Study: Retailers to Make GFSI Standards Mandatory for Store Brand Suppliers

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December 16, 2009

By Maureen Azzato

While store brand food safety and certification takes center stage for a majority of food retailers, how and by what deadline these programs will be executed varies widely among operators, according to the “Food Safety Retailer Benchmarking Study” conducted by Store Brands Decisions this fall.

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Seventy-one percent of survey respondents said they plan to make Global Food Safety Initiative (GFSI) standards mandatory for suppliers of food and beverages, while 19 percent said they were undecided and 10 percent said they had not thought about it.

“Given the importance of store brand food safety certification and the numerous options that retailers have available, we conducted this study so retailers could, for the first time, benchmark their plans against the broader food retailing market,” said John Failla, founder and president of Store Brands Decisions.

Resonating loud and clear from the survey results is that store brand manufacturers will be affected substantially more by food safety certification standards than national brand suppliers with 71 percent of respondents saying they will make GFSI standards mandatory for store brand suppliers only, while 23 percent remain undecided.

“This landmark piece of research illuminates that store brand food suppliers should anticipate the need to meet GFSI standards within the next 12 to18 months as a fundamental requirement of doing business,” Failla said. “Suppliers that don’t have plans in place now to achieve this are behind the curve.”

Other key study findings:

• Retailers have a wide range of deadlines for mandatory supplier compliance of GFSI standards -- 42 percent said they are undecided, 10 percent require compliance by the end of 2009, 10 percent by June 2010 and 29 percent by December 2010. One retailer respondent wrote: “I think it is very important that all co-packers meet the same operating standards particularly in the realm of food safety and quality. We are not able to visit all plants on a regular basis due to staffing limitations.”

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• A majority of respondents (75 percent) currently source store brand food products from suppliers in emerging markets such as China, India, Asia, South America and Africa. More than 58 percent of respondents said they intend to continue sourcing from emerging markets, while 23 percent said they are undecided about their future plans.

• Of the four accepted GFSI certification schemes 74 percent of respondents said they plan to accept Safe Quality Food (SQF); 61 percent British Retail Consortium (BRC); 48 percent the International Food Standard (IFS); and 45 percent Dutch HACCP. Multiple responses were accepted for this question. One retailer respondent wrote: “We will allow both SQF, and BRC. We are looking to move any vendor away from the Dutch HACCP component.”

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“The uneven acceptance of approved GFSI schemes is an issue for suppliers who are concerned about the costs associated with becoming certified in more than one scheme,” Failla said. “This issue contradicts a fundamental GFSI principle whereby benchmark standards have been created so that any scheme meeting the standards can be accepted by retailers with confidence.”

As important as implementing GFSI standards is, one retailer wrote this comment in his survey response regarding overall store brand quality and safety: “We recognize that this alone will not be adequate enough to protect our products or to provide higher and more consistent quality.”

Twenty companies participated in the survey including grocery chains, mass merchandisers, wholesale clubs, chain drug, and convenience stores. Combined, respondents operate more than 16,000 stores generating in excess of $300 billion in annual retail sales.

Major retailers participating in the study included Supervalu, Sam’s Club, Topco, A&P, Food Lion, Target, Nash Finch, Wegmans, Wakefern, BJ’s Wholesale Club, King Kullen, Winn-Dixie, Sears/Kmart, Pamida, Smart & Final and Walgreen’s.

Study respondents included headquarters management from food safety and quality assurance, buying and merchandising and executive management.

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Keywords: brc, business, companies, food and beverage, food safety retailer benchmarking study, gfsi, global food safety initiative, haccp, ifs, industry, john failla, markets, private label research, sqf, store brands decisions, store brands research

Comments (3) - Post a Comment

The most interesting aspect of the study is the indication that many retailers don't understand one of the fundamental goals of the GFSI process: Taking advantage of the convergence of the accredited standards so that each can be accepted and considered interchangable. Cherry picking from the schemes defeats the purpose and will add tremendous costs for the manufacturers forced to attain multiple certifications. These will undoubtedly be passed along in the cost of product.The fault for this lies squarely with the GFSI board. They have done a poor job of promoting an understanding and acceptance of the program amongst retailers. Instead, auditing firms have been left to sell the GFSI concept, resulting in an inconsistent and fragmented approach.Who will take responsibility for educating retailers on the basic concepts of the GFSI?

William at 1:03pm EST - December 16, 2009

William,In my view, you have placed accountability for this problem squarely where it belongs. The GFSI board needs to step up and demonstrate leadership to ensure that the intentions of this program are in fact realized. Without such leadership, the conflicting commercial interests of interested parties will steer adoption off the GFSI's intended path.The investment that we made in doing this research is the first demonstration of our commitment to help bring clarity to this critical industry issue.Thanks very much for your candid and direct comments and observations.John FaillaStore Brands Decisions

John Failla at 1:26pm EST - December 16, 2009

GFSI is a good startThe big problem all of the various "schemes" SQF, BRC etc, are not recognized by each and every customer/vendor which adds a great deal of wasted $$ for suppliers, who must duplicate and triplicate their efforts, hiring staff just to manage the various GFSI standards etc.There is really no reason why all of the various "schemes" cannot be merged into 1 solid global FS Standard. It means everyone at GFSI must swallow their personal egos and hidden agendas and say let’ us develop a sound program, implementing the best of all of the programs and removing items that are redundant or not necessary. If we can make HACCP a global standard, why cannot we do this for the GFSI schemes?There is very little difference between SQF and BRC the two most popular schemes. I know very few people who are using Dutch HACCP and other schemes at this time.I do feel the ISO 22000 is a great start and using that as a platform SQF, BRC and the other GFSI schemes could be properly merged to make 1 globally sound Food Safety Standard and this would help customers, suppliers and the certifying bodies to concentrate on 1 standard and not 2-5 standards.One of the big issues I have on SQF and BRC is the ambiguity of the standards and lack of SQF/BRC management addressing the issues and leaving it up to the various CB to make a ruling.CB's need sound guidance and removal of the "if's" needs to be the sole responsibility of the owners of the GFSI programs.Likewise the actual audit criteria needs to be simplified for the suppliers who are being audited and ensuring the auditors guidance document matches the standard that is being used, to prevent later issues during the audit.To customers who demand GFSI (which I applaud you for this), accept all GFSI schemes and stop cherry picking, otherwise we will wind up going backwards and not forward to 1 GLOBALLY Accepted FS Standard. Again you the customer demanding GFSI, you are in the driver’s seat to demand GFSI adopt 1 Globally Accepted FS Standard.Tom@HACCP.US

Tom Ambrosia at 9:25am EST - January 5, 2010

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