Food fraud – the intentional adulteration, misrepresentation or mislabeling of food products for economic gain – has been around almost as long as the food industry itself. But, more recently, food fraud has become exacerbated by rising food prices, driven by factors such as the war in Ukraine, climate change and disruptions in global supply chains.
These pressures have increased the temptation for unscrupulous companies and actors to commit fraud by diluting or misrepresenting products like olive oil, honey, maple syrup, spices, juice, infant formula, meat, seafood and more.
As a result, the threat of food fraud to packaged food brands and the food industry as a whole is greater today than it’s ever been before. Packaged food companies individually and the food industry collectively should put a greater emphasis on preventing food fraud. The issue needs to be elevated on both the corporate and industry agendas.
We all know about the big cases of global food fraud, such as the Chinese infant milk and Europe’s horsemeat scandals, because they became national news stories with bold headlines. But the day-to-day business of food fraud, which not only causes economic trouble but can also cause harm to the health of consumers, is much more subtle and insidious and garners far-less media coverage.
Take, for example, a study by the University of California at Davis Olive Center. The research institution is dedicated to advancing research, education and outreach in the field of olive production and processing. It found as much as 69% of all store-bought extra virgin olive oils in the US were probably fake. Researchers surveyed oils in US grocery stores and natural foods markets and tested numerous bottles from well-known brands, including store brands. Out of those samples, the majority failed to meet international standards for extra virgin olive oil.
In Europe, a European Commission investigation found nearly half of the honey imported into the EU could be fake, diluted with cheaper sugar syrups.
Access the most comprehensive Company Profiles
on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Company Profile – free
sample
Your download email will arrive shortly
We are confident about the
unique
quality of our Company Profiles. However, we want you to make the most
beneficial
decision for your business, so we offer a free sample that you can download by
submitting the below form
By GlobalData
According to the US Food & Drug Administration (FDA) two (of the many) other common food fraud ploys involve juice and spices. For example, with juice, manufacturers will sell a mixture of citric acid, sweetener and water as “100%” lemon juice or mix grape juice into their “100%” pomegranate juice, according to the FDA. The consumer harm is mostly economic. However, the FDA has had cases where companies have mixed expired, contaminated juice stores in dirty conditions with fresh juice in order to hide the low quality of the expired filthy juice, which can harm the health of drinkers.
When it comes to spices, according to the FDA, one common type of fraud involves bulking up an expensive spice, such as saffron, with other non-spice plant material like plant stems. Another spice fraud scheme involves using dyes to give spices a certain colour, especially when the colour strongly impacts the perception of quality. Lead-based dyes and other industrial dyes that can cause adverse health problems such as cancer have been found in spices sold in the US and elsewhere, such as chili powder, turmeric and cumin
The fast-rising cost of food at the grocery store – retail prices in the US have increased by nearly 25% since 2020, for example – has put the food industry and grocers much more in the crosshairs of consumers in the last few years.
Consumer trust in packaged food companies (particularly the majors) and grocery retailers (particularly the big chains) has declined post-pandemic, according to research from public opinion research firms like Gallup, business intelligence firms like Morning Consult and others.
Because consumers are paying so much more for groceries today than was the case just a few years ago, they are much more concerned about whether or not they’re getting what they pay for. As such, food fraud has the potential to negatively impact brands in a big way.
For example, in a survey of CPG brands conducted by Red Points, a food fraud protection platform that uses AI, 39% of respondents said they will no longer trust brands that are reported to have fake products. Additionally, 44% of respondents said they believe they have bought fake food products in recent times. A majority, 58%, of respondents said packaged food companies need to do more to protect consumers from fake products.
Brands live or die, thrive or fail, based on brand reputation. In the past, food fraud hasn’t been considered a key focus variable when it comes to building and maintaining brand reputation but now it should be, particularly by the major packaged-food companies.
As brands go, so goes the food industry collectively. In other words, food fraud today is a much higher threat to the reputation of the food industry as a whole than it was pre-pandemic. As such, the industry and its trade associations need to elevate the prevention of food fraud on their agendas, too. Partnering with the retail grocery industry and its trade associations is key because consumers view both in a similar way, along with the fact the CPG and grocery retail industries are allied and have a symbiotic relationship and shared responsibility to consumers.
There’s no magic formula or silver bullet to prevent food fraud but new thinking and advances in technology make doing so easier than in the past. In 2024, the food industry can leverage technology, regulations and best practice to combat food fraud. Here are five key strategies to focus on:
Blockchain for supply chain transparency
Blockchain provides an immutable ledger where every step of the supply chain is recorded. This ensures transparency and traceability from farm to table.
Companies can use blockchain technology to track food origins, handling and processing. This ensures that consumers and regulators can verify the authenticity of food products.
Enhanced food testing and authentication technologies
New testing technologies (e.g. DNA sequencing, isotope analysis, spectroscopy) allow for the accurate detection of adulteration and substitution in food products.
Companies can implement advanced food testing to verify the composition and quality of products, ensuring they meet standards and are free from fraud.
AI and machine learning for risk detection
AI can analyse vast amounts of data from the supply chain, sales trends and historical fraud cases to predict and detect fraud risks.
By integrating AI, companies can continuously monitor for signs of food fraud in the market and take preventive actions when anomalies or suspicious activities are detected.
Supplier audits and certifications
Ensuring suppliers follow stringent quality control measures reduces the risk of fraud entering the supply chain.
Food companies should conduct regular supplier audits and work only with those certified under global standards like BRCGS (Brand Reputation Compliance Global Standards) or GFSI (Global Food Safety Initiative).
Consumer engagement and education
Educated consumers are less likely to fall victim to fraudulent products and can help detect fraud by reporting suspicious products.
Through transparency campaigns, labelling standards and educational efforts, companies can empower consumers to make informed choices, such as verifying certifications and understanding product origins.
By combining technology, regulatory standards and consumer involvement, the food industry can significantly reduce the risk of food fraud in 2024.
There will be long-term changes in how consumers view food companies, especially in the US and Europe, because the cost of groceries has increased so much in such a short time period. Evidence of this is the fact the cost of groceries – and the food and grocery industries themselves – are one of the top “hot-button” issues in the current presidential campaign in the US. Normally the topic and the industry doesn’t even come up in US presidential campaigns.
Consumers trust food companies and the food industry less than they did before Covid-19. Authenticity is much more important to consumers now than it was just a few years ago. This isn’t going away.
Food fraud is growing and getting more sophisticated. Government regulatory agencies charged with dealing with food fraud are stretched too thin. Both packaged food companies and the food industry should put a greater focus on food fraud prevention because it has the potential to be very damaging not only to consumers but also to brands and the industry.
Sign up for our daily news round-up!
Give your business an edge with our leading industry insights.
