Who Owns the Supply Chain?

Posted by Marc Simony on March 20, 2019 at 8:46 AM

sharon-mccutcheon-556371-unsplasWe all know that the supply chain doesn’t write checks, isn’t actually a chain, and is riddled with risks. Few, however, know that food makes up the largest portion of the CPG supply chain. So, this unruly beast is vast. In fact, it’s global and speaks every language.

As humans we’re curious and want to learn. That’s why we’re so fascinated with origin, which some call traceability. For some, traceability to the country of origin is good enough; others need to know the cow that sponsored the hamburger, or the tree that produced the chocolate.

But for the mainstream consumer, knowing what their food is about is as important as what’s in their food (the Ingredient Declaration and the Nutrition Facts Label). And since products with these labels typically have lost their “identity” – through normal processes “...such as rework, co-mingling, blending, and other “messy” steps...” – it’s vitally important for retailers and brand owners to get the “about” step right.

For the traceability vendors, conventional wisdom insists that retailers tell manufacturers what they need; manufacturers then create it, which requires heavy participation from suppliers. So, if you’re a traceability vendor, you need to control retailers, because retailers dictate what manufacturers do. It’s a time-tested, top-down, go-to-market strategy: Retail is the dog that wags the manufacturing tail.

Which brings us back to the supply chain. Who owns the supply chain? The consumer!

No way!!!

Way, total way...

Let’s have a look at cause and effect to analyze the above claim. What the consumer wants, the consumer gets. Today, the consumer wants “Free From”: free from artificial sweeteners, sugar, artificial preservatives, fat, salt, cholesterol, dairy, meat, gluten. This is reflected in the free-from market size, which in 2017 posted $21 billion in sales. I’m sure it’s bigger today and will be ginormous tomorrow.

But this can change at a moment’s notice. If the consumer wants a lard bar tomorrow with 200 percent DV sodium and glyphosate frosting, the consumer will get it. That also means the consumer controls the retailer, and through trickle down demand, owns the supply chain.

How can retailers (private label) and manufacturers thrive in this environment?

Don’t just deliver consumer products, deliver the “about” data, too. That’s where TraceGains is uniquely qualified to help you lead the market. TraceGains is the only supplier relationship management (SRM) vendor that also operates at the ingredient level. Everyone else is focused on the center-of-the-store finished goods, or the perimeter where products don’t experience identity loss (easy stuff, really).

What does this mean to you? We deliver:

  • The proof that substantiates your marketing claims, which your consumers demand.
  • The proof that what goes into the product meets your FSQR needs.
  • The vendor and ingredient sourcing directory that lets you search based on consumer needs.
  • The ability to design new products around marketing claims and consumer preferences.
  • The collaborative platform – TraceGains Network – that reduces your NPD by as much as 25 percent.
  • The API to connect TraceGains to your internal systems of record (ERP, PLM, CRM).
  • Integration with ESHA Research’s Genesis nutrition labeling application.

So, yeah, the consumer is the tail that wags the supply chain beast. But TraceGains has tamed it (and you can subscribe to it).

Tags: Product Development, food labels, transparency, supply chain, TraceGains Network, retail