Ingredient Standards Are Vital to Supply Chain Integrity

Maintaining food security and safety depends on protecting the integrity of the entire food supply chain. While our food has become multinational, diverse, and nonseasonal, these improvements have come with a reduction in supply chain transparency. At the same time, industry and governments have become increasingly aware that transparency is fundamental for ensuring safety, quality, and food defense. Consumer interest in the origin of foods as well as in production practices for food products continues to grow. All of these factors have combined to create unprecedented information needs.

Complex supply chains pose a risk to food quality and integrity because they include many touchpoints and material manipulations, each of which creates an opportunity for misunderstanding, misrepresentation, and adulteration. And the longer the supply chain, the more difficult it is to ensure that the information needed to maintain traceability and transparency is accurate and complete. When products move between nations, for example. different regulatory requirements and enforcement policies can result in critical documentation gaps.

Finding Fraud

Economic pressure on supply chain integrity occurs when prices fluctuate or when there are rapid changes in demand. Because production is often slow to respond to these changes, suppliers may be tempted to adulterate or misrepresent products to take advantage of market opportunities. Even when supply and demand are relatively stable, there are economic incentives for adulteration, such as when an ingredient can be replaced or diluted with a less expensive non-food-grade substitute or when a generic form of an ingredient can be substituted for a more valuable form (e.g., conventional produce labeled as organic).

Given these economic incentives and the many opportunities for things to go wrong in food supply chains, it is not surprising that fraud occurs. A report from the Grocery Manufacturers Association (GMA) estimated that various forms of fraud have a $10 billion to $15 billion negative impact on the industry each year. Recent data suggest that up to 25 percent of some high-value products, such as spices, are adulterated.

The results of the joint Interpol/Europol OPSON program indicate the widespread nature of the problem. Each year, this program carries out coordinated multinational operations for about four months. As shown in Table 1, products worth €150 million to over €200 million have been seized during these brief, yearly periods. Clearly, fraud and adulteration are significant ongoing and issues.

Even when fraud and adulteration are not problems, suppliers and manufacturers need to have a common understanding of the expected identity and purity of the ingredients they use. As with all commercial transactions involving physical goods, it is important that the parties involved agree on acceptable characteristics for the material involved. Just as there are standards that define measures for size and weight, composition standards can be used to describe the appropriate characteristics of food-grade ingredients.

Creating Common Understanding

The best way to define acceptable ingredient characteristics, minimize fraud, and facilitate information continuity is by establishing and using public ingredient standards. According to the GMA, “ingredient standards provide a solid basis for identifying and classifying raw materials.” Ingredient standards act as a dictionary to create a common vocabulary that facilitates clear and consistent communication. Because standards describe what a substance should be, including what it means for a substance to be food-grade, they can be used to determine when a sample of an ingredient is not what is expected. When this happens, it could be an indication of quality problems, adulteration, or other kinds of fraud.

Referring to a publicly available standard when manufacturing, testing, selling, or purchasing an ingredient creates a level playing field for everyone along the supply chain. Standards also play an important role in protecting transparency and traceability by fostering the use of consistent (or at least interchangeable) terminology through multiple transactions.