Over thepast decade, we have witnessed an increased focus on health and sustainability across the food industry. However, along with it has come the corrupt practice of Greenwashing (making unsubstantiated or misleading claims about environmental benefits or practices). Consumers know this, and as a result, now not only demand better practices, but better verification and provable trustworthiness.
Once we enter the post-COVID-19 era, it’s expected that consumer trust in a brand’s positive societal impact will become even more important. 80% of consumers already report that being able to trust a brand to do what’s right is important in their buying decision. This growing need for trust presents an opportunity in the market – those who manage to build trust will be rewarded by consumers in brand loyalty and customer acquisition.
So how can food businesses go about regaining consumer trust?
According to research, transparency has a direct impact on consumer trust. Additional research has shown us that transparency has a direct positive influence on green perceived value (GPV). GPV also influences brand loyalty positively. In other words, companies that invest in being transparent will reap the benefits in the strength of their brands. Furthermore, consumers in certain segments are willing to pay more at the grocery store for these transparent brands. In conclusion, transparency brings value!
Transparency can be defined on different levels. At its base, transparency means providing information on the ingredients of products. Brands should, therefore, clearly state what ingredients their products contain. Secondly, transparent brands provide details on the nutritional information of their products. This allows consumers to monitor their daily intake and improve their lifestyles. Thirdly, being a transparent brand, means giving information on how products are produced and sourced. This is where the opportunity lies – since most brands already provide some version of the first and second levels, brands who also give info on the source gain the advantage.
However, this layer also presents the highest challenge, since it involves the entire value chain. Although technologies that can link the value chain are emerging, the lack of trust between players is often one of the biggest obstacles, and implementation has remained illusive.
Since consumers increasingly value transparency and have a higher willingness-to-pay for more information, one solution to the aforementioned lack of trust is to distribute any added value throughout the value chain. From that point onwards, brands can choose a two-way approach. In the ex-ante quality assurance approach, quality and certification are measured at the time of sourcing or production. In the ex-post traceability approach, digitization of supply chain records makes it possible to quickly recall products in the event of a health issue. Research shows that the willingness-to-pay for ex-ante information is higher. In other words, brands with digitization are at a monetary advantage.
So what can digitization bring your brand?
Of course, many brands already have some form of quality assurance incorporated. But paper trails often seem endless. Documents and certificates are manually checked at several points in the supply chain and need to be sent back and forth while databases are processed manually. This process often takes months.
Once quality assurance is digitized and automated, this process can be shortened to minutes. After that, quality assurance can be backed up with a verifiably quality process, and transparency can be brought to its full potential. This transparency can then be shared with consumers and will form the basis for increased brand trust and added value. Any food company that does that will be well on their way to fully regaining consumer trust!
Edelman Trust Barometer Special Report (2019)
The transparency imperative product labeling from the consumer perspective (2018)
J. Lin, A. Lobo & C. Leckie (2017), The role of benefits and transparency in shaping consumers’ green perceived value, self-brand connection and brand loyalty, Journal of Retailing and Consumer Services 35 (2017), p.133-141.
B. Hou et. al (2019), Consumers’ Willingness to Pay for Foods with Traceability Information: Ex-Ante Quality Assurance or Ex-Post Traceability?, Sustainability 11 (2019)