MCDONALD’S HAS decided to open its supply chain up to the public but is it a genuine attempt to be more transparent or a marketing stunt?
At a recent food safety conference in York, Sainsbury’s head of quality and supplier performance, Alec Kyriakides, referred to the horse meat scandal as “effing horrendous”, before adding: “And we didn’t even have any horse in our products”. The discovery of equine DNA in a range of beef products has rocked the food industry, but there are already signs that those with close control over the supply chains – and what’s in them – could stand to benefit.
Take McDonald’s, which has hinted that it can steal a march on its crisis-hit rivals, Burger King, where horse DNA was found in four product samples. Commenting on sales figures in April, its UK chief executive, Jill McDonald, said investment in its supply chain had “paid off” as she explained: “I wish that the horse meat scandal hadn’t happened. It’s not good for the industry or for customers. On the other hand, I don’t want to capitalise on misfortune but equally we have made investments in the supply chain for a very good reason.”
But that wasn’t the end of it. Last month McDonald’s announced a new initiative to reinforce the confidence it has in its procurement systems. The fast-food chain is looking for a dozen willing customers to become “quality scouts” who will go behind the scenes and report back on how some of its products are sourced and made. McDonald’s says the project is in response to “increased interest” from consumers in where the food they buy comes from. A Populus poll of 2,000 consumers in March and April this year found 81% of people said it was important that ingredients were traceable to the farm they came from.
Early indications suggest that consumers do indeed want to know more. McDonald’s head of communications, Cheryl Chung, told Footprint that hundreds of people have applied already, including customers, food industry experts and food critics. “We really hope to be challenged” by the new quality scouts, she says. “We want people to interrogate” our systems.
Some question whether enlisting customers to interrogate complex, multi- tiered supply chains is more gimmick than great idea. Amelia Boothman, the director of strategy at brand agency 1HQ, says the quality scouts are “the modern version” of the consumer watchdog Which?, but without the expertise. “Perhaps this might be best left to professionals [such as Which? experts] who know what they are looking at. If you can’t assess the reliability of the supply chain without expertise, that makes it a gimmick in my eyes,” she explains.
Deborah Cawood, the head of food chain at the National Farmers Union, has similar reservations. “Transparency to the consumer is vital, but it is important that the supply chain is checked by independent experts who have a detailed understanding of the issues.”
Though others relay similar scepticism, there is a general feeling that this is a step in the right direction. As Steve Bullock, the head of research at environmental data experts Trucost, puts it: “Consumers need to be part of this dialogue [on transparent food systems] and they need to be better- informed. But there also needs to be more foresight from companies – [change] is very much retrospective at the moment.”
While McDonald’s is “very confident” that it can withstand 12 sets of prying eyes and the interactive reports that will follow, others may not be. “There are so many businesses that don’t understand their supply chains and don’t have a Scooby-Doo where their materials come from,” claims Mark Driscoll, head of food at Forum for the Future. “Food companies are overly secretive when it comes to their supply chains, which makes any claim in relation to social responsibility difficult to justify.”
The natural fear for brands is that their intellectual property might be infringed by being so transparent. However, the potential goodwill that can be generated among customers, alongside the risk of negative press if a secret is uncovered, should outweigh that fear, says Dan Einzig at the specialist food and drink design agency Mystery. “Brands need to embrace the reality of how transparent their world now is – rather than hide,” he says. “They have an opportunity to be honest and ask for their customers’ help in the way that McDonald’s is doing with its quality scouts initiative.”
There are many – including its detractors – who feel McDonald’s deserves credit for being the first to put its neck on the line. Chung says it won’t be the last either. “I don’t think it would be any surprise” if other companies started similar initiatives, she says. “This industry has been shocked by the horse meat scandal, and quite rightly.”
The real test will be whether any renewed enthusiasm to open up to consumers stands the test of time. Prince Charles recently criticised the food system for its “aggressive search for cheaper food” that had “damaging costs to the environment and human health”. But won’t a more transparent and, in turn, more sustainable food system be expensive?
McDonald’s has been able to change without charging its customers any more for its products. Other companies caught up in the horse meat scandal have been talking about local sourcing, more checks on food safety and product integrity, and transparency in their chains, but they have also highlighted that customers need not pay more.
“While this sentiment is welcome, delivering change in supply and supply chains without implications for price will be a challenge,” says Justin Sherrard, the global strategist for renewable resources at Rabobank. However, the price of doing nothing or cutting corners, in a world whether every consumer is a critic thanks to social media, could be even more effing horrendous than horsegate.
Click Here for comment from Rabobank’s Justin Sherrard.
