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By Dan Bogar, Chief Revenue Officer at Varcode

Technology Tracks and Measures Temperatures Throughout the Product Journey

The popularity of direct-to-consumer food deliveries, especially produce and other fresh foods, realized record industry growth in 2020, and it’s a trend that shows every indication of continued double-digit growth for 2022 and beyond.  One of the most interesting developments to emerge from this rapid expansion is the re-analysis of how optimized fresh food packaging can significantly improve providers’ business performance – from greatly reduced customer churn to new package design standards that increase profitability.  At the heart of this new trend in packaging is the quest to better understand the end-to-end journey of delivered fresh foods.

No fresh foods industry segment better represents this packaging challenge than direct-to-consumer meal kits.  According to a recent university study, the majority of meal kits delivered to consumers contain one or more perishable food items that have been exposed to temperatures above the 40-degree Fahrenheit safety zone that impedes the growth of potentially harmful bacteria.  The report indicates the meal kit industry needs to more accurately track and measure temperatures throughout the product journey to better understand how more strategic packaging directly impacts product quality, which in turn affects consumer confidence and better controls operational costs.

Monitoring temperatures optimizes meal kit packing strategies.

Research by North Carolina State University

Earlier this year, researchers at North Carolina State University evaluated 72 deliveries of identical menu items from 12 leading companies that deliver meal kits, ready-to-eat meals, or perishable foods via a delivery service such as FedEx.  Key findings of the study include:

  • More than 76 percent of the 72 boxes delivered included at least one product above the 40-degree Fahrenheit food safety zone.
  • Nearly 42 percent of the companies had all deliveries above 40 degrees
  • 50 percent of the companies shipped boxes with at least one protein product above 40 degrees Fahrenheit, and nearly 17 percent of those companies had all deliveries over 40 degrees
  • More than 58 percent of the 12 companies shipped boxes with at least one fresh fruit or vegetable product above 40 degrees Of those companies, more than 41 percent had all packages arrive over 40 degrees Fahrenheit.

At issue is the fact that few details are known about the journey of these packaged fresh foods from when they leave the vendor to when the foods are delivered.  Direct-to-consumer food companies are left in the dark, with no data and no control over their own products.  If a fresh food product registered at 50 degrees Fahrenheit when delivered, we need to know how long it was above the recommended 40-degree safe zone.  Knowing whether it was for 10 minutes, or more than four hours is important for determining food safety.

At present, there is no oversight or regulations, so consumers are left to trust the packaging design and shipping policies of the vendor and delivery companies, and, given the high temperatures noted in this research report, it appears there is considerable room for improvement.

Package design and coolants impact food safety

Researchers found that knowing more about the complete product journey uncovered new data on how the types and quantities of packaging coolants used significantly impact perishable food safety.  Approximately 17 percent of deliveries using dry ice had at least one item above 40 degrees Fahrenheit.  Of deliveries shipped using gel packs, 93 percent had at least one item above 40 degrees Fahrenheit.  All the deliveries containing two kilograms or less of gel packets had at least one item above 40 degrees, and 90 percent of deliveries containing six kilograms or more of gel packets had at least one item above 40 degrees Fahrenheit.

More accurate end-to-end monitoring also enables companies to tailor their use of coolants and other packaging design components to adjust for seasonal changes, as well as geographic variables that require adjusting packaging strategies for differing climates around the world.

The impact of data-driven adjustments to fresh food packaging is immediate and far reaching. The right package design and coolants applied in the right environments easily reduce packaging costs by optimizing packaging designs and materials, decrease the need for re-deliveries, and cut back on fresh food waste, all of which ultimately increase revenues.  For example, the average gel pack accounts for 15 percent of a shipment’s cost of goods sold, not including the product plus the extra shipping weight. For a temperature-sensitive product typically sent via two-day shipping, each pound of that extra shipping weight adds anywhere from $5 to $10 per shipment, depending on the carrier and shipping rates.  The key to predicting and managing these costs, of course, is having accurate, detailed box-by-box temperature data.

Packaging strategies impact customer retention

Improved packaging strategies based on accurate temperature monitoring also address another significant, industry-wide business challenge – customer retention.  Many direct-to-consumer food delivery companies are facing troubling levels of customer churn – sometimes more than 50 percent – and multiple studies report that consumers cite food safety as their primary reason for choosing or changing vendors.  If they have accurate digitalized monitoring, food delivery companies can utilize this data to enhance packaging efficacy in ways that build customer confidence and loyalty.  Emerging monitoring technologies can further reduce customer churn by enabling direct engagement with customers who, for example, can use their mobile phones to confirm the freshness of their deliveries and gain instant access to customer satisfaction surveys and other forms of dynamic content.

Providers of fresh foods have the potential to ensure long-term growth for the direct-to-consumer industry segment, and research shows that new packing strategies based on optimization for variable temperatures is a major factor.  First, however, these strategies must be based on detailed, scalable, actionable data that can only come from accurate, affordable, box-by-box temperature monitoring.

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