"The traceability system spans 12 countries. Over 250 operations are connected into it. There are 430,000 electronic sensors.
"This gives us a view of our global network from the farm right the way through to the customer, for all our product groups.
"It covers the primary product, all dairy and non-dairy ingredients as well as the packaging."
This gives Fonterra a comprehensive line of track-and-trace through the company's entire supply chain.
"If, say, a food incident is reported in China, the batch number printed on the product's packaging can be used to track the product's journey to the retailer."
Fonterra can track a product back to the group of farms that milk was sourced from, the place the product was processed and all of the packaging. It gives a clear view. The company can identify any problem and can report back to customers or regulatory bodies.
Kirk says: "We have always been able to do this batch number tracking manually. But now we can do it at pace. In the past it might have taken three or four days to find the original source of a product. Now we can get this in under three hours."
He says Fonterra originally developed the tracking system for internal use and to help give regulators a fast response when required. However, the same technology now means that Fonterra can open product traceability to consumers.
The software does this in three stages. First it returns the unique identifier to the customer. When the code is coloured green, they know have an authentic Fonterra product. At the same time, the software shows a product image shot. This means the consumer can check the package in front of them is the same as the one on the database.
They also get details about the manufacturing date and the batch number.
Kirk says the customer can almost instantly confirm the authenticity of a product on the shop shelf in front of them or at home in their kitchen. They can also check it has not reached its sell-by period and is safe to consume.
When this consumer traceability was tested in the market, customers made it clear they wanted to be more linked to the product.
"We added provenance and origin into those messages. Consumers could learn which Fonterra site their product was manufactured at. We also gave linkage to the milk pool on a regional basis.
Customers see a map of New Zealand that's colour-coded to show where the milk solids came from."
There are other messages about the pasture-fed nature of the milk and so on. Kirk says the idea is to give consumers some insight into what Fonterra stands for.
While the QR codes Fonterra uses to give consumers access to the tracking system have their limitations, Kirk says they are by far the most popular option, especially in China. He says that 97 per cent of the population use QR codes.
An advantage of QR codes is that they are multi-layered. "You can put several layers of information into a code and you can have information that is shielded. So we use one layer for consumer information. One layer is made accessible to our in-market representatives and another layer is administration access."
Product authentication helps Fonterra control its brand identity. The company may come up against counterfeiters using its brand, or against criminals tampering with products. Kirk says a product recall organised over the 2013 WDC80 tampering with infant formula was partly responsible for starting the company down the traceability path.
He says any global brand owner like Fonterra now has to take precautions to protect itself from attack.
"There are overt and covert levels of technology to help us here. Sitting in the background of this system are a lot of analytics that allow us to track codes globally. This lets us identify grey market activity."
An example might be if a consumer in China scans a product that was destined for the Hong Kong market. Another possibility is that the system might see the same code scanned again and again from different places. Both of these could indicate criminal activity.
Kirk says Fonterra works with a partner that has a global security network to spot this kind of activity. "They give us intelligence on counterfeiting hotspots or tampering hot spots," he says.
Although setting up a complex tracking system like this can be expensive, Kirk says it's a cost Fonterra is willing to absorb. "It's about us being able to keep the promises we make to our customers. We have a world-class product and that quality resonates with customers.
"It's about trust — you have to trust the people who feed you. This is not something we take lightly."
In many respects Fonterra's advanced technology traceability system is the 2019 equivalent of a quality mark. Twenty years or so ago, a tick or logo from a recognised independent source would have been enough to give customers confidence to buy a product.
Today, that reassurance comes with a wealth of data to back it up. Kirk says it's an approach that Chinese consumers have taken to.
