new distribution opportunities through participation on Blockchain. There are also exciting possibilities for creating business value with new, previously unattainable data that could be made available through Blockchain, such as how much fertiliser or water was used, as evidence of sustainability assertions.

Blockchain for distributors – Distributors could provide more transparency to processors and buyers in terms of product type, farming practices, harvest data and Fair Trade or similar certifications. With the addition of appropriate sensor technology, valuable information could be provided to actors up the chain, such as the duration of the journey while a product is in transit, or the temperature and humidity of the truck it travels in, to demonstrate that the product is fir for use or sale on arrival.

Blockchain for food processors and producers – As food processors often struggle to validate the origin of their ingredients, Blockchain would enable the validation of information about input products without violating trust be-tween individual entities. For food producers, the nature of Blockchain would mean that any attempt to tamper with a product as it moves through the sup-ply chain could be immediately identified and prevented before it ever reaches a retailer.

Blockchain for retailers – As bricks and mortar stones are faced with in-creasing competition from online food providers such as Amazon, supermarkets often want to provide local produce as a differentiator. With Blockchain providing a web of trust, the information value provided by local farms could be bound to the claims made by grocers. This could effectively create a new model for providing local produce through a national chain, with the evidence of quality, transport and freshness that consumers insist on. Not only can this rich seam of information be used to create a point of sale educational opportunity, but it also bolsters the capacity for a digital recall in the event of a safety issue, such as food-borne illness. In the event that a potentially contaminated product somehow made it onto the shelves, stores could rapidly identify, isolate and remove only the affected items without the need for a costly whole-batch recall.

Blockchain for foodservice – Restaurants have a direct relationship with the ultimate consumer and a growing number are keen to emphasise the quality and sustainability of their food. It could prove a considerable competitive ad-vantage be able to authenticate their menus and justify a premium for local, organic or free range produce.

Blockchain offers many practical solutions to today’s impractical system, and should promote better communication between all parts of the food chain and, just as importantly, between producers and consumers.

Blockchain offers many practical solutions to today’s impractical system and should promote better communication between all parts of the food chain and just importantly, between producers and consumers.

The future is already here

The promise of Blockchain isn’t far-off utopian vision. US agricultural conglomerate, Cargill, has made an early foray into Blockchain, with a pilot through its Honeysuckle White brand. The initiative, launched ahead of 2017’s Thanksgiving celebrations, allowed consumers to trace their individual Thanksgiving turkey from the store where they bought it to the farm that raised it.

Walmart is currently piloting Blockchain technology to trace mangos, in their US stores, and has cut the time it took to provide gate-to-plate traceability to two seconds – a process which used to take weeks. Walmart is also among several companies embracing a new initiative in China focused on food safety and traceability with Blockchain as its technical foundation, following numerous high-profile fake food scandals in the world’s most populous country.

A consortium including Dole, Nestlé and Unilever is working to identify opportunities for the use of Blockchain to improve data integrity and trust between parties in “Big Food”. Meanwhile, technology vendors including IBM and Microsoft are collaborating with GS1, the global business communications standards organisation, to determine how the structure data stored or referenced by Blockchains for shared communications and interoperability through the use of standards.

So while Blockchain may seem like the buzzword of 2017 and will no doubt be the subject of much discussion, it has real potential to be a game-changer for food supply chains, helping the industry to achieve the holy trinity of trust, transparency and traceability.

To understand how Signum Solutions can help in your Blockchain journey, contact info@signum-solutions.co.uk

Are SMEs Missing Out on Mobile?

 

  • 80% of small to medium sized businesses give their employees smart mobile devices to use at work
  • 82% of tablet owners use their tablets for work

 

The worldwide mobile worker population will represent 37.2% of the total workforce by 2015, with 33% of smartphone users using mobile CRM, 25% using mobile field service management and 24% using time management and data capture.

 

What’s stopping SMEs from joining in?

  • 59% of SMEs’ number one concern is cited as lost or stolen devices
  • Only 27% of companies think that their mobile security is adequate
  • Only 35% of SMEs using mobile devices have implemented security management solutions

 

Helping SMEs to get started with mobile

You can easily transform your business by using proven mobile solutions from SAP – already used by 20,000 customers worldwide.

There are hundreds of apps from SAP and its partners, with 40% designed by SAP partners such as Signum Solutions, which have industry specific knowledge and expertise.

 

Why do SMEs choose SAP for mobility?

  • Ease and scalability: rapid deployment means SMEs are up and running quickly and smoothly
  • Backend diagnostic: ability to connect to any application and database, whether SAP or a third party
  • Deployment options: choose from hosted or on-premise options

 

For more information on how mobility can help you grow your SME business, contact Signum Solutions on 01244 676900, email enquiries@signum-solutions.co.uk or visit the website: http://bit.ly/1ln7qYh

 

Source: “Mobile and SAP: Not Just for Large Enterprises” (SAP AG, 2012).