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A Smart New World Preparing for the mobile shopper Food Regulations and Labelling Standards Conference 2015 Maria Palazzolo, CEO, GS1 Australia Tuesday 28 th July 2016

Maria Palazzolo - GS1 - A Smart New World - Preparing for the mobile shopper

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Page 1: Maria Palazzolo - GS1 - A Smart New World - Preparing for the mobile shopper

A Smart New WorldPreparing for the mobile shopper

Food Regulations and Labelling Standards Conference 2015

Maria Palazzolo, CEO, GS1 Australia

Tuesday 28th July 2016

Page 2: Maria Palazzolo - GS1 - A Smart New World - Preparing for the mobile shopper

© GS1 Australia 2015

A Smart New WorldPreparing for the mobile shopper

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Extended label information that can be personalised, organised and presented in real-time is both technically feasible and available today.

The AFGC, GS1 Australia, Telstra and Cadence Economics have worked together to develop a paper that explores what this new world means for the food and grocery industry in Australia.

Photo Here

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GS1 Australia

• Neutral, not-for-profit and user driven membership based organisation

• Locally administer the GS1 System of Standards – one of 112 countries within the GS1 global network serving over a million companies worldwide (head office in Brussels)

• Provide a range of industry endorsed and supported services

• Over 17,000 users in the private and public sectors, across 21 sectors

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Page 4: Maria Palazzolo - GS1 - A Smart New World - Preparing for the mobile shopper

GS1 Standards are the global language of business—

a language for identifying, capturing, and sharing information automatically and accurately,

so that anyone who wants that information can understand it, no matter who or where they are.

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GS1 Standards

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Identify Globally unique identification keysCompanies, Products, Locations, Logistics, Assets, and Services

Capture Automatic data captureBarcodes and EPC-enabled RFID .

Share Exchange of business-critical informationMaster Data, Transactional Data, Digital Content and Event Data

Use Streamlining business processesTraceability, Data Quality, Digital Coupon Management

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Some key findings - A Smart New World

• Dynamic digital labels provide a means of providing extended product information, tailored to what the individual consumer may wish to know

• Digital labels reduce costs for manufacturers, brand owners, retailers and others in the supply chain

• A centralised comprehensive up to date product database that provides consumers and trading partners with accurate product information will be central to the new world of food and grocery retail

• Data is the critical element and brand owners are best placed to provide this data.

• A potential annual economic impact for Australia of around a quarter of a billion dollars is estimated from the widespread uptake of global standards for the provision of digital product information in the food and grocery sector.

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The Rise of the Connected Consumer

Omni-channel consumers shop anywhere, anytime and look to form relationships with brands rather than channels, such as in-store or online.

This revolution is being driven in part, by the fact that consumers are connected today in ways unimaginable just 10 years ago.

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Adoption of smart phones & tablets has grown rapidly – From 37% in 2011 to 71% at the end of 2014, and predicted 94% by 2020 (smart phones)1 Teleyste

Australian Tablet Study 2013-2017; ABS; Telstra CDR Live Data, August 2013; IDC tablet forecast and analysis.

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Connecting Consumers and Production Information – Labels

Traditional static labels, and even smart labels using thin film, are unable to cater for all possible consumer requirements. So, the question becomes:

How do we connect a consumer to the right product information at the right time and in the right way to meet their needs?

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To succeed in our increasingly mobile world, retailers and brand owners must change the way they think.

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Data Standards – The Vital Link in the Supply Chain

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Global StandardsA global set of standards is vital to the delivery of mass information to the retail market.

It enables all manufacturers, retailers and trading partners in the supply chain to store and access data – and to share it with consumers – knowing that the data is reliable, up-to-date and above all, accurate.

Data standards have long been supported by the AFGC, which is committed to the provision of accurate, high quality, safe and appropriate product labelling.

Standards in the Food & Grocery Supply Chain

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Consumer Demand for Product Information

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Safety Examples: Best before date, batch numberReason: Avoiding contaminants, food safety, traceability

Allergens Examples: Peanuts, gluten, dairyReason: Safety for allergic persons

Product Description Examples: Brand. Variant, flavour, priceReason: Main factor in consumers purchasing decision

Package Size Examples: Weight, volume, ingredient percentageReason: Fair trading, calculation of unit costs and recipe quantities

Product Identifier Examples: BarcodeReason: Unique product code for cashier to scan, stocktakes and reordering

Nutritional Examples: Energy (9kj), fat, sugars, sodium, ingredient list and %Reason: Dietary guidance

Religious & Cultural Examples: Halal, Kosher, vegan and vegetarianReason: Consumer preference to avoid certain ingredients

Social & Ethical Examples: Organic, free range, RSPCA approved, sustainableReason: Consumer preference for ethical, social or animal welfare attributes

Address Examples: Street address of manufacturerReason: Ability to contact the manufacturer by post of physical address

Country of Origin Examples: Country of origin, location of manufacturer, process or area where ingredients are grownReason: Enhancing product transparency

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• Savings to the manufacturer, from reduced labelling costs

• Time savings for consumers, from better filtering of data to suit individual needs

• Accurate real-time information

• Extended information

• Customised and personalised information

• Increased accessibility

• Data synchronisation between trading partners

• Traceability and recall

• Two-way and multiple communication

Benefits of Dynamic Digital Product Labels

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• Proximity technologies – Quick Response (QR) Codes

• Vicinity technologies – Public Wi-Fi and beacons

• Imaging technologies – Object recognition Apps

• Consumer lifestyle Apps – GS1 GoScan,

MyFitnessPal, EasyDietDiary

There is a wide variety of technologies and approaches that can be employed to deliver extended digital product information to the consumer.

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Connecting Consumers and Product Information – Access Technologies and Apps

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Increasingly, there are more regulations around nutrition, allergens, product traceability and shelf-life management

(Over 4 million Australians are sensitive to at least one allergen)

Food manufacturers in Australia that export to Europe must comply with legislation that came into effect in December 2014 – namely, EU Regulation No 1169/2011.

Additional labelling regulations will continue to add pressures to the physical product label, continuing to add cost and complexity

Over the years, the public has placed increasing pressure on government to adopt a more strategic approach to food labelling and policy, and has pushed for greater visibility of product ingredients and nutrition.

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Regulation and Policy Implications

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• Reduced re-labelling costs$30M p.a.

• Reduction in information gathering costs by consumers* $350M p.a.

• Label changes cost the industry approximately $5k-$15k per product, whilst changes to electronic data cost a fraction of this and can be distributed in real time

• AFGC estimates that every $100 million in cost reductions to the industry results in an economic impact of $243 million per annum.

Based on these estimates, the wide spread adoption of global standards for the provision of digital information to consumers in the food and grocery sector can have a total positive economic impact of approximately $250 million per annum

* ½ x 9.34m households x savings per household of (5/60 hours per week x $25.06 per hour x 70% take up rate x 52 weeks per annum)

Implementation of Extended Labelling technologies can have some real and direct savings to all industry participants as per AFGC Estimates

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The Economics of Extended Labelling

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Mobility is changing the way Australians shop, with over 70% of Australians already owning a smartphone (predicted to reach 94% by 2020) and 39% own a tablet (predicted to reach 78% by 2020).

The predicted increase in market penetration by 2020, creates a clear opportunity for the use of digital labels in preference to static, printed labels that are costly to update and cannot provide real-time information.

Industry, Governments and Consumer Groups need to collaborate to develop digital product labels into a real alternative mechanism for consumer communication.

The Future

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For Governments, legislators and regulators to break out of the old paradigm where the simplistic solution to every consumer information demand was to “put it on the label.” Instead policy and regulation needs to envisage a world where mobile devices are the instinctive and primary source of consumer information

The Challenge

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Today’s mobile technologies are not just a means of communicating, but are a powerful tool for enhancing the shopping experience and giving consumers information beyond the physical label to allow them to make more informed decisions

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Thank you