UTZ CERTIFIED is one of the largest sustainability programs for coffee, cocoa, and tea in the world: one-third of all coffee that is sustainably traded worldwide is certified by UTZ. This sustainability program offers traceability by means of a web based Track and Trace system in combination with independently checked Chain of Custody requirements. Where the Track and Trace system monitors the whereabouts of a product throughout the supply chain, the Chain of Custody requirements regulate the handling of certified and non-certified products at every stage. Together, the Track and Trace system and Chain of Custody requirements offer credible transparency and guarantee the product is handled correctly at all times. So how does that work exactly? And why is that so important?
Strong consumer demand for sustainable products is driving the introduction and expansion of a fast growing market segment: sustainably and responsibly produced and sourced products. The attractiveness of sustainable products gives market players a competitive benefit and last but not least, it leads to better margins throughout the supply chain. With this increasing interest unsustainably produced products, it is crucial for manufacturers and retailers to be able to show the exact origin of their product and thus proving their corporate social responsibility.
The increase in certified products has led to a new industry with various service providers essential for creating a sustainable agricultural supply chain. How can we monitor these service providers and can we be sure the product we buy is actually made from sustainable ingredients? Right: traceability.
What Is the Objective of Traceability?
All players in the food chain want to demonstrate their commitment to food quality and safety, and assure the reliability of their suppliers. A food-chain traceability standard helps map and document a product’s history, creating trust and confidence toward consumers. The key is to combine a traceability system with Chain of Custody requirements. Chain of Custody requirements prevent or regulate the mixing of certified and non-certified product at every single supply-chain actor, ensuring that the certified product leaving the company is the same certified product that entered the company. It’s the rigor of that system that brings transparency to the market.
A traceability system not only creates transparency in the supply chain, but also allows for more effective program management by: creating availability (and thus enabling communication) of performance data; providing the basis for a volume based payment system; and preventing double claims by centralizing and automatically checking user information and market claims.
Without a central traceability system, it can be a struggle to measure how much certified product is sold and, therefore, it will compromise the credibility of the system. Some systems resort to tracking certified hectares or other proxies of traded volume, but their real volumes (and therefore market penetration) remain elusive. This makes communication of progress more difficult, both to (prospective) users and to financial partners. Going beyond traded volumes, a traceability system enables the aggregation and reporting of other important information, such as the premium paid for certified products, expected certified production volumes and impact information at both large estate and smallholder level, and the control against overselling and double claiming. Today, the new generation is requesting more information about anything and everything in their food products. This means that the food industry is having to figure out the content consumers desire to know and how to provide it. What is clear is that this information can only be available with a traceability system that covers the entire supply chain. Companies are asking their suppliers to give them insights into their efforts towards environmental sustainability of their economic activity. This requires traceability systems frameworks to be designed in such a way that is easy, efficient for the entire supply chain and flexible in terms of the attributes it traces as well as safe and secure, so that participants can control well enough what information they want to share with whom. Companies most often establish traceability in order to achieve one or more of the following objectives: to improve supply-side management; to differentiate and market foods with subtle or undetectable quality attributes; and to facilitate tracing back for food safety and quality. Moreover, traceability can be a powerful tool for the inclusion and empowerment of small producers if the system provides them with relevant market information and opportunities. Until recently, traceability was mainly used by companies for supply chain optimization. It was a way to reduce costs or manage risks, to speed up delivery or trace bad shipments. However, we now see a shift where sustainability is becoming a driving force for supply chain traceability. Issues like global warming, water footprint, impact on natural resources and food security have become important issues in today’s corporate reality. Traceability can be used to make supply chains more transparent, to identify possible weak spots and to work on further improvements.
Traceability assures consumers that their product truly relates to certified sustainable sources, by providing transparency for the entire supply chain. This in turn strengthens credibility for buyers and sellers, making it possible for all parties to negotiate fair prices for sustainable goods. At the same time, traceability allows producers to track farm development, increase production efficiency, lower costs, and gain access to new markets.
Juliette Caulkins joined UTZ CERTIFIED in 2007 as commercial director. With her experience as a business entrepreneur, she has contributed to the success of UTZ CERTIFIED’s coffee program and is now leading the organization forward as it expands its certification and traceability expertise into other commodities.