4 min
How does a large retailer deal with the responsibility of reliably getting 'good products' on the shelves? A retailer buys and sells, while the products find their way to the shops geographically or in long chains far beyond its sight. How to check whether everything is correct?
"Consumer confidence is falling," says Leon Mol, Director Compliance & Product Safety at Ahold Delhaize. "Customers don't want to be fooled or misled. They need to be confident that the labels on a product in the supermarket are correct." What can Ahold Delhaize do to give customers that confidence? "We simply need to make sure that the baseline of every product in our assortment is right."
The foundation must be right
Customers don't care how much effort retailers have to put into ensuring that the products on the shelves and the supply chain are "right" in terms of compliance, product safety, sustainability or transparency. In that list, the quality and food safety of the product is paramount. The customer wants to be able to trust blindly that all other aspects are also in order. If they discover that something is not correct, it damages the reputation of a retailer. A retailer must live up to its image and the expectations it raises. If this foundation is in order, a supermarket chain can then work on varying its range by including more or other products that make a difference and for which the consumer, or a specific group of customers, is willing to pay more or which are more affordable.
To secure this basis of trust for the customer, Ahold Delhaize built its own tool, explains Mol. It starts with a materiality analysis that maps out the risks associated with a product or category. Examples include working conditions on cocoa plantations, the use of pesticides or packaging materials. The risks that Ahold Delhaize itself cannot influence, but that the suppliers may be involved in, are identified and then prioritized. Mol: "There will always be issues. But you have to know where they can occur and how big their risk is." After all, it is impossible to check everything; you aim for a reasonable level of assurance.
"We can observe that something is wrong but are not always in a position to do something about it. Ahold Delhaize must also be able to explain what the company cannot do," Mol clarifies. "If a large producer is located far away and we purchase relatively little, we have little influence. Distance literally puts us at a distance."
If the risks are clear, then the group can take risk-reducing measures. Being able to make a difference for customers is always the motive. A retailer wants to make its customers and suppliers happy by surprising them or exceeding their expectations. "There is an order to what customers consider important," Mol says. For example, the environment is a top priority for most customers. But that doesn't necessarily mean they act on it in their buying behavior. According to Mol, we consumers apply two hierarchies. One is one of opinions and the other is one of behavior.
Public data
There are so many different products that it seems impossible to account for every step in the chain from plantation to coffee bean, burner to Nespresso cup. Yet thanks to data integration, this is less complicated than you might think, says Mol. After all, there are countless public data sources. Think of the databases of certifiers, quality marks, brand databases, information that other stakeholders (NGOs) already have. If you take the trouble to integrate all this data into one simple tool and combine it with the risk analyses that have already been made, you soon see where the gaps are. A supermarket chain can address these in a targeted way together with its suppliers by working on solutions to identified problems and ensuring better transparency. In this way, you can continue to earn the trust of the customer and companies can demonstrate progress.
Mol signals an important barrier. Although there is an awful lot of data available, data systems are often disconcertingly incompatible. Too often they cannot be linked. That hinders the creation of coherent overall pictures. And so, choices must be made. Hence the tool that Ahold Delhaize is developing. It permits making choices based on risk assessments. Which data are most important for what customers buy? How to maken a difference as a retailer? And what should a company, no matter how much it wants to do the right thing, rather avoid? And how to explain things that potentially will go wrong? If you can't and cannot do the right thing, make up your mind.
"What should absolutely be impeccable," says Mol, "are working conditions. They are a hygiene factor and cannot be covered by a premium price. At the same time customers don't want to know everything, they expect us to do what they expect." So, a lot of the data remains within the chain. Ahold Delhaize is constantly filtering the information and working on further fleshing out the model.
"You can't wait until all the data are available. So, we try to organize the data in such a way that we can answer all reasonable questions. We continue to improve and refine our baseline," Mol said.
Even if there is a front-of-pack label (such as the Nutri-Score or MSC logo) on a product, it is important that it is clear to the customer what its message is. This implies, says Mol, that there is an ongoing struggle to keep the message simple. Because there are so many different labels and standards, the consumer can no longer orient himself. This doesn't help the pursuit of transparency. "The packaging should say what consumers consider important," says Mol. They should be able to make the right choice easily but based on reliable data. That's why Ahold Delhaize is striving for transparency above and beyond the extravagance of branded and greenwashing communications by third parties.
The foundation must be right
Customers don't care how much effort retailers have to put into ensuring that the products on the shelves and the supply chain are "right" in terms of compliance, product safety, sustainability or transparency. In that list, the quality and food safety of the product is paramount. The customer wants to be able to trust blindly that all other aspects are also in order. If they discover that something is not correct, it damages the reputation of a retailer. A retailer must live up to its image and the expectations it raises. If this foundation is in order, a supermarket chain can then work on varying its range by including more or other products that make a difference and for which the consumer, or a specific group of customers, is willing to pay more or which are more affordable.
If a large producer is located far away and we purchase relatively little, we have little influenceRisk Assessment
To secure this basis of trust for the customer, Ahold Delhaize built its own tool, explains Mol. It starts with a materiality analysis that maps out the risks associated with a product or category. Examples include working conditions on cocoa plantations, the use of pesticides or packaging materials. The risks that Ahold Delhaize itself cannot influence, but that the suppliers may be involved in, are identified and then prioritized. Mol: "There will always be issues. But you have to know where they can occur and how big their risk is." After all, it is impossible to check everything; you aim for a reasonable level of assurance.
"We can observe that something is wrong but are not always in a position to do something about it. Ahold Delhaize must also be able to explain what the company cannot do," Mol clarifies. "If a large producer is located far away and we purchase relatively little, we have little influence. Distance literally puts us at a distance."
If the risks are clear, then the group can take risk-reducing measures. Being able to make a difference for customers is always the motive. A retailer wants to make its customers and suppliers happy by surprising them or exceeding their expectations. "There is an order to what customers consider important," Mol says. For example, the environment is a top priority for most customers. But that doesn't necessarily mean they act on it in their buying behavior. According to Mol, we consumers apply two hierarchies. One is one of opinions and the other is one of behavior.
Public data
There are so many different products that it seems impossible to account for every step in the chain from plantation to coffee bean, burner to Nespresso cup. Yet thanks to data integration, this is less complicated than you might think, says Mol. After all, there are countless public data sources. Think of the databases of certifiers, quality marks, brand databases, information that other stakeholders (NGOs) already have. If you take the trouble to integrate all this data into one simple tool and combine it with the risk analyses that have already been made, you soon see where the gaps are. A supermarket chain can address these in a targeted way together with its suppliers by working on solutions to identified problems and ensuring better transparency. In this way, you can continue to earn the trust of the customer and companies can demonstrate progress.
Although there is an awful lot of data available, data systems are disconcertingly often incompatibleMake choices: which data are most important
Mol signals an important barrier. Although there is an awful lot of data available, data systems are often disconcertingly incompatible. Too often they cannot be linked. That hinders the creation of coherent overall pictures. And so, choices must be made. Hence the tool that Ahold Delhaize is developing. It permits making choices based on risk assessments. Which data are most important for what customers buy? How to maken a difference as a retailer? And what should a company, no matter how much it wants to do the right thing, rather avoid? And how to explain things that potentially will go wrong? If you can't and cannot do the right thing, make up your mind.
"What should absolutely be impeccable," says Mol, "are working conditions. They are a hygiene factor and cannot be covered by a premium price. At the same time customers don't want to know everything, they expect us to do what they expect." So, a lot of the data remains within the chain. Ahold Delhaize is constantly filtering the information and working on further fleshing out the model.
You can't wait for all the data to be available. So, we try to organize the data in such a way that we can answer all reasonable questionsContinuous refinement
"You can't wait until all the data are available. So, we try to organize the data in such a way that we can answer all reasonable questions. We continue to improve and refine our baseline," Mol said.
Even if there is a front-of-pack label (such as the Nutri-Score or MSC logo) on a product, it is important that it is clear to the customer what its message is. This implies, says Mol, that there is an ongoing struggle to keep the message simple. Because there are so many different labels and standards, the consumer can no longer orient himself. This doesn't help the pursuit of transparency. "The packaging should say what consumers consider important," says Mol. They should be able to make the right choice easily but based on reliable data. That's why Ahold Delhaize is striving for transparency above and beyond the extravagance of branded and greenwashing communications by third parties.
Leon Mol was Tiffany Tsui's discussion partner during our April 26, 2022, Agrifoodnetworks.org Digital Food webinar ‘Trustworthy Data is Key to Reliable Due Diligence’.
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