What is traceability?
Traceability is the ability to share information about, and follow the movement of, a product through all or part of its supply chain, across the stages of production, processing and distribution.
Speaker:
Traceability is the ability to share information about and follow the movement of a product through all or part of its supply chain across the stages of production, processing and distribution. For more information about traceability, visit agriculture.vic.gov.au/traceability. Authorised by the Victorian Government, 1 Treasury Place, Melbourne.
Effective traceability can provide information about a product's journey from the farm to the end consumer. Traceability can also help with the recall of products where necessary. Globally, the requirement for improved traceability is being driven by a need to focus on:
- compliance and regulation
- building and establishing certain brands
- improving production efficiencies.
Traceability is not defined by a system or specific technology. Instead, we define traceability by its purpose and each user’s requirements for certain data at a point in the supply chain.
Six key drivers of traceability
Compliance and regulation
Food safety
Food safety regulations ensure that food is handled, prepared, transported and stored in ways that reduce the risk of illness from food borne disease.- Food safety compliance and regulation practices are in place to protect consumers and provide assurance of the correct production processes, controls and accreditations.
- Improved traceability in the food supply chain will help in a recall investigation with faster response times, reduce food waste and limited financial impact. Reputational damage to a business and industry sector will also be limited as the recall can be contained quickly.
Biosecurity
Biosecurity regulation is used to protect a nation from the introduction and spread of harmful viruses, bacteria or other microorganisms.- Biosecurity compliance and regulation practices are in place to minimise the risk of transmission to people, animals and plants.
- Digital traceability for biosecurity can provide a digital audit trail for each product which could be used to prove and investigate biosecurity status.
Market access
Market access is the freedom of a business or nation to sell goods into a specified foreign market.- Market access regulation and compliance include official trade restrictions (tariffs and quotas) and non-tariff measures (NTMs) for the importing country in additional to their food safety and biosecurity measures.
- Digital traceability for market access will reduce administrative burden and costs, potentially simplifying the often-onerous process.
Brand building
Provenance
- Food provenance means understanding where food has come from.
- Digital traceability can help quickly confirm where certain food was produced, manufactured and how it was transported.
- Enhanced traceability for the provenance of products will reduce food fraud, estimated to cost the global food industry between A$40 to $50 billion every year.
Certifications and product attributes
Certifications and product attributes refer to a quality or feature consumers value such as organic, fair trade and sustainable.- Certifications and product attributes are also known as credence values.
- Premium markets exist for brands who identify and respond to consumer demands for certain attributes.
- Digital traceability systems can provide a quick, easy way to confirm and interact with a brand’s story and product's journey.
Production improvement
Supply chain efficiency & quality
An efficient global supply chain can reduce costs, increase speed to market, support volume and safeguard the quality of goods, particularly perishable produce.- Digital traceability can use product and condition data to make appropriate storage, handling and logistics decisions. It can also lower incidence of spoilage or false claims of spoilage by importers.
- Effective digital traceability can help reduce regulatory costs to producers, minimise food waste and improve business forecasting and planning decisions.
What is a traceability system?
A traceability system refers to the way data is recorded and used to track a product one step forward and back along the supply chain. Information may be recorded manually, on paper, or automated through an electronic, digitalised system.
Traceability systems come in many forms and will vary depending on the needs of the business and its supply chain.
Why are traceability systems used in agriculture?
Traceability systems are often used in agricultural, or food and fibre, industries to meet government compliance and retailer requirements for:
- food safety
- biosecurity
- and market access.
Additional commercial benefits of using a traceability system may include:
- greater brand awareness
- helping consumers understand provenance and produce attributes
- and production improvements such as supply chain efficiency and quality.
When exporting produce, traceability systems can provide assurances for market access requirements in protocol markets. The impact of a traceability system is less effective in non-protocol markets but can help confirm the authenticity, quality and safety of Australian products.
Global trends and drivers for traceability
International governments and consumers are increasingly concerned about food safety and validating the truth behind claims such as ‘premium’ and ‘sustainable’ produce imported to, and consumed in, their countries.
Agriculture Victoria has identified six key traceability-related global trends and drivers for Victoria’s food and fibre sector.
Changing consumer demands and preferences
Globally, consumer demands are changing rapidly and there is an increasing expectation for food and fibre products to demonstrate alignment with preferences such as:
- higher animal welfare
- sustainability
- other production and supply chain characteristics.
Increasing import market regulation
Meeting import market regulation is important to maintain market share and mandatory measures being implemented by importing country governments are increasing. This is demonstrated by the number of annual notifications to the World Trade Organization (WTO) regarding proposed changes in sanitary or phytosanitary measures, which trebled between 1997 and 2017.
Responding to these measures in a timely and efficient manner is important to maintain market access and take advantage of the opportunities available in growing export markets.
Growing populations and middle class
Growing populations and a growing middle class in Asia are particularly relevant for Australian producers given the importance of Asian markets.
The impacts of these drivers are increased demand for products including a shift towards higher-value foods.
Australia is well-placed to take advantage of these trends given the focus on high-quality and high-value produce, along with proximity to Asia.
Increasing globalisation and competition
Australian industry is under pressure to improve productivity and gross margins as competition intensifies.
‘Brand Australia’ (notably Australia’s safe and premium reputation) holds a lot of weight with important export markets. However, Australia must compete with other countries with lower production costs and/or an equally strong brand.
Increasing biosecurity and food safety risks
A globalised economy has resulted in an increase in global trade of food.
With the increased volume of trade, incidences of foodborne diseases are becoming more common with international food trade disrupted by frequent disputes over food safety and quality requirements.
Maintaining biosecurity and food safety standards, and providing assurances to protect human, animal and plant health will continue to be important to both manage risk from imported products and ensure Australia’s exports meet import market requirements and preferences.
New, emerging and evolving technology
Technology provides opportunities to industry and tools for consumers and others in the supply chain. Evolving technology is also driving higher expectations of industry and government for transparent, accurate, appropriate and timely information.
These technologies can be integrated into business management systems for enhanced traceability to help increase productivity and amongst other things, reduce food waste, food fraud and improve food safety and biosecurity assurances.