Food fraud, economic drain or food safety concern?
Food fraud, also known as economically motivated adulteration (EMA), is “any suspected intentional action by businesses or individuals for the purpose of deceiving consumers and financial gain”.
Due to the increasing complexity of global supply chains, managing the risk of food fraud is more important than ever. Offenders see economic opportunity in the food business, which escalates their motivation to adulterate food. While food fraud is often motivated by profit, some types of food fraud can also pose a direct threat to the customers health; this makes food safety and food fraud inextricably linked.
Processed food manufacturers have a lot at stake with food fraud. PWC estimates food fraud costs the global food industry $30 to $40 billion annually. Besides the economic cost, food fraud can result in a serious public health crisis and damage a brand’s reputation.
A national definition of food fraud could support the identification of targeted actions, and tools which help align national legislations and measures with Codex Alimentarius food standards help address the problem.
Industry gets food fraud wake-up call
While some studies indicate that a recall may improve the company’s image, largely if the company adopts a socially responsible attitude, it is commonly accepted that product recalls have a negative impact on brand confidence, sales and pricing and, in some cases, the public’s perception of the food industry as a whole.
A 2021 consumer survey found that 44% of respondents believed they bought fake food in the past 12 months, including fake alcohol, baked food, beverages, pet food, prepared meals or processed food. Furthermore, 39% of respondents said they will no longer trust brands with fake products.
While EMA is primarily driven by financial gain and perpetrators do not generally intend to cause harm in consumers, thousands of illnesses and hundreds of deaths occur annually due to food fraud.
Food fraud includes many types of deception carried out for the purposes of economic gain.
- Counterfeiting: Products are passed off as another product
- Mislabeling or misbranding: Deliberate mislabeling of food products with the intent of deceiving the consumer regarding what is actually in the package
- Substitution: Fraudulently mixing cheap low-quality materials into products to increase their profit margins
- Tampering: Adding either chemicals or dangerous toxins to a product
Today, food regulations are becoming global, making food production more complex. This makes it more difficult for both the industry and government regulators to oversee the supply chain.
PWC attributes the collision of global megatrends to the increasing vulnerabilities in food supply chains, making it easier for criminal activity. Extreme climate change and scarcity of resources is resulting in increased competition. This, along with urbanization, changing diets, and rising incomes have resulted in a greater consumption of processed foods, incentivizing food fraud.
Minimize food fraud vulnerability
Increasingly complex food supply chains make it imperative that food manufacturers intensify efforts to assess the food fraud vulnerability of ingredients they use in the production process. Devex PLM and other offerings from Selerant provide system tools that can help manufacturers ensure ingredient integrity.
Supplier selection: procurement teams must balance a global supply chain that includes a huge ecosystem of suppliers with regulations that require transparency for each raw material source and manufacturing process that impacts customers. Selerant’s Supplier Relationship Management (SRM) tool enables manufacturers to more easily identify and mitigate potential ingredient risk factors with individual suppliers across the whole supply chain before production.
Risk assessment: Selerant provides a full snapshot of supplier manufacturing standards, including detailed questionnaires to communicate and enforce vendor quality requirements. Additional tools within Selerant’s supplier collaboration portal continually track how supplier goods and processes align with manufacturer needs and testing requirements of multiple plants and manufacturing scenarios. By connecting product and quality history, Devex significantly speeds problem resolution.
Performance tracking: Selerant’s supplier relationship management tool meets New Product Development and Introduction (NPDI) challenges head on, such as the on-boarding and management of diverse vendors and the transition of supplier-provided data into PLM-usable formats, i.e., structured data. This allows users to make informed decisions during product development for cost, quality and performance optimization.
Ingredient quality management: Devex includes critical quality attributes in the formulation creation process from the very start. It uses quality data fields and measures embedded directly in ingredient, formula, finished product, and packaging specification templates. Devex also continuously enforces Corrective Action Preventive Action (CAPA) and Non-Conformance Material Report (NCMR) plans directly within product development steps to prevent the reoccurrence of problems.
Devex helps protect brands and consumers
The increasing complexity of global supply chains makes overseeing the food chain more challenging, yet more imperative. It only takes one adulterated, counterfeited, or mislabeled food ingredient to jeopardize a brand’s reputation and endanger the well-being of consumers. As such, food manufacturers need greater supplier transparency in sourcing ingredients and identifying potential problems.
Devex PLM enables processed food manufacturers to more easily identify potential supplier risk factors. It gathers and centralizes data to harmonize information across the enterprise, preventing problems from arising anywhere throughout the production process.