Gaining Customer Loyalty Through Transparency
By Katy Jones
Smart phones and the digital age have enabled consumers to be more informed than ever about the food companies they patronize and food they eat. After a few taps, a consumer can instantly find out about a company’s ethical practices, animal treatment, labor conditions. And if a company has ever faced a recall, consumers will know about that too.
Consumers feel empowered more than ever to ask questions and they are demanding more visibility into the food they are choosing to eat. From lifestyle choices, like vegetarianism or veganism, to allergies and diseases like lactose intolerance, gluten-free and Celiac’s disease, people have a lot of question about the ingredients used in food processing and production.
We are now living in an age where consumers are demanding food companies to be as open and transparent as possible or face losing their business. To better understand the evolving consumer mindset, FoodLogiQ conducted a transparency survey of over 2,000 people to gauge their sentiment around food traceability and expectations for food companies regarding recalls and foodborne illness. The following are highlights from these findings.
What Is Gaining the Public’s Trust?
More than ever, consumers are patronizing companies that are being open with their supply chain practices and that are ethically sourcing their ingredients, including foods from local organic farms that dropped genetically modified ingredients and those that are avoiding preservatives and chemicals. Companies that embrace transparent marketing through labeling, advertising, blogging and through the media about their transparency initiatives are also being embraced by the public.
What Are the Deal Breakers?
Recalls are on the rise, jumping four-fold in number from just 5 years ago. The average cost of a recall to a food company is $10 million in direct costs in addition to brand damage and lost sales—a financial knockout to most companies for sure.
The FoodLogiQ transparency survey revealed that 50 percent of consumers expect that a recall should be resolved within 1-2 days. The faster a company can address the recall and return to business as usual, the faster the customers will return back to the brand.
If a food company experiences a recall leading to consumer sickness, 35 percent of the FoodLogiQ survey respondents said they would avoid this company for a few months and only maybe return after the issue has been resolved. Nearly a quarter said they would never use or visit the brand again after a recall!
Public expectation is that food companies should be accountable and address recalls or foodborne illness quickly. By continuously monitoring supply chains, you can greatly improve the speed of resolving a recall. Supply chain visibility where you have end-to-end traceability will provide you the accuracy to make swift and decisive decisions during this time of crisis and ensure your customers and brand reputation remain intact.
How to Build Customer Loyalty
As mentioned above, these food quality conscious consumers have never been more informed than they are today and they expect food companies to be open, honest and transparent. Labeling and transparency go hand-in-hand. In the FoodLogiQ survey, over half of the respondents want as much information as possible on the label, and nearly 40 percent want country-of-origin, allergen alerts and genetically modified ingredients all identified on the label.
These data support that consumers are setting a precedent for food companies to continue to be transparent with the path that their food takes from the farm to the table. And in the case of recalls, consumers are acting with their wallets, with high numbers pledging to take their business elsewhere if their expectations are not met.
Transparency is no longer a “nice to have” quality for food companies—it really is mandatory. Not only because of regulations like FSMA but also in the eyes of the consumer. By offering transparency into your supply chain, such as naming the specific farms where you sourced your ingredients and clearly listing on the label all the ingredients—especially common allergens and animal products—will grow and retain customers. By being proactive and creating a thorough recall plan, you can act swiftly if your brand is faced with a recall.
By making it easier for your customers to obtain the information they want, you can foster stronger, more authentic relationships, build brand loyalty and gain an edge over your competitors. By adapting to the shifting landscape and incorporating best practices and technologies is now critical for food companies to optimize their supply chain, eliminate inefficiencies and protect their brand. By doing this, food companies can provide tremendous business value, gain visibility, improve transparency and increase traceability all while providing the consumer the best quality food and experience.
Download your free copy of A Food Company’s Guide to What Consumers Care About in the Age of Transparency to discover additional insights into what consumers expect from food companies, how to build customer loyalty while protecting your brand.
Katy Jones is chief marketing officer at FoodLogiQ, a food safety, quality management and traceability platform helping the food industry support safe and high quality food products across the supply chain.