The world’s food industry is changing. Supply chain partners are now required to understand and support supply chain transparency, data sharing, collaboration and food safety.
Chains of Brazilian supermarkets and industry associations have been working together in order to boost the FLV category and, at the same time, comply with the legal requirements of the Brazilian government, going hand in hand with the international markets.
Brazil’s industry of fruits and vegetables (“FLV”, as mentioned in Brazil) is sizeable. According to data from the Brazilian Association of Supermarkets (“ABRAS”), in 2016, FLV grossed 348.8 billion reais, while the industry represented, on average, 9.7% of the sales, that is, an amount of 29.1 billion reais (http://abras.com.br/rama/indicadores/).
There are company-specific private tracking programs and programs shared with associations representing the sector. Such movement is not new, whose forerunner, in the ‘90s, was Grupo Carrefour, with its Guarantee of Origin Program. In 2009, Grupo Pão de Açúcar presented the Quality from the Source Program. Besides, also during that period, Walmart launched the Selected Quality/Guaranteed Origin Program. In 2012, the Brazilian Association of Supermarkets (ABRAS), along with its State Associations and industry partners, launched the Food Traceability and Monitoring Program, RAMA, based on the pillars of collaborative tracking, pesticide residue monitoring, collective coverage of results, and a rectification policy to monitor noncompliance and adherence to good agricultural practices. RAMA Program represents an equal reference action of the retail chain, its suppliers and producers and fosters adherence to international standards, in this case, in partnership with GS1 Brasil, in order to assure the structured communication regarding the information of the path and the quality of the food traded among the parties. We note that the sector has been expanding, evaluating, and validating methodologies for about five years, thus gaining trust and experience to indicate the alternatives that fit best the Country’s outlook.
There is opportunity to standardize tracking in Brazil
This environment, which is an early coordination of the FLV chain, triggers another interesting demand that relies on tracking criteria: certification. Producers and distributors have become sensitive to the need to document and sort their processes by applying third party certification as an official validation of recognition. In Brazil, a few companies are certified. According to official data from GlobalG.A.P., there are approximately 1,100 companies. When we compare the Country to countries such as Peru, Chile and Equator, we have less than a half of certificates that they have.
100% traceability across the industry will be accomplished much easier and with greater success if the industry agrees on a single standard for the information required to be tracked and shared during a trace-back.
Rather than just a business requirement, tracking can lead to more effective business management
A simple, financial low-impact fashion to organize and inform the chain in an integrated manner is the adherence to tracking.
Also according to data from ABRAS (Balance of RAMA Program, 2017), the coverage of the tracked products by the retail participants (totaling 44 supermarkets) is 20.5%. In 2017, the total tracked volume was 1.22 million tons. The target by 2020 is to achieve coverage of 30% of the volume in the associated retail markets.
Tracking must be construed as means rather than the final objective of the entire operation. The structured performance of the controls for tracking allows the supplier to disclose their processes and products to whoever they want to and, if this client/connection cooperates with the continuity of the information registration, such disclosure extends to other phases of the production chain.
Adherence to traceability worldwide for the perishable food chain has begun as an obligation, as required by the law or business demand. Yet, companies adhering to internal controls of the processes have realized the benefit of the structured information and now they have basic indicators about their business. “There is no tracking without management. And there is no management without control.” The relation among such concepts and practices is inherent. We must have documented control of processes so that we can apply a tracking system and, subsequently, strategic, tactical, and operational management of the business.
In Brazil, the chronological sequence for adherence to traceability has followed the legal requirement related to food safety, particularly for pesticide residues associated with processes applied to the retail market, a mandatory business position. More recently, specific laws have refined the requirement, for instance, Collegial Board of Governors’ Resolution (“RDC”) # 24, issued by the Brazilian Health Surveillance Agency (“ANVISA”), which requires recall within forty-eight hours for perishable food. The Brazilian Consumer Protection Code is one of the world’s most evolved codes. Nowadays, to share information of the origin of the products where they are traded is mandatory.
We estimate that, within a normal curve of adherence to the technology, there are around 30% of producers and distributors engaged in the supply of supermarkets, which have decided indeed, after all tracking-related movements, to define such theme as a strategic one.
Challenges to track the product
All product is tracked, very little product is traced. It is imperative that tracking systems are implemented properly and account for 100% of all product in order to accurately conduct a trace-back of product. To implement a tracking system is an easy task that can be planned in an evolving model for each stage and maturity of the company. As any adherence to a new process, the entire organization, especially the top management, must be involved. The challenges to implement a tracking system may be divided into three different natures:
1. Technical Challenges,
2. Training Challenges and
3. Priority Challenges.
The Technical Challenge is directly related to the availability of a data telecommunication infrastructure in the locations where the products are tracked, collected, processed, or packed. Many locations, particularly manufacturing properties, still lack internet access or even a telephone line for data transmission. In general, the systems may be used offline, however, at any moment, transmitting the information in order to share it with the colleagues of the chain will be required.
The second challenge is Training. Many properties or participants of the supply chain have technical infrastructure available to access a tracking system in real time, yet, they do not count, inside their operating team, on dedicated and/or trained personnel to operate the system and make the launches accordingly, which may result in loss of information, incomplete and potentially wrong information, thus affecting the process and the credibility of the company itself or the producer taking part in the process.
Finally, the Priority Challenge is up to this moment the challenge that poses the most complex obstacle. With respect to coverage of supply, several producers and distributors do not recognize the benefit of the controls related to tracking. In Brazil, we estimate that there are 3.5 million manufacturing units with FLV activities. Considering the national programs and their suppliers, the coverage must represent around 1% of the entire production base. The challenge is to widen it to be significant.
In the future, tracking will be very soon part of a set of processes performed to guarantee the strategic management of the business. It will no longer be the end activity, as it still is, but the support activity for companies to control and monitor their performance indicators.
What is Traceability?
Definition in Portuguese: TRACKING, singular, derives from the verb to track. Transitive and intransitive verb – to crawl; to trace; to calculate roughly.
However, in practical terms, traceability is to know “what” (the product), “from where” (origin), “to where” (destination), and “how” (process). This idea defines the fundamental requirements to track any product.
By Giampaolo Buso, Vice-Chairperson of the Committee of PMA in Brazil