In commodity markets where bulk products are sold on physical characteristics that are simple to measure, such as protein content, moisture content, grade, or color, a product’s identity is obvious. However, in many developing markets, a product’s identity or pedigree is very difficult, if not impossible, to determine. Identity preservation (IP) programs are intended to maintain a product’s identity throughout a supply chain that may remove most or all of its physically identifiable characteristics. They preserve the intended value traits created via genetics, origin of production, unique inputs, or processing method. In other words, they ensure that a product’s label is accurate and not misleading.

The Farm Bill requires retailers to provide country-of-origin-labeling for all “covered commodities.” Data must be “captured” within the supply chain and delivered to the retailer so that retail labels can accurately display country-of-origin information.

IP programs are designed to ensure that production and process systems will deliver authentic material, while authenticity testing is simply the determination at the end of the line that a product is labeled accurately. The combination of these two activities has resulted in a new field called authenticity management.

Most scientifically valid food safety systems monitor control points throughout the entire processing chain. A beef processor’s quality assurance manager would not manage food safety risks solely by a mere test at the end of the line. Instead, the manager mitigates food safety risks by measuring control points throughout the system and setting critical limits that will eliminate or lower to acceptable levels the known risks.

The same rigor applies in authenticity management. Monitoring control points with critical limits is the most efficient and effective method of ensuring that production and processing systems deliver authentic material. In some cases, authenticity management systems also provide an efficient platform to lower food safety risks.

In the recent past, food authenticity issues revolved around the economic adulteration of high-cost natural products such as fruit juice and natural flavors. To a large extent, brand managers have successfully managed these “first-order” dilutions and extensions of products, either through tighter vertical integration with their supply chain or through a higher degree of diligence to the authenticity of the incoming material. However, when supply levels drop as a result of seasonal variations, a spike in concern always follows. These unexpected disruptions to supply chains force companies to purchase outside of their known supplier networks and expose buyers to new risks. For example, the 1998 hurricane disaster in Madagascar put extreme price pressures on the natural vanilla market and forced all flavor companies to increase scrutiny of their incoming natural vanilla. These types of disruptions expose the fragility of some supply chains. Proper authenticity management practices can help buyers be poised to enforce their quality specifications on new suppliers on short notice.

Today, the authenticity issues with which brand managers are concerned have increased substantially, primarily as a result of changing customer demands and increased marketplace competition. Consumers’ growing interest in socially and environmentally responsible production practices have resulted in a plethora of new label claims, such as “free-range,” “environmentally friendly,” and “sustainable.” Other label claims address health issues, such as “low pesticide residues” and “no antibiotics used.” Each new label claim increases the need to substantiate its accuracy and avoid economic adulteration, similar to past efforts to ensure that juice concentrate was not extended with added sugar and synthetic vanillin was not added to natural vanillas. One of the more pressing issues in the marketplace today is the authenticity management of grains and oilseeds related to genetically modified organism (GMO) label claims and compliance with international regulations.

Many of these new claims are based on unique inputs and origins, as well as specific processing methods. Category claims refer to limited production, such as appellations (e.g., Napa Valley grapes), availability of the genetics (specific breed of cattle); or the relative inefficiencies of a specific processing method (e.g., organic). In these cases, the risks are to the viability of the category’s position itself. If the value proposition of the category is simply made without any effort to control others from inaccurately making the same claim, then the category’s advantageous position is quickly diminished. This is of great importance to premium markets. It is not unheard of in high-value categories for a 1% increase in supply to result in a 5% decrease in price. Such is the life of a high-value category based on limited supply. Control of that supply is critical to the viability of the market itself.

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Mitigating Authenticity Risks
In this new era of proliferating brand claims, the question of their authenticity becomes much more difficult than in the past. Developing or threatened brands are typically more interested in producing their products according to the new types of popular production guidelines. Assuring authenticity of these new guidelines requires that they monitor their inputs and processing practices similarly to the way they manage their food safety risks.

Concerned companies should consider the following four options to mitigate their authenticity risks:
• Process Monitoring. When the authenticity issue is primarily focused on a production or processing practice within narrow guidelines, a simple and efficient system of data collection coordinated with audit results can usually provide the necessary confidence level that buyers and their brand managers require. These focused systems allow for a smooth and efficient operational environment while also allowing for the proper oversight by management and possibly by integrated buyers. It is becoming an increasingly common requirement for suppliers to provide more transparency to their customers, particularly when the supplier is asking for authenticity premiums.

For example, Sonoma Vinegar Works of Calistoga, Calif., produces vinegar for the specialty and gourmet markets. In addition to its exacting quality standards, the company has conducted much of its production under organic regulations for the past three years. But with the U.S. Dept. of Agriculture’s new National Organic Program, the allowable processes and nutrients have changed so dramatically that many organic vinegar makers have had serious difficulty producing quality vinegar. This is of serious concern to buyers. The company took the proactive step of integrating into its daily production control practices a process monitoring system that collects and coordinates production data and raw material information so that buyers and auditors can review the company’s on-going compliance through the World Wide Web. The system is also a launch pad for future claims related to appellation control and other quality practices.

When process monitoring practices are applied to a facility for the sake of food safety, it typically takes the form of a Hazard Analysis Critical Control Point (HACCP) program. The determination of control points and the setting of critical limits and action levels is part and parcel of an effective HACCP program, and the monitoring of a HACCP program, whether automated or manual, is another application of process monitoring

• Process Verification. A step up from process monitoring is the verification of those process claims by an independent third party. Formally monitoring their own operation for authenticity issues or sharing production data on a real-time basis with a client is more than most processors currently offer. However, formalizing the authenticity system with a written quality manual and having the process officially audited by a third party substantiating the company’s adherence to that quality manual is certainly a reach beyond the ordinary.

USDA’s Process Verification Program ( is such a program that companies can apply for when they seek official recognition for their authenticity efforts. USDA initiated this program to address, among other things, the market difficulties that occur when processes define a product rather than physical parameters.

Premium Standard Farms of Kansas City, Mo., participates in one of the seven current USDA Process Verified programs. Its program provides traceability to every source farm; production management under HACCP-based control; strict residue avoidance where sulfa antibiotics are not used; precision grain-based diet; quality improvements based on traits, processing hygiene, and environmental systems; and emphasis on and continuous improvement of employee safety and training.

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• Traceability. Traceability has come into the forefront in the agri-food area, mainly through regulatory pressure. Initially, the European Union demanded traceability to manage those countries’ desire for non-GMO food sources. The United States’ recent country-of-origin labeling legislation for beef, lamb, pork, seafood, produce, and peanuts provides strong incentive to many producers and retailers to develop some level of traceability to ensure compliance. Compliance is mandatory as of September 30, 2004. The incentive is a fine to retailers of up to $10,000 per willful infraction per day.

The International Standards Organization (ISO) defines traceability as follows: the ability to trace the history, application, or location of an entity by means of recorded identifications (ISO 8402) and retracing the steps relating to the history, the implementation, or the locality of what is being examined (ISO 9000-2000). In the case of a product, this can include its source of materials, components, manufacturing history, distribution, and location after delivery.

Traceability as applied to agri-food does not attempt to guarantee anything except that something came from somewhere specific. For country-of-origin labeling, that is all that is required for most products. However, satisfying country-of-origin labeling requirements gets more complicated when it is applied to market animals. It is very common for market animals to be born in one country, raised in another, and slaughtered in yet another country. The law requires that all those activities be labeled separately if they occurred in different countries. Thus, a label could indicate that an animal was born in the U.S., raised in Mexico, and slaughtered in Canada.

These types of labeling requirements force traceability systems to “lock down” data during the production and processing system to preserve the identity of the event (i.e., birth, growth,slaughter) so it can be retrieved for labeling. Country of-origin labeling is simply traceability with a specific goal.

• Identity Preservation. IP programs typically contain traceability components because most IP programs span the supply chain so that the value created early in production can be captured at processing or even further downstream. The primary difference between traceability systems and IP programs is that IP programs are designed to capture value and deliver it to market, whereas traceability systems focus on the physical movement of product. A product’s market value can be defined through its tangible or intangible characteristics. Most food marketing professionals would describe country-of-origin labels as an intangible characteristic that has yet to prove its market value. However, very similar intangible geographical-origin claims such as “grapes grown in Napa Valley” enjoy significant market value.

An IP program can only be properly designed if the value traits, tangible or intangible, are thoroughly understood. Full understanding requires that the necessary “walls” be built to preserve those value traits. In some cases, the “wall” is a buffer zone to prevent pollen drift; in other cases, it is the protocols and procedures necessary to ensure that lower-cost juices or flavors are not blended inappropriately. It is not enough to know how to create value. To successfully design, implement, and sustain an IP program, one must also know how value is lost and protect against it.

There have been many business challenges associated with IP. The unknown costs of assuring purity levels while utilizing the same commodity-oriented production assets prevented the rapid growth of IP. The National Corn Growers Association has developed a new online education tool focused on assessing the true costs associated with IP grain contracts. The program, “Making Identity Pay: Calculating Producer Cost of High Value Grain Contracts” ( is an online calculator created in response to a growing trend of producers’ underestimating their true costs for items such as time, labor, yield drag, segregation, and handling, as well as additional production costs and risk.

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“There are costs involved with delivering to the requirements set by high-value grain contracts, and that’s why processors will often pay a premium,” says Tom Slunecka, director of development for NCGA. “But we want producers to understand that a 25¢/bushel premium may not be enough to justify the additional risk and expense that these contracts require.”

The calculator provides producers an average cost per bushel for each category and allows for costs to be manipulated according the specifications of a producer’s operation. Once costs have been entered for each category, the calculator provides a bottom-line cost/bushel that producers can use as a basis for their contract negotiations. The calculator is intended to be as much a negotiation tool as it is an education vehicle.

Components of Authenticity Management
An authenticity management system consists of four components:
• Design. The design and implementation of any authenticity management system must begin with a clear vision of the goal and the value that is being created. The goal can be related to safety concerns, quality improvements, or marketing advantages. Once the goal has been defined, it must be interpreted in the form of a manual that details the measurement points, action levels, and data necessary to successfully monitor the program.

After the manual has been created but before the program is actually implemented, it is critical to review the system for practicality. Demanding unavailable data or extensive data entry from suppliers may condemn the system to low participation and eventual failure. A challenge for authenticity management systems is that they typically span a supply chain that is inexperienced in coordinating their activities. The proper strategy is continuous improvement from current practices.

It is helpful to reference existing national or international standards within the quality manual to benefit from the wisdom and experiences of the many others who have developed similar programs. ISO, HACCP, USDA organic standards, and the many other broadly accepted standards are usually an excellent place to start. However, the reason for developing a new policy manual is because the new or developing market has new and unknown risks associated with it. Therefore, it is not uncommon for authenticity management manuals to be composites of several existing programs and span the entire scope of monitoring and surveillance techniques.

• Administration. Any new initiative must have the authority of management if it is to succeed. It must also have a capable administrator committed to the goal. IP systems require the supply chain to become more coordinated if they are going to deliver more value. It is the administrator’s job to monitor and coordinate the on-going production and processing to ensure compliance with the predetermined protocols. If a producer has destroyed his product’s end-value early in the production process by noncompliance, then his production must be proactively eliminated from the IP program before it is commingled with the production of others and destroys their added value as well as his.

IP is a proactive tool. It includes end-product testing, but it does not rely on it. In fact, many times end-product testing cannot fully verify the created value. The value is created by the monitoring and verification, or even by the certification.

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• Technology. It is inevitable that more monitoring, verification, and coordination will produce more paper, possibly much more paper. Without an effort to electronically manage these new activities, we would all find ourselves buried under mountains of paper. Before designing and certainly before deploying any new IP program, the issue of information acquisition and data management should be seriously addressed. Systems that respect the numerous environments and sources that data are collected in have a higher likelihood of succeeding.

It is now assumed that the appropriate technology backbone to any IP system is a secure Web-based application that electronically accepts data from numerous field devices, sensors, and existing databases. However, the forcing of all existing activities into electronic format may not be possible for quite some time. Documents that are presently collected very efficiently on paper may take several months or years to be properly reconfigured into electronic format. Some data-entry situations are best handled over phone or fax lines. The coordinating technology should strive to accommodate each user’s preferred interface.

• Monitoring. Collection of the data is not nearly enough. The data must be monitored both actively by the administrator and automatically by the system. This requires cueing the administrator and the producers to problem issues so that mistakes can be averted. Monitoring also alerts administrators of noncomplying producers so that they can be coached to remain in the program. As a last resort, monitoring provides administrators with the necessary tool to easily divert non-complying production to other supply channels.

Tools for Future Compliance
The increased regulatory scrutiny that surrounds new genetically engineered crops has highlighted the need for agricultural biotechnology companies to manage and monitor their production practices more actively. USDA’s Animal and Plant Health Inspection Service issued a proposed rule, “Field Testing of Plants Engineered to Produce Pharmaceutical and Industrial Compounds,” on March 10, 2003. The monitoring and verification aspects of this rule show the seriousness that APHIS places on production and process monitoring and verification. Identity preservation programs have been an important tool to assist the field production and distribution of genetically engineered crops in the past. Process monitoring and process verification will be the tools that agricultural biotechnology companies will use to ensure regulatory compliance in the future.

Food companies also find themselves tied to production and process monitoring through their HACCP programs and organic labels. The continued market growth of other process control programs and process-related marketing claims that span the supply chain will lead to more process monitoring and verification programs. It is absolutely critical that those processes be monitored, measured, controlled, and verified.

by Chuck Hecht and Tim Aughenbaugh
Author Hecht is Manager, Traceability and Certification Support, Critereon Co., 7430 Ogelsby Ave., Los Angeles, CA 90045. Author Aughenbaugh is President, Critereon Co., 21024 421st Ave., Iroquois, SD 57353. Send reprint requests to author Hecht.