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Can Food Traceability Protect Japan's Food Export Sales?

05.04.2011
My colleagues in the IDC Manufacturing Insights group wrote about the impacts of the Japanese disaster on large manufacturer's supply chains, soon after the March 11 earthquake and tsunami in their I would like to examine the impact on food supplies and markets, particularly seafood, rice, green leafy vegetables and dairy products, which have been severely impacted by the events in Japan. In the short term, production has stalled or at minimum slowed for many of these products, reducing availability for local markets. In the longer term, fears of food contaminated by radiation will require additional monitoring to reassure both the domestic and export markets, and perhaps new strategies that provide visibility to the precise production, packing and shipping locations of distributed consumer, and especially food products.

According to , 100 % of Japan's milk, yogurt and rice is sourced domestically, but is in short supply at the moment, with many store shelves still bare. This raises the question as to whether Japan will change some of their protectionist tariffs on these products and welcome more imports. Sanchanta also reports that production levels at Meiji Holdings Co., Japan's leading producer of dairy products, are still at 20% to 50% of pre-earthquake levels, mainly because of the rolling power blackouts in the Tokyo area. According to the report, rolling blackouts are making it difficult to complete the whole production process - whole batches of yogurt have been ruined. The power outages will continue at least through the summer months, if not longer. According to the WSJ, a Meiji spokesman also pointed to another pressing issue - procuring the packages for milk and yogurt, after the tsunami incapacitated some factories that make plastics that are used in containers.

No doubt, there is a real danger of crops and products wiped out either by the tsunami or by high levels of radiation in the impacted Japanese regions, but some fears may be unwarranted, specifically related to seafood. Additional testing is certainly warranted. Some areas are not allowed to bring any products to market at this point, but on April 4, 2011 that the Japanese government is shifting policies as to the geographic areas that must comply with this policy. While the government will not budge, for consumer safety reasons, on the allowed radiation limits, sales restrictions on certain crops, in certain areas, will be lifted. Radiation levels exceeding government limits have been detected in green leafy vegetables, milk, rice and in water. So far, radiation levels have not been reported elevated in seafood.

Unfortunately for Japan, the impacts on food production for domestic and global markets may persist long past the real danger, for food products that are not even sourced from the affected area around the Fukushima nuclear plant. While this is a true statement, one could also argue that most people don't know where their food comes from, nor have they ever really wanted to know. However, the impacts of previous disasters on consumer behavior suggest that the awareness of a potential health and safety threat to one's family is likely to generated new behaviors. One very recent example is the impact on consumer seafood purchases after the BP oil spill in the Gulf of Mexico in April 2010.