New Study: Impacts of Traceability on Business Performance

Traceability systems are becoming increasingly comprehensive within the seafood industry, causing many firms to wonder how traceability improvements might affect the performance of their businesses. The Global Food Traceability Center (GFTC) sought to answer these questions and conducted a year-long survey to evaluate business performance related to traceability systems along the entire seafood supply chain.

The project had two main components. First, the team conducted interviews with individuals working in 48 different businesses within nine global supply chains. Second, the team evaluated whether traceability played a role in consumer perceptions and purchasing habits by looking at seafood purchasing trends in markets across Canada, China, Germany, The Netherlands, and the United States.

To assist businesses in identifying the potential benefits of their traceability system, the team developed an online software tool that calculates the return on investment of the platform. The tool allowed the firms surveyed to evaluate various attributes of their traceability systems and is currently available to the public.

Results showed:

• Traceability systems that have been used to monitor operations on a larger scale, such as identifying inefficient practices, have been positive for business performance and competitiveness.
• Companies that collaborate with suppliers and consumers tend to value traceability much more than firms with less cooperative cultures.
• Among firms that initially approached traceability with hesitancy, 75% changed their opinion from a negative to positive view after system implementation.
• Smaller businesses tend to see the benefits of traceability systems faster than larger firms.

Though traditional benefits of traceability were limited to food safety procedures, modern traceability systems can be used to take firms beyond regulation compliance and improve production, inventory, marketing, procurement, and public relations. Other benefits of incorporating a strategic perspective of traceability systems include:

• Greater confidence in decision-making
• Decreasing waste
• Reducing working capital by managing inventory more efficiently
• Authenticating sustainability and source claims
• Increased competitive advantage by identifying and accessing new markets
• Improved demonstration of accountability for high quality seafood

While overall the study highlighted the benefits of traceability systems, it also revealed some common challenges, such as cost, the lack of harmonized standards, and difficulty implementing interoperability between systems.

The study of consumer perceptions found that customers were primarily concerned with freshness of seafood products but they did also value the verification of seafood sustainability. While transparency remains an important factor for consumers, using traceability to verify sustainable seafood is a market opportunity for retailers.

For more information, please visit GFTC’s website for the Executive Summary and full report. To learn more about traceability, visit the FishWise Traceability Resource page.