A total of 59% of respondents reported having increased budgets for traceability systems this year.
A number of foodborne illness outbreaks with poor recall execution and the inability to track and trace products through the supply chain have caused significant long-term damage to major brands in the food and beverage industry in the past 18–24 months, said the market research firm.
The ability to recall items effectively has become vital to manufacturers as media coverage of illnesses, injuries and deaths exacerbates consumers’ negative reaction towards businesses and brands.
According to VDC, vendors across the food, automotive, pharma industries reported consumer liability (64%), financial costs (55%), and trust (45%) as factors most affected by an inability to trace items in the supply chain.
Regulations including the Food Safety Modernization Act (FSMA) will pave the way for more traceability solution investments in the next 18-24 months, said VDC.
VDC said hardware vendors must establish vertical-specific partner networks of specialized traceability software vendors, resellers, and systems integrators to capitalize on the growing opportunity.
For software developers, developing cloud-based systems with predictive analytics capabilities will enable them to become more accessible to a broader base of users, it added.
Shahroze Husain, research associate at VDC, said: “With deadlines for provisions of regulations such as the FSMA and DQSA fast approaching as soon as 2016 and 2017, respectively, investing in traceability systems and software that monitor products through production and distribution processes is becoming a vital consideration for manufacturers.”