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Supply Chain Integrity: Who Will Pay?

The United States has long enjoyed a reputation for a safe foodway. However, recent scares—particularly Chinese melamine contamination—have highlighted the complications of an ever-lengthening global supply chain. “The world,” as one audience member observed during a recent Flavor and Extract Manufacturers Association panel, “has become the US’s supplier.”

Don Finch (vice president of sales, Cargill Flavor Systems) agreed, noting the result: “decreasing control over supply chain.”

During the same session, Craig Henry (senior vice president and COO for scientific and regulatory affairs, Grocery Manufacturers Association) highlighted just how complicated the situation has gotten. Henry pointed to the all-American hamburger, noting that this culinary icon typically is composed of up to 26 sources. In this context, supply chain integrity is no small feat. Yet the need to deliver on safety is more urgent than ever.

Henry cited a recent drop in consumer confidence in food safety, falling from 82% in 2006 to 66% in 2007. Meanwhile, a 2007 Consumer Reports survey reported that 92% of Americans want the country of manufacturing origin listed on all foods.

Who’s Going to Pay for This?

The pressure to lower costs is a bigger problem than ever, which makes the flavor industry extremely wary of increased costs resulting from expanded supply chain integrity costs. A “trickle-down” effect, as one attendee termed it, just won’t do. Costs must be shared among suppliers, manufacturers and consumers.

“Unfortunately,” said Henry, “I think we are in a new era. I think there’re costs associated with it … There’s concern that there are numerous small mom-and-pop operations abroad that cannot participate now in global trade and will be out of business.”

Simultaneously, there seemed to be a general feeling that consumers must be more educated on actual health risks and the costs incurred by increased supply chain scrutiny. An avid chocolate fan and lab specialist, Matthew Breeze (Covance Laboratories) is well aware that he is exposed to cadmium and lead. “You really don’t want to know what you’re exposed to on a daily basis,” he joked. “People [consumers] have to have realistic expectations about what they’re exposed to. A lot of it’s going to be education.”

Henry concurred. As industry analytics get ever closer in the chase for 0, he said, “We have to get ahead of the game in asking the right questions up front, not about how low can we go, but how low should we go?"

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