When it comes to breaches in food safety, the past 18 months have been this country’s worst on record.October 29, 2009
When it comes to breaches in food safety, the past 18 months have been this country’s worst on record.
It started in the summer of 2008 with the Food & Drug Administration’s botched recall and destruction of $40 million of Florida tomatoes believed tainted with Salmonella Saintpaul. As it turned out, the cause of the outbreak that sickened more than 1,250 people across the country was ultimately traced to jalapeno peppers grown in Mexico and distributed to a facility in Texas.
And then in January of this year who can forget the peanut butter salmonella scare that resulted in at least eight deaths and more than 500 sickened in 43 states, many of them children. Add to that the millions of dollars of consumer packaged good products recalled –– more than 400 –– that contained peanut butter.
So, it is no wonder that retailers with store brands are keenly focused on food safety and manufacturer testing and certification. In fact, an industry survey conducted by the Consumer Goods Forum (CIES) in 2007 and again in 2009 found that food safety moved up from the number seven slot to number two in importance among retailers and manufacturers, “which is primarily a result of the frequency with which food poisoning events have made major news,” said Kevin Edwards, Global Food U.S. Strategy Manager for SGS – Consumer Testing Services.
Of course the other event that got many industry players to pay more attention was when Wal-Mart threw down the gauntlet in February 2008 and became the first U.S. grocer to adopt Global Food Safety Initiative (GSFI) standards, which would require suppliers of private label and select food products to comply with standards above FDA or USDA requirements. GFSI requires food suppliers to achieve factory audit certification against one of its recognized standards, which include Safe Quality Food (SQF), British Retail Consortium (BRC), International Food Standard (IFS) or an equivalent such as Global-GAP.
Then, this past summer, Target notified all of its store brand suppliers that it will require them to be GFSI certified by next year, according to industry sources. When market leaders such as Wal-Mart and Target take action, other industry players follow suit.
Other issues driving retailers and manufacturers to focus more on food safety is the growing complexity of the global supply chain and how many more products are sourced from high risk areas such as China, India and Latin America. The focus on U.S. food safety regulation and systems improvement, as well as the lighting speed of communication in the digital and social-media age brings food poisoning news to consumers in real time.
“Companies that want to create a brand with their own label on it want to make sure its safe and of good quality. The rest of risk management is all about brand and image protection,” said Edwards. “Quality assurance programs will cost a fraction of what a recall will cost.”
As more retailers demand certification standards from their manufacturers by certain dates, meeting those deadlines will be extremely challenging because there are not enough qualified auditors to meet the demand, according to Edwards of SGS.
Executive Education
Responding to the industry's need for more education and training around food safety, testing and certification, the Private Label Manufacturers Association is hosting a two-day SQF Systems Training program, in conjunction with Silliker Inc., on the tail end of its trade show in Chicago Nov. 15-17. The training, which runs all day Tuesday Nov. 17 and Wednesday Nov. 18, focuses on implementation of SQF 2000.
The curriculum is designed for company personnel responsible for SQF compliance, quality assurance, quality control, food safety, and technical and operational management, as well as sales and marketing management wishing to advance their knowledge of the auditing and certification process, according to PLMA. Registrants will receive certificates of completion.
Brand Protection
As more retailers develop unique and premium products, expanding upon their national-brand-equivalent base, they are also more cognizant of the risk of new product development and the importance of protecting their brand equity. For market-leading retailers, testing, certification and quality assurance programs are also about marketing, building consumer loyalty and growing market share.
As more consumers connect with store brands, the time is now for retailers “to drive quality, safety and consistency of their products to continue to grow market share long after the recession is over,” said Scott MacLennan, director of store brands for Specialized Technology Resources (STR).
If the food safety scares are not enough to get retailer and supplier attention, then the threat of lost profits should be, said Roy Lamothe, STR’s general manager of North American operations. “It will impact their bottom line. They may not see it today, but sooner or later the statistical risk of not having a compliance program will catch up to them and it will impact their buyers and their clients, and they will lose market share.”
Some store brand retailers are also using product testing and audit programs to help them make better marketing and advertising decisions.
SGS is helping several retailers test their products against national brand equivalents “so they can make the right investment decisions in promoting those brands against national brands,” said Edwards. “In some cases, it helps them determine which brands they might shift to a [value or economy tier]. This information can save substantial ad dollars. It helps them focus on the correct product positioning and marketing strategies for their packaging and campaigns.”
Other retailers turn to SGS to help them evaluate vendors. In one instance SGS identified a preferred supplier who had a strong food safety record but didn’t treat its workers very well, giving it a low corporate responsibility score. “We’re helping customers making more informed supply chain decision as well as helping them protect their brand investments.”
SBD Views: The topic of food safety will be getting lots of attention at the upcoming PLMA show. Leading food safety certification companies will be exhibiting in the new Innovation Hall and three special conference sessions on the topic of Safety & Certification are part of the Innovation Hall conference program.
Photos: Courtesy of STR