Managing Director at Portera Technologies, your thinking partner in technology and innovation.
A lack of transparency about the manufacturing process of a product is increasingly on consumers’ minds. A recent survey from BCG revealed that, since the pandemic crisis, consumers’ agendas have increased and are more focused than ever on health and safety and showing strong support for the businesses in their local communities.
Eighty-six percent of Dutch consumers suspect brands of abuses in the production process, such as deception and poor working conditions, according to a Dynata survey (appointed by my company) of 1,000 Dutch consumers. Concerns have also arisen about hygiene and compliance with the corona measures resulting from the Covid-19 situation. Only 14% of those surveyed trust that everything is okay.
The difference in trust between the young and older generations of consumers is also striking. Concerns about abuses in the production process appear to be especially common among the young generation of consumers. According to the Dynata survey, in the age category 18 to 24 years, only 5% of consumers believe that everything is okay, while in the age categories 55 to 64 and 65+ this is steadily rising to more than 21%.
With the entry of Generation Z into the consumer market, brands can no longer count on trust and providing transparency in the production process is an important way to build a relationship of trust. For example, a 2017 snacking trends report found that when it comes to the millennial mindset, establishing trust also includes transparency and authenticity, among other things, especially through actions such as taking care of the planet and contributing to society.
Legacy trust will not last long, so your brand has to re-earn it.
Brands used to be able to count on “given” trust; nowadays, evidence is central. Consumers want to talk to brands and are motivated to find out the truth about products and organizations. When this is not completely clear to the consumer, I have observed that organizations can be publicly suspected of greenwashing. And I believe this development will only increase with Generation Z consumers.
Transparency is an absolute necessity to win the trust of these consumers. Brands will have to work on open communication, in which the purchasing policy, interim quality checks, certification, sustainable production and the entire supply chain are made transparent. Especially in times of crisis, consumer confidence is important to guarantee continuity. Just think of how people might trust high-end restaurants with open kitchens more. It is the same. Next-gen consumer demands to see what is happening inside your brand.
If you are a younger brand with shorter supply chains, it does not demand any complex technology to bring transparency to consumers. For example, suppose you are a carbon-neutral orange juice producer with only one manufacturing facility and a couple of suppliers. In that case, it is simple to claim your upstream and downstream supply chain and communicate it directly with your consumer. Also, if you hold any certifications or claims on the ingredients and/or the production process, it is easier to convey the message to the consumers.
On the other hand, if you are a global producer with multiple supply points, thousands of suppliers and you ship your products all over the world through thousands of warehouses and distributors, you will have to rely on complex architectures to be able to share information with your consumers about the origin of the ingredients or the route the product takes toward the last mile.
Long story short, the traceability and transparency strategy needs to be built bottom-up, starting from all the ingredients and production processes, while focusing on what consumers require in which form and stage of their journey.