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Food and Consumer Product Fraud: Prevention and Mitigation »

April 18, 2018

By Brian Bedard, Executive Director, GMA Science & Education Foundation

Wood pulp in shredded Parmesan cheese.  Melamine in baby formula and pet food. Asian catfish sold as grouper.  Pomegranate juice cut with grape juice.  Honey diluted with beet sugar syrup. These are just some of the cases of product fraud involving food or beverage products that have occurred in the U.S. market in recent years.

In today’s global marketplace, there are inherent risks to the integrity of the supply chain and the authenticity of its food and consumer products. Some estimate that food fraud, or economically motivated adulteration (EMA) as it is also known, costs the world economy $49 billion annually and it has been estimated that about 10 percent of the food we purchase is likely adulterated. In addition to the public health risks, the impact on any one particular company can range from minor economic damage to financial ruin.  The growing complexity of the global supply chain has only made it more difficult for companies in our industry to prevent product fraud.

The issue of product fraud recently took center stage during a session at the GMA Science Forum in late March in Washington, DC.  The session built on a 2010 consumer product fraud report,

Consumer Product Fraud: Deterrence and Detection, released by ATKearney with the support of GMA and the GMA Science and Education Foundation (SEF).  It explored the evolving scope of issues and approaches to better understand, assess and prevent product fraud.  The session provided attendees with a look at the experiences and lessons learned by herbal supplement and pharmaceutical manufacturers on how best to prevent and mitigate product fraud.  The session also included an update on research at Michigan State University (MSU) supported by GMA and the SEF that attempts to more clearly define product fraud and address the growing confusion around this terminology so that companies can be better aligned in their efforts to attack the problem.

Dr. Holly Johnson of the American Herbal Products Association set the scene with some historical perspective.  She noted that product fraud was not a new phenomenon. She cited a report from 1853 which found that Prussian blue was often grounded and mixed with gypsum and then blended with Himalayan tea to ensure it presented the perfect green color that the tea drinkers of England expected at that time.

Dr. Johnson noted that the herbal sector today must contend with fraud cases involving the substitution and drug spiking of herbal remedies for male enhancement (laced with sildenafil), weight loss (laced with diuretics, laxatives) and athletic performance (laced with steroids). She stressed that enforceable FDA regulations supported by standards and specifications associated with the U.S. Pharmacopeia (USP), state-of-the-art industry testing methods and industry-wide transparency efforts have all been critical steps in preventing adulterated herbal products from reaching the marketplace.

Dr. Shabbir J. Safdar, Executive Director of the Partnership for Safe Medicines, highlighted past cases associated with heparin, cancer medications and, more recently, counterfeit pills laced with fentanyl.  Dr. Safdar said that industry collaboration has been a key component in addressing drug counterfeiting followed closely by stringent internal enforcement practices.

One of the first steps pharmaceutical companies took to combat the issue was to put in place personnel whose sole focus was on protecting brand security.  This led to closer collaboration with law enforcement agencies accompanied by more stringent internal investigations and robust monitoring of supply chains.  One such successful collaboration has been the Rx360 program of industry wide audits based on shared voluntary standards and a recognized compliance seal.

Safdar also said that international industry collaboration played an important part in efforts to combat counterfeiting.  Those collaborations included work with groups such as the International Anti-Counterfeiting Coalition Inc., (IACC), the Pharmaceutical Cargo Security Coalition and the Pharmaceutical Security Institute.

Dr. John Spink from Michigan State University focused his discussion on food fraud and highlighted the preliminary results of joint research based on a global survey of food fraud terminology conducted by MSU, GMA and SEF.  While there was consensus among respondents in identifying food fraud as a food safety issue with 86% supporting that categorization, the research suggests that there is a lack of consensus within industry on the proper terminology to use for describing food fraud.

Of the terms included to represent “intentional deception for economic gain,” 50% preferred the use of “food fraud,” 15% sided with “economically motivated adulteration,” 9% selected “EMA,” 7% chose “food protection,” 5% preferred “food integrity,” 5% chose “food authenticity,” and 2% liked “food crime.”

Dr. Spink noted that the survey highlighted the confusion in food fraud-related terminology and how the potential overlap in definitions could impede industry efforts to address the issue.  He further stressed that given the current scope of food fraud in the global food marketplace, there is an urgent need to clarify definitions and terms that can collectively be used by companies to address food fraud on a global scale. CODEX is currently reviewing the definitions of food fraud in considerable detail and this work is expected to inform current efforts to achieve better consensus on the terminology around this issue.

The session provided attendees with some important insights and lessons learned on addressing product fraud.  The GMA and SEF are currently updating the ATKearney report to clarify the current scope of this issue and provide industry with guidance on how best to prevent and mitigate it going forward.  The updated report should be released by June.

 



When Observation Becomes Innovation: Lessons for the CPG Industry »

January 31, 2018

By Shannon Cooksey, Vice President, GMA Science and Regulatory Affairs

The seismic shift of consumer preferences paired with the evolution of science, has brought innovation to the forefront of the Consumer Packaged Goods (CPG) industry. As the rate of exchange of information increases, it has become both an opportunity and necessity for CPG companies to explore new science, ideas and perspectives.

The CPG industry is not alone in facing major disruption in the marketplace. By observing how other industries have adapted or innovated the way they do business, CPG professionals can gain valuable insight and solutions to tackle the challenges they face today.

Grant Imahara, roboticist, animatronics engineer and modelmaker for some of Hollywood’s biggest box office hits, is a speaker at the upcoming GMA Science Forum, which is March 26-29. He will offer his perspective on innovation in the film industry. In advance of his appearance, Imahara responded to several questions –   and reveals the most memorable myth he debunked during his role on Discovery Channel’s hit show Mythbusters:

  1. You have worked as an animatronics engineer on many major motion pictures including Star Wars. How have you seen technology change the film industry and how do you see these changes translating to the CPG industry?

Imahara: In the mid-1990s, the visual effects industry experienced a quantum shift with the advancements in computer graphics. Suddenly, traditional ways of thinking and doing things were no longer preferred. As professionals, we had to adapt to new techniques to remain competitive. Adapt or become obsolete.

  1. The GMA Science Forum event brings the CPG science community together to discuss emerging science and innovation. Where do you find inspiration for your next innovation?

Imahara: Generally speaking, my inspiration usually comes from the world around me. Wherever I go, I look at the way things are made and how they work. I store this as a kind of “solution database” that constantly processes in the background. And when I need a stroke of inspiration, I search my database for something that I’ve seen that could be applied. In this way, the design for a robot’s arm could come from a bird’s wing or a funky latch I saw somewhere in my travels. I guess you could say inspiration is all around us!

  1. What was your most memorable food myth “busted” on Mythbusters?

Imahara: Hot Chile Cures. We tried all kinds of solutions including water, beer, tequila, vaseline, wasabi, and toothpaste – in the end, nothing was better than milk!

There is knowledge to be gained from those who have innovated and adapted to seize a new future. To hear more from Grant Imahara, join me at GMA’s 2018 Science Forum in Washington, D.C. – Register here today!



New Roadmaps for Navigating Disruption in Supply Chain, IT »

January 30, 2018

By Jim Flannery, Executive Vice President, Operations and Industry Collaboration

CPG companies enter 2018 contending with forces such as changing consumer needs, a new retail landscape that includes e-commerce, and new cost pressures. These hurdles are impacting every aspect of CPG company operations, including IT and supply chain. But along with these challenges also comes opportunity – and a chance for CPG companies to evolve alongside the rapidly changing digital landscape and harness new technologies and trends to foster growth.

Two timely new BCG reports commissioned by the Grocery Manufacturers Association (GMA) address how IT and supply chain leaders can navigate ongoing disruption pressures to help their CPG organizations emerge in stronger positions. The reports are based on industry surveys and related research, and can provide guidance for GMA member companies.

Looking first at the IT side, it’s evident that chief information officers face daunting balancing acts today. They are being asked to drive digital innovation to support their companies. However, instead of being provided with more resources for this endeavor, CIOs face increased budget constraints. The BCG/GMA benchmarking survey, called Accelerating Digital Innovation in CPG,” found that CPG companies have succeeded in reducing IT costs, but haven’t made nearly as much headway in prioritizing IT innovation.

BCG characterized CPG companies’ levels of IT innovation along a range that moves from “deliberators” at the low end, to “leaders” at the high end. Companies can use BCG’s definitions to help benchmark their own progress. Leaders show the highest IT spending as a percentage of revenue, pay more in compensation, work on more key digital transformation priorities, make better use of analytics, and are better at accelerating innovation internally.

However, what defines leadership is typically a moving target, as evidenced by the technologies companies have embraced over time. Not long ago companies were considered leading edge if they made some use of software as a service (SaaS) platforms and the cloud. Today, the report stated, these practices are increasingly the norm. Requiring more focus from CPGs today is the practice of agile development, the report added. Agile development has come to be associated with technology leaders such as Amazon, Google and Netflix. This highly collaborative form of development includes close working relationships between product owners and software teams to enable strategy shifts in real time.

The report found that the majority of CPG companies use agile development for less than one third of projects, and only half of companies plan to increase its use.  As a result, the report urged more focus on agile development with this pointed warning: “In five years, a CPG company that isn’t using agile for most of its development projects will likely find it difficult to be competitive in terms of digital technology.”

Turning to the supply chain side, a new BCG/GMA benchmarking study found some good news in the form of improved service levels — in areas such as case fill rates and average on-time delivery.

However, in exploring the biggest supply chain disruptors, the report, called “How CPG Supply Chains are Preparing for Seismic Change,” found that retail “channel proliferation is the greatest impediment to on-time delivery performance.” This is particularly true when CPGs serve the emerging crop of smaller format retailers, especially online retailers, versus their traditional larger-format customer base that includes grocery, club and mass. This is because CPGs have longer and more collaborative working relationships in place with the bigger format retailers. However, those mainstream retail customers are under more pressure, and are ramping up on-time delivery requirements with new financial penalties for falling short.

The report urged specific actions for CPG company supply chain operations to satisfy both increased customer needs and their own business requirements. These include seeking new efficiencies; bolstering their ability to hire and retain employees with analytical skills; gearing up for e-commerce; making better use of big data and digital tools; and improving collaborative relationships with customers, especially when it comes to alternative and e-commerce channels.

While IT and supply chain are different business functions, they face many of the same CPG industry challenges and can each benefit from taking new approaches to technology and other strategies. These reports are useful guides for companies to build their game plans in 2018 and beyond. The reports can be downloaded at these links: Accelerating Digital Innovation in CPG and How CPG Supply Chains are Preparing for Seismic Change.



Food and Agriculture Trade in the Asia Pacific – Facilitating Trade and Driving Growth »

November 15, 2017

By: Melissa San Miguel- Senior Director, Global Strategies-Multilateral Affairs

Each November, the leaders of 21 of the world’s fastest-growing economies from both sides of the Pacific gather at the Asia Pacific Economic Cooperation (APEC) Annual Leaders Meeting to set the agenda for trade and growth in the region. Fair trade in the Asia-Pacific region is a key priority for our industry, where exports help drive growth and support our 2.1 million jobs here at home. That’s why we at GMA are delighted that President Trump has identified removing non-tariff barriers to food trade as a high priority for APEC going forward (White House fact sheet).

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3 Ways CIOs Can Lead A Transformation In Grocery Manufacturing »

November 8, 2017

This piece originally ran on CMO.com

By: Matthew Campbell & Evan Kelly Managing Director; Director, Consumer Goods & Services-Accenture

Remember how straightforward the groceries business used to be? Manufacturers navigated a well-trodden path of monitoring supply-side size and scale, distributing inventory as widely and inexpensively as possible, and watching the profits flow in. It was a simpler time of mass-produced products distributed through a limited number of channels.

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Watching a Good Idea on Streamlined Product Code Date Labels Become a Reality »

September 20, 2017

By: Jim Flannery, Senior Executive Vice President, GMA and Mark Baum, Senior Vice President of Industry Relations, FMI

There is an undeniable satisfaction that comes with seeing a really good idea move from the realm of the imagined and into the concrete world of reality.  The grocery industry’s Product Code Date Labeling initiative – with its goal of helping consumers better understand and use produce date labels – is beginning to elicit that glow of gratification. 

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