Presentation on theme: "What is the value proposition of food integrity programs to individual organisations? Des Bowler Management for Technology www.initmedia.com.au 11 th May."— Presentation transcript:
What is the value proposition of food integrity programs to individual organisations? Des Bowler Management for Technology 11 th May 2011
What are the drivers for food integrity programs? Regulatory compliance – “I must do it and everyone else must do it, so we have a level playing field”. Eg NLIS for cattle Market demand - “If I want to be in that market I must do as the customer demands”. Eg EU cattle compliance Product differentiation – “How much more market share or how much more will I get for my product if I have additional systems in place?” eg BRC Global Standards Product differentiation – “How much more market share or how much more will I get for my product if I have additional systems in place?” eg BRC Global Standards
Consumer behaviour Majority of consumers are price and convenience driven. A small percentage are influenced by marketing. A very small, but growing, percentage are emotively driven by such factors as sustainability, traceability, organic, humanely produced, nutritional value. These emotive buyers will pay more for products.
What are the cost benefits for food integrity programs? How much more market share or increased sale price can I get with the additional food integrity programs? Is there a integrity mark I can use? Am I in a market that is ruled by price, so I can’t get more market share or price increase? For every dollar I spend on additional food integrity programs, how much will I get back? $1= $1 (neural cost), $1= $1 (neural cost), $1 = $.05 (increased cost), $1 = $.05 (increased cost), $1= $1.5 (increased profit) $1= $1.5 (increased profit)
Cost benefit balance? For each product and market what is the cost benefit balance? If a food safety incident occurs that balance can rapidly shift, but will return to the original position over time.
What are the risks for additional food integrity programs? Who can use the product integrity program information? Can the consumer, the distributor, the importer, the regulator or just me? Could this information be used against me if something goes wrong? Eg a distributor does a substitution with my product and then a regulator does a check and finds a problem with the product? What happens then? Who will get the blame?
What is the take home message? Each organisation must determine the cost benefit of additional product integrity programs on a product and market basis. Also consider the cost benefit may change very quickly if there is a product integrity scare in the market. You must have suitable safe guards to ensure that product integrity information is accurate and can not inappropriately used against you.