The evolution of traceability into an ESG must-have
Not long ago, traceability data in food and beverages was largely confined to operational and technical teams. Its primary purpose? Ensuring products moved safely and legally through the supply chain – a tool for logistics and reactive issue management in the event of a food safety or quality concern.
But nowadays, traceability is no longer just a compliance checkbox. It’s a strategic asset.
In 2025, the more information held and shared about a product and its journey along often complex, international food and beverage supply chains the better.
Not only do customers increasingly value these granular insights on aspects such as ingredients, suppliers and processes, to name but a few, but this same in-depth traceability data can directly support organizations in their broader sustainability goals.
As our own Traceability Report highlighted last year, 74 percent of food professionals now say that their businesses understand the importance of supply chain traceability.
It’s a major shift that signals how traceability has changed from a narrow and costly means of compliance to a critical mechanism for driving ESG progress – and adding value.
A pillar of ESG
Traceability data is now a cornerstone of any solid ESG strategy. Take emissions tracking.
Full transparency on the traceability of where a product has been, how it’s been processed, transported and packaged, at each point in the value chain is invaluable when it comes to calculating an accurate and verifiable carbon footprint figure to weave through annual reports or even share on-pack. It enables companies to gauge greenhouse gas emissions through the whole lifecycle of a product, from farm to fork, and from both direct and indirect sources, a level of detail that’s increasingly demanded by regulators, retailers and end consumers.
Much the same goes for ethical sourcing. It’s no longer enough to slap vague claims around fair pay or eco-friendly supply chains on a product. At least not if companies want to avoid the wrath of US and UK regulatory bodies like the Federal Trade Commission in the US and the Competition & Markets Authority in the UK, both of which are stepping up efforts around greenwashing and unsubstantiated claims. Instead, any ESG claims now need to be backed up by clear evidence, be it on point-of-origin, ethical labor practices or deforestation-free supply chains.
For waste reduction meanwhile, traceability data has an added bonus. Not only can it verify any public-facing claims a company is looking to make but it can also provide the type of insight needed to accelerate progress. It can highlight inefficiencies or hot spots in supply chains where waste routinely occurs but might otherwise have been overlooked, such as areas of repeated overproduction, machine downtime or spoilage.
Higher Bar
If traceability data is already invaluable to achieving and verifying progress in ESG, it’s only set to become more critical in the years ahead. Regulators are currently rolling out a raft of legislative changes that will raise the bar on corporate sustainability, with a whole new set of rules and requirements for food and beverage companies to meet – or face hefty financial penalties.
Any companies selling to or operating in the EU for example, will soon need to be compliant with the EU Deforestation Regulation (EUDR). In force from 2023, though the implementation has been pushed back until the end of this year (2025), the EUDR ensures that core commodities, including coffee, palm oil and cocoa, and their derived products, must be deforestation-free. Any affected company will need to trace supply chains, assess and mitigate risk and submit due diligence statements for any product in-scope. And despite multiple extensions, our survey in 2024 uncovered that – though the majority of companies feel prepared for the change – a fifth still didn’t feel prepared for the implementation of EUDR, highlighting the scale of the challenge.
This year will also see the first set of statements submitted by larger companies affected by the EU’s Corporate Sustainability Reporting Directive (CSRD). This sweeping piece of legislation significantly ups the ante on the granularity of sustainability reporting with required metrics spanning pollution, waste reduction, biodiversity and greenhouse gas emissions, among many others.
And though the US remains less tightly regulated on ESG reporting than the EU for now, there are signs of that changing. For example, the Food Traceability Rule set to be implemented by the FDA will require certain food businesses to maintain similarly detailed records about the origins and movement of specific foods within the supply chain. Earlier this year, the regulator said it would extend the date for enforcement until July 2028 but that still gives impacted companies only three short years to comply.
From fragmented to streamlined
Collecting and curating this level of traceability data can throw up enormous challenges for food and beverage companies.
A single product may have ingredients sourced from multiple different countries or producers, for example, each processed and transported individually to reach a manufacturing plant. From there they could be distributed to a vast ecosystem of different retailers, each with their own data requirements. That’s without even touching on the end-of-life disposal stage that, with concepts like extended producer responsibility gaining traction, also looks set to become an ESG metric.
It’s a lot to navigate. And though manual reporting tools (some companies tell us they still use Excel spreadsheets) may have worked in the past, when traceability data was narrow and for internal use only, that approach is unlikely to cut it any longer.
It’s why platforms like Foods Connected are using technology to help businesses to centralize their vast reams of data and link traceability to ESG metrics in a way that helps turn fragmented datasets into something more cohesive and, frankly, digestible.
Because the bottom line is that sustainability is no longer a nice-to-have. It’s increasingly demanded by customers, investors and consumers alike. And traceability data is the key to unlocking the information that companies need to make progress – and prove it too.
Dr. Stephanie Brooks
Dr. Stephanie Brooks is Head of Research & Innovation at Foods Connected. Her experience spans more than ten years in academia, food manufacturing and food tech. With an undergraduate degree in Food Science and a PhD in Food Supply Chain Management, Stephanie has spent her career working in food manufacturing environments in an R&D capacity, as well as working on and managing several multi-million-pound research projects while working for Queen’s University Belfast. Stephanie has worked with Foods Connected for the last several years, working on innovation projects and implementing traceability and AI solutions within the food industry.