You may know where your favorite beer was brewed, but do you know the farmer who grew the hops used to make it? Or the birthplace of the barley? And what about your go-to Florida oranges? Can their labels point you to the grove in which they originated?

It might not be too long before the simple scan of a tag could trace the precise origins of produce, meat and the vast array of ingredients in our consumer goods. From craft beer to cotton T-shirts, consumers could learn where their products are created, down to the exact acre of origin.

According to a recent study by AgriNovus Indiana, developed in partnership with Purdue University and EY-Parthenon, Ernst & Young LLP, technology investments in food traceability could reach an estimated $19 billion by 2023. This investment, coupled with emerging traceability advancements, may signal big changes in supply chain visibility and our expectations for food transparency.

“It’s an incredible amount of investment in this space,” said Mitch Frazier, president and CEO of AgriNovus, at a recent virtual roundtable hosted by Forbes Editorial. “And it’s not just driven by efficiency and awareness within the supply chain—consumers are demanding it as well.”

From pandemic-related supply chain disruptions to long-simmering changes in consumer expectations, traceability in agriculture is gaining steam. Here’s how this could change Americans’ relationship with food and other household products.

Post-Covid Supply Chain Agility

The empty grocery store shelves seen nationwide in the early days of the Covid-19 pandemic revealed the food supply chain’s fragility. According to Frazier, the crisis demonstrated how the supply chain was built primarily to serve two masters: large, institutional buyers and consumers.

“What we found is that [a] food supply chain [like that] breaks down very quickly,” he said. “So we started to see more work being applied to traceability to understand where goods are, how do we move more agilely and how do we build that last-mile agility.”

With increased investments in blockchain, genetic tracing, near-field communication,

radio-frequency identification and the Internet of Things, experts expect that locating and rerouting shipments could become more nimble. And the investment isn’t a reaction to the pandemic alone. The AgriNovus study referenced a recent survey in which American executives ranked end-to-end visibility as the primary factor for supply chain success—followed by real-time responsiveness.

“Manufacturers want more insight into where they can drive last-mile agility, so I think this is a really important area that we’ll continue to invest in here in Indiana,” Frazier said. “Post-pandemic, traceability becomes really important from both sides of the supply chain.”

Better-Informed Consumers

Consumers are increasingly concerned about where their products come from. In fact, many may be willing to pay more for goods that offer supply chain visibility. Food brands are responding to these concerns by marketing local ingredients, sustainable sourcing and detailed nutritional information. With better traceability, consumers can rely on more than just the packaging when seeking product information. Buyers could verify where a food item comes from, for example, and learn more about the journey that led it to their plates.

One promising technology with potential to help answer this consumer demand is blockchain, a type of decentralized database that updates in real time.

“[Blockchain] provides that visibility,” said Brock Herr, VP of business development for the Indiana Economic Development Corporation. “I sit there and track my packages to see where they are. Same goes with anything food-and-ag-related. When you’re putting it in your body, you’re much more in tune with where it came from.”

Research suggests that providing consumers visibility into supply chains is also a potential market advantage for businesses. “There are a large number of studies showing consumers value and are willing to pay for traceability in the food supply chain. Traceability is also taken as ‘given’ by many consumers and will emerge as a market access issue for producers,” cites the AgriNovus report.

Lowering Supply Chain Risk

Another traceability benefit for both consumers and the agriculture industry is the potential to avoid the type of broad safety recalls that have consumers in several states tossing their romaine.

“If there’s a product defect or contamination somewhere along the line, what the blockchain allows you to do is to really pinpoint where that batch or that piece of product came from,” said Herr. “You know what pieces of machinery it touched, what truck beds it was in or what intermodal items it may have traveled in. To trace that back will not only stop the flow of where that contamination came from, but prevent you from having to do, maybe, an entire eastern United States recall.”

The transparency of traceability also benefits innovative companies by enabling them to better share their product stories and potentially avoid consumer skepticism that could threaten growth. One company that raises genetically modified salmon in land-based farms in Albany, Indiana, for example, offers consumers in the Midwest access to sustainable, locally sourced salmon. With traceability back to their local source, the company helps consumers understand their food while also demonstrating the sustainability advantages of genetic modification.

Industry experts pinpoint traceability as a key focus for food and agriculture companies. From lowering supply chain risk and increasing agility to meeting the demands of increasingly sophisticated consumers, the more visibility the industry offers into supply chains, the better off everyone is—and thanks to increasing investment and cutting-edge technologies, a future where we better understand our food is in the works.

 

Author: Natalie Burg, Forbes