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The online grocery channel is expected to grow 15 to 18 percent over the next decade, according to a study from consultancy ATKearney. A subset of this business growing at the same time is the sale of fake food products.
The estimated value of the global counterfeiting marketing for food today is $49 billion, according to NetNames, a leading online brand protection firm that tracks, identifies, and removes rogue websites. The firm says fake food products account for as much as 15 percent of all the illegal goods seized in six leading global markets.
Consumers are the prime target of companies selling fake food products online under the guise of legitimate brands. Most commonly counterfeited food products are olive oil, honey, seafood, balsamic vinegar, wine, spirits, and spices. But such commonly purchased items like canned soup and Parmesan cheese are vulnerable, too.
To keep their costs low – at least 50 percent lower than the authentic brand – counterfeiters put fillers in the product. “Ingesting a fake food – with who knows what kind of chemicals contained – is pretty frightening,” Andrew Brodsky, a commercial director at NetNames, told me.
Counterfeit food obviously damages legitimate manufacturers and the reputation of their brands. The practice – if not slowed down or eliminated – also hurts the perception and viability of the online grocery channel itself and may have a ripple effect on grocers, who are getting into this business.
NetNames monitors large and small global marketplaces. Brands hire this firm to detect counterfeit food sold there, but also to remove their illegal listings from marketplaces like Amazon, Alibaba, and many other smaller ones, as well as from websites that promote themselves as legitimate affiliates of a food brand or a grocer.
Counterfeiters often tweak the label on the food package to make the fake product look almost like the real thing. Sometimes the spelling of words on the package is incorrect because the native language of the counterfeiters is not English. Price is a give-away as well. If the products offered are an exceptional deal – say 50 percent lower than normal – there’s a good chance they’re counterfeit, says Brodsky.
Should consumers be wary if they purchase food products online from little-known marketplaces and pure-plays? Sure. There are plenty of these operators today. Meanwhile, I believe that independent grocery retailers, their wholesalers, and self-distributing grocery chains are diligent in sourcing their products.
Brodsky, the expert who tracks the sources of counterfeit food online, is not as confident as I am. He recommends that grocers double-check their supply chains and strengthen their relationships.