May, 2016

Research Perspective and Comments & Analysis

A Clear View Of Transparency And How It Builds Trust

By Charlie Arnot, Ceo, The Center For Food Integrity

If you increase transparency, you will increase trust. The Center for Food Integrity’s (CFI) latest consumer trust study provides the statistical data to prove it.

Research conducted in 2015 was the culmination of three years of work on the concept of increasing food system transparency. Consumers are asking for greater transparency and varying attempts were made to define it. CFI’s research not only defines the concept but provides a clear path to effectively address growing skepticism about food.

In a nationwide online survey of 2,000 people, CFI’s 2015 study explored transparency as it pertains to: 

  • Impact of Food on Health
  • Food Safety
  • Environmental Impact
  • Labor and Human Rights
  • Animal Well-Being
  • Business Ethics in Food Production

To identify the practices consumers associate with demonstrating trust-building transparency, survey participants were asked to rate a list of practices in each area. Here are some highlights:

Impact of Food on Health and Food Safety – Consumers rate these two categories as the most important. For these issues, they want information on the product label. That includes all ingredients regardless of quantity, allergens, preservatives and whether ingredients were derived from GMO seed. For other issues, engagement and access to information are key themes. Consumers want to be able to engage via the company’s website, and they expect information to be provided in easy-to-
understand language. 

Environmental Impact – Consumers want the opportunity to ask questions about environmental performance via the company website, and they want answers provided in simple language. When regulations are violated, corrective actions should be provided on the company website.

Labor and Human Rights – Consumers want the opportunity to ask questions about labor practices and human rights via the company website, and they want answers provided in easy-to-understand language.

Animal Well-Being – Results of third-party audits on animal care should be shared on the company website. Consumers want the opportunity to ask questions via the company website and they want answers provided in simple language.

Business Ethics – Consumers want companies to accept responsibility on the company website for all business activity. They also expect whistleblowers to be protected.

Consumers were also asked who they hold most responsible for demonstrating trust-building transparency. The study shows consumers look to food manufacturers to provide transparency in all aspects of food production — whether it’s safety, impact on health, or on-farm animal care. Farmers were second in all aspects, and nearly tied, in the  Environmental Impact category. 

Some transparency activities are more important to consumers than others. This research provides insight into which activities are most important, which is valuable information for food companies when developing plans to address consumer questions and concern. For example, providing food safety audit results by a third-party verifier is a stronger indicator of transparency than providing cooking instructions on a package.

While the research shows the highest level of consumer concern is associated with the issues of Food Safety and the Impact of Food on Health, this study proves that consumers expect companies to be transparent about all six topics tested. Consumer trust in products, people and brands depends on it.

Transparency Index

Having explored the concept of increased transparency for three years, CFI is developing an index to give companies and organizations the tools needed to effectively demonstrate transparency. A beta test of the index was conducted by: Campbell Soup Company, ConAgra Foods, DuPont, Kroger, Monsanto, Phibro Animal Health, Smithfield Foods, The Hershey Company and Tyson Foods.

The beta test results revealed strengths as well as opportunities for companies to better provide information important to consumers. Companies received high marks for providing information about the impact of food on health, food safety, environment and business ethics via company websites. Areas of opportunity include companies’ performance in responding to consumer inquiries and providing information about how they verify practices.

Demonstrating Transparency

Merely making policies available to the public isn’t enough, as they only articulate motivation. When it comes to transparency that actually increases trust, sharing specific practices was most predictive of trust in five of the six areas. Providing consumers concrete examples of practices by actually showing and talking about what you do is key to being transparent.

Practices are also a reflection of a company’s internal motivation and a demonstration of a company’s values in action. And, as scientifically proven in CFI’s trust model in 2006, shared values are three to five times more important than sharing facts or demonstrating expertise when it comes to building trust.

 

Reason For Skepticism

It is hard to know what to make of a study such as this. Part of the problem is that the sponsors of the study are very opaque as to the methodology. It is an Internet-based survey, which — it is claimed — is representative of the U.S. population. But how these people were solicited, how non-Internet users are represented, how self-reported characteristics were verified, and how deep they went to ensure these 2,000 people represent the U.S. population — religion, ethnicity, education, income, etc. — is left unclear. 

And there is reason for skepticism. The study is sponsored by an organization with decided interests. They didn’t go out and hire Gallup or Cornell University to design and conduct the survey.

The big problem with this research may be, however, that the very nature of asking questions about people’s desire to receive information doesn’t allow for a value-neutral response. For example, saying “no” to the question may imply that the person being surveyed is being judged as a bad person for not saying “yes.”

Consumers may perceive being asked if they would like to receive information as a question of their virtue as citizens, parents and spouses. After all, if respondents say they really have little interest in reading about the way laborers are paid, doesn’t that make them negligent citizens? If they are not interested in reading about food safety on the food they are going to prepare for their children and families, doesn’t that make them lousy parents? And if they don’t want to invest time in studying the business ethics of various firms and doing a deep dive into how these companies treat animals, doesn’t that make them just callous people?

We know that despite the constant repetition of the claims that people want to know all these things, there is precious little evidence that the broad masses of consumers changed their purchasing habits to align with these supposed demands of consumers for transparency.

The evidence we do have indicates consumers change purchasing habits mostly in response to specific negative events. So, if a supermarket is found to be buying from slave labor, it may impact sales. On the contrary, we can’t find any impact on consumer purchases when one supermarket is more generous than another on pay,
vacation or other benefits.

Another issue is consumer ignorance. On the Internet, it is easy to find videos of talk show hosts and others interviewing people on the street about GMOs. Even on such a hot-button issue, the videos are humorous — specifically because it is easy to find people who swear they are actively avoiding GMOs in their diet, but also have simply no idea what a GMO is, what the term means, or why or how GMOs might be bad for us. 

Recent studies indicate about 80 percent of the population wants mandatory disclosure of GMO in food — a seemingly powerful endorsement of the transparency agenda The Center for Food Integrity is promoting. Seemingly … but then one has to recognize that Professor Jayson Lusk of Oklahoma State University’s Department of Agriculture Economics conducted a survey finding 80 percent of Americans also want disclosure about their food containing DNA! And more than half of the respondents answered “false” when confronted with the statement: “All vegetables contain DNA.”

How seriously can we take survey responses in which consumers claim they desperately want transparency on things they know nothing about?

Now, none of this is an argument against transparency. It may well be that consumers would like transparency, specifically because most consumers don’t know and don’t care about certain topics. They may figure that others, such as activists, will monitor these disclosures and will make a big fuss if something is wrong. For uninformed shoppers, this may be a prudent approach.

For producers and retailers, the argument for transparency may not be directly related to sales. It is more like the argument for an open kitchen in a restaurant. The official reason may be theatre and to enhance the experience of the guests, but sotto voce, the argument is that if you do everything in public viewing, you are much less likely to see bad behavior occur or to find bad conditions tolerated.

So for companies that want to do the right thing — that want to institutionalize best values and best practices — keeping these efforts transparent makes it more likely they will be sustained.

Sustained efforts over long periods of time do build trust. So although consumers are probably overstating their real interest in knowing the details, and consumers probably think better of companies that behave transparently, producers and retailers looking to build trust are advised to operate transparently.