7 risks in the food supply chain that compromise customer safety

A food safety certification and training organisation says failures in food safety – such as contaminated foods, adulterated ingredients and the presence of un-labelled allergens – can have serious, even life-threatening, consequences, and more needs to be done to positively impact customer safety in these areas.

SAI Global has audited thousands of food manufacturers to ensure they comply with global food safety standards, and to ensure they meet legislative requirements in the country of sale and manufacture. As such, it has identified common mistakes that businesses make in the purchase of ingredients, storage, processing, packaging, distribution, and handling of food.

The organisation said that, despite a strong focus by industry on customer awareness and developments in food processing and technology, food scandals continue to impact the industry. In 2017, it found that 47 per cent of consumers were less trusting of a business where major food incidents had occurred.

Kimberly Carey Coffin, global head of food, retail and hospitality at SAI Global, said: “The ever-increasing complexity of the food supply chain translates to ever increasing levels of risk, challenging an organisation’s ability to satisfy its customers in terms of quality, safety, integrity and continuity. As an industry, we are particularly vulnerable when it comes to risks that can occur deep within those chains – like intentional and inadvertent adulteration, substitution, product mislabelling and cross contamination with both naturally occurring and foreign materials.”

She is urging food businesses to dig even deeper into their food supply chain to identify and mitigate all known risks. “Many of the faults that occur in the food supply chain are often the result of an organisation lacking adequate resources to mitigate risks, not understanding the importance of formally monitoring suppliers, or having poor supplier relationships, to name a few. Ever-changing consumer demands are also putting pressure on the need to demonstrate integrity of products, as well as on the continuity of supply. Now, more than ever, food businesses must impose strict assessment practices in food production, manufacturing and other stages of supply chain management to ensure customer safety is a primary focus.”

SAI Global’s seven supply chain integrity risks that could compromise customer safety in the food industry:

  1. Fierce competition, which places downward pressure on supply costs
    As the downward pressure on supply costs continue, food businesses are often forced to look more broadly for the best source and go global. Consequently, the likelihood of risk events happening deeper in the supply chain is greater, putting pressure on manufacturers to rethink their controls.
  2. Most companies are only monitoring their 1st-2nd tier suppliers
    A recent study by SAI Global revealed that many food businesses are only looking at their first-, and perhaps second-, tier suppliers – rather than digging deeper into their supply chains. This is a significant source of risk.
  1. Most companies manage their suppliers through contractual arrangements, rather than more formal monitoring
    A reliance on contractual arrangements place the onus on suppliers to manage their own supply chain. As a result, this places any risks or liabilities on the supplier, however, does not remove the risk to the ultimate food manufacturer.  As suppliers may not be as closely aligned with the customer, more formal monitoring of subcontractors or second- and third-tier suppliers is required to navigate risks to product integrity.
  1. Many companies source raw materials through brokers and agents, resulting in loss of supplier relationships
    Any food business that sources its raw materials through brokers and agents – who can source from anywhere – risk losing control of supplier relationships. Therefore, companies need to get to know their indirect suppliers. Although this requires both time and money, it enables more effective targeting and increases knowledge of a product’s source of origin.
  1. Ever-changing consumer demands, which put pressure on continuity of supply
    Consumers are no longer just looking for a source of ‘fuel’ in the food they eat. They are much better informed about the impact of diet and food choices are often guided by specific dietary requirements or the latest food trend. Given the need to cater to more diverse consumer preferences, there is added pressure on a food business for greater information about provenance, nutrition, allergens and other attributes in the food they consume.
  1. Food brands have inadequate resources for mitigating risks
    To mitigate risks, food businesses need to make supplier diversity management a primary focus. For instance, they need to move from the ‘preferred supplier’ model to a ‘multi-supplier’ relationship model. Although this takes the organisation to unfamiliar areas of the globe, it increases a business’s focus on building holistic supplier relationships of trust and transparency.
  1. The growth of private labels
    There is an obvious financial incentive for retailers to sell private label products, as this allows them to maintain an identity in a price-competitive market. However, most retailers do not have manufacturing infrastructure and rely on suppliers to assess, interpret and manage risk. Again, this ties a food retailer’s brand equity to its suppliers, emphasising the need to manage downstream risk.