How Start-ups can Grow Transparency and Food Safety in the CEA Industry
When companies leave the contents of their supply chains and their food safety practices in obscurity, consumers are much more likely to fear the worst than assume the best. Food safety and transparency are the bedrock of any strong and sustainable food system. They are the currency for trust and reputation with increasingly savvy consumers, who are increasingly wary of the labels and claims that have increased exponentially over the last decade. Yet, neither supply chain transparency, nor robust food safety are simple programs for companies to deliver.
For start-ups, like many companies in the Controlled Environment Agriculture (CEA) space, navigating the regulatory requirements, reputational risks, and ever changing tides of consumer preference can be daunting. Fortunately, by taking a measured and methodical approach to assessing risks and placing them across a matrix of materiality to the company’s internal and external stakeholders companies can prioritize and set goals to meet the most important milestones first. To be effective, this process should engage a wide range of stakeholders in both open-ended dialogue as well as forced-rank responses to issues identified process leaders. Completing a materiality assessment may also re-focus work in dramatic, yet important ways to better optimize returns to stakeholders. Regardless of the ultimate outcome, going through a process of assessment and ruthless prioritization is necessary to achieve the right level of organizational focus to enable progress.
For many, compliance with regulatory requirements, like the Food Safety Modernization Act (FSMA), will drive initial work in this space. For CEA, many of the supplier codes of conduct and concerns around drilling down into the practices of raw material suppliers will not only be concerns of the operators of CEA companies, but will also represent the types of inquiries from customers of CEA companies. Being prepared to handle supplier audits successfully is critical to marketplace success.
Beyond the basics, CEA practitioners have many exciting structural advantages and opportunities in the space of transparency and food safety. Unlike traditional food companies, where a long an opaque supply chain obscures source origin in many cases and led to the months-long debate and ultimate recommendations on consumer-facing romaine origin labeling, CEA operators can afford to offer their customers much higher resolution visibility into the origin of their greens. Consumer research has shown this type of added transparency can by worth a 2-10% premium in the marketplace, which CEA operators are well-poised to reap.
Beyond the opportunity for radical transparency in the CEA space, CEA also benefits from a bit of a reputational halo from consumers who perceive the roofs and walls of CEA as safer than the open irrigation ditches and fields that characterize the field-grown industry. Unfortunately, people, water, and temperature abuse can and do still exist in CEA operations. Understanding and planning to manage and mitigate these risk factors will be critical to the ongoing success of the industry. Utilizing existing frameworks available through third-party food safety certifications is the best way for operators in this nascent industry to safeguard their reputations and build their success by growing the trust of consumers. I believe the formation of the new CEA industry food safety commission is critical to supporting this important baseline food safety performance and then continuing to augment and grow that performance and credibility with consumers through aligned communications.
