Natural Foods Merchandiser

Q&A with Patrick Pilz

Patrick Pilz is an advisor for the Colorado-based Traceability Institute and founder of Food-ERP.com, a consulting service for food industry–related businesses.

Q: How do you see traceability working in a retail setting?
A: Traceability can help retailers deliver information to their customers and differentiate products. People in their 20s and early 30s, the “Net Generation,” are questioning anything and everything. They watch the nightly news and enter facts stated in the newscast into Wikipedia to “fact check” them. Traceability systems enable us to substantiate product claims. That’s where the money in traceability is. For example, retailers deal with claims such as “organic,” “natural” and “locally grown.” You can add to that things like CO2 footprint, social responsibility and important personal information such as whether a product has been processed with peanuts. More and more facts need to be substantiated, and a traceability system can do this.

Q: Will traceability become a requirement for retailers in the future?
A: I think retailers hold some of the data that could be the Holy Grail for epidemiology. With their customer loyalty cards, they could trace what consumers bought and participate in enhancing the reactive side of our food-safety system. Honestly, the traceability systems that are already a requirement for food manufacturers aren’t working as badly as it may seem to some consumers. The problem with most outbreaks has not been lack of traceability but rather the speed it takes to locate the source of the common denominator of an outbreak. Retailers could help with that.

Q: What’s the potential benefit for retailers with a good traceability system?
A: The best systems will provide a competitive advantage. Customers will begin to require traceability information about a product before buying it. This will be spurred by more and more Net Geners coming into the store and making the majority of the purchasing decisions. Right now, these people are young, so it’s hard to give retailers the exact timing. I’d say definitely within the next five to 10 years. Ultimately, retailers that give consumers information that allows them to make the best shopping choices will be providing the best customer service and shopping experience.

Q: What technological advances do you foresee making traceability easier?
A: Devices that can retrieve traceability information on a product are already available. The question is, when will they become widely adapted? I look at it like Toyota and hybrids. Toyota hasn’t really figured out how to make a profit from hybrids, but it believes in the future of electronic cars. I think it’s the same for traceability devices and retailers.

Q: How does our traceability model compare to those overseas? What can we learn from other countries?
A: Traceability here is largely driven by recalls. In Europe, to a much larger degree, traceability is for market harmonization and consumer-fraud protection. For example, take our “nondairy creamer.” In Europe, it would be called “nondairy whitener” because market harmonization rules require that if it says “‘cream,” it needs to be made of cream. You need to have a traceability system that accounts for the cream used, and you need to tell the consumer how much cream is in there. The same goes for origin. Prosciutto di Parma is only made from hogs in the Parma region in Italy. Here in the U.S., you can make a Black Forest ham while being 6,000 miles away from said forest, and the product has really nothing to do with the origin. I think this is intentionally misleading. Once the U.S. people figures out they are being misled, and they will, it will have broad implications on the entire food-supply chain and its regulators.

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