How certain are you that the salmon you are eating and paying a premium for is actually Atlantic salmon vs. Pacific?
How certain do you think food retailers are?
The US Grocery Manufacturers Association (GMA) estimates that food fraud costs the global food industry between $10-$15 billion annually, affecting 10% of all commercially sold food products. Food fraud is the act of defrauding food buyers for economic gain, like substituting Pacific salmon for Atlantic salmon, or diluting ingredients like adding other oils not labelled to olive oil. Most recently in early 2015 the New York Attorney General sent cease and desist letters to major retailers for selling fraudulent herbal supplements based on DNA testing, demanding they remove the products from their shelves.
I must admit I love disruptive innovations and DNA testing to detect food fraud is truly that. Clayton Christensen (a famous Harvard Business School professor) is the father of this phrase and defined a great model to characterize the path these disruptive innovations take. I would like to use this model to illuminate how far we have come with DNA testing to detect food fraud and where we are set to go.
A disruptive innovation:
1. Begins with simple applications or services at the bottom of a market: Today we can use DNA testing to answer the simplest of questions in your food supply, for example is there pork in this product? Conversely, if we expect there to be pork in this product but there is not, then we can also ask what is this product?
2. Opens the market up to a new group of consumers that could not otherwise access it due to lack of money or skill: This is where we thrive as Emerging Technologies here at SAP Waterloo. We have already unlocked this valuable testing to citizen scientists via the free LifeScanner mobile application built in cooperation with the Barcode of Life organization, available on the appstore today. But we’re not stopping there. We are working to make this technology available to Enterprises as well. What once was thought of as something that only PHDs in lab coats could do, I can confidently state we (meaning technologists, not scientists) can perform these types of tests using incredibly intuitive SAP software (I may be biased because we built it) and hardware out of our own WatHaus!
3. Initially offers lower profit margins per unit sold and attracts smaller markets than established competitors: I think we are at this stage now, attracting early adopters, those that want to reduce costly recalls, protect their brands, increase consumer confidence, and ultimately pay the fair price for the food they source.
4. Eventually begins to move up market to displace established competitors: only a matter of time!