In today’s consumer-driven environment, businesses are sparing no expense to protect their brand’s identity, experience, and perception. However, good-natured missteps and inaccuracies could be undermining the very foundation of these efforts – the most recent common example of this being food fraud.
Below, we’re exploring what food fraud is, examples of food fraud, and mitigation strategies to begin implementing in your business and manufacturing strategy today.
What is Food Fraud?
Food fraud occurs when there is dishonesty in claims made within a business’ branding or marketing strategy. It can occur due to discrepancies or wrongful claims made on the label, marketing assets, or any element of the customer-facing sales process. It’s becoming an increasingly slippery slope to navigate, especially as claims have evolved to be so diverse and all-inclusive.
Below are some common examples and risks that could lead to instances of food fraud:
Common examples of food fraud
As a quickly developing business, you’re likely well aware of claims that you can and can’t be making. However, with increasing numbers of certifications, registrations, and food business claims, it can be especially easy to make a misstep. Identifying common examples of food fraud is a great first step to developing your risk mitigation strategy.
Dilution is commonly seen with liquid products, such as oils or mixtures of any marketable type. It can be used to mix two compounds together, or to save on costs by combining the actual product with a less expensive alternative that wouldn’t be immediately recognizable to the customer.
Direct examples of swaps identified and reported by the Food and Drug Administration (FDA) include:
- Olive oil: While the industry standard is extra-virgin olive oil, companies may opt to mix the expensive, pure form with a less expensive or lower quality olive oil.
- Honey, maple syrup, or sweeteners: While these syrups can be found in their pure form, companies may choose to mix the pure form of the product with sweetener alternatives to save on cost and logistical labor, including sugar beet syrup or corn syrup.
- Juices and drinks: Often, these products have percentages of pure, unadulterated product in the suspension or blend. You’ll see these marketed as a percentage of juice or juice from concentrate. The risk presents itself when one of three incidents occur:
- The concentration is marketed incorrectly, making the juice appear more or less dense than it actually is, or
- Sweeteners or dilutions are added to the juice mixture to further cut on costs and labor associated with the original production, or
- Old juice is mixed into new juice batches to minimize food wastage – while putting the customer at risk with consumption
These are not the only instances of food fraud, unfortunately. Other foods that are frequently abused are nuts, infant formulas, seafood, and meats.
What are the consequences of food fraud?
On the surface, food fraud could appear to be “low risk.” In fact, it may even seem savvy or strategic, as corporations save in both the long and short term. However, consequences associated with food fraud can be grave – even deadly depending on the nature of the compromisation.
Consequence: Illness or bodily harm
Certifications and regulations are in place for a reason: to keep consumers as safe as possible with the consumption of food. When dilutions or compromisations of the food occur, consumers can be sick or experience a higher range of vulnerability than they otherwise would.
Consequence: Ethical dilemmas and concerns
Regardless of the amount of risk that actually manifests into problems later on in the batch lifecycle, there is the persistent ethical dilemma that dilution and food fraud presents. It is not right, objectively, to market something as one thing or in its pure form if it isn’t the case.
Consequence: Lasting brand damage
Scandals and stories about dishonesty and fraud can last for quite some time – especially in the age of social media. Whether food fraud occurs deliberately or inadvertently, it can have lasting brand damage that follows both team members and brands across the industry.
How to mitigate risks of food fraud
Food fraud is a major risk to the global food industry. According to the FDA, it is estimated to cost the industry as much as $40 billion dollars per year in lost earnings – and that number is only projected to rise as the global scale of food demand increases. However, there are ways to manage the risks of food fraud – centering around standardization and organization-aligned marketing initiatives.
The first step in finding alignment and food fraud risk management is to seek standardization. A cloud-based ERP is a great starting point, as it allows you to obtain full visibility into your production, distribution, and customer-facing processes. You’ll also be able to maintain the reactionary speed and agility to respond to any risk of compromisation, preserving brand identity.
Considering how a cloud-based ERP fits into your food business strategy? Connect with the team at Inecta today. Our specialists are here to curate a specialized support plan to help build, scale, and protect your business. For more information and to get started today, please visit our website.