Six ways food manufacturers can reduce risks through supply chains

There has been an alarming growth in food recalls in Australia: 106 recalls took place in 2018-19, compared with 81 in 2017-18 and 61 in 2016-17. A provider of food safety certification and training is pointing to weak supply chain management as a primary cause and is urging food manufacturers and retailers to put in place robust food safety management systems to reduce supply chain risks.

The message comes from SAI Global, which has audited thousands of food retailers and manufacturers to ensure they comply with food industry regulations, and trains thousands of Australians annually on food safety through its tailored training, public courses and webinars.

SAI Global food safety spokesperson Maidie Wood says: “Food has never been a more global, fast-moving and complex market than it is today. When a food crosses borders of any kind, the familiar health and safety risks are joined by several others, including intentional and inadvertent adulteration, product mislabelling, substitution, spoilage due to any unforeseen circumstance, damage while in transit and unpredictable politics and shifts in regulations.”

She adds: “Food manufacturers need to be continually rethinking their controls, monitor their indirect suppliers and implement key performance indicators to manage downstream supply risks.”

SAI Global reveals six ways food businesses can reduce food safety risks in their supply chain:

  1. Always listen to the consumer. Consumers increasingly care about where their foods come from and are demanding high ethical standards when it comes to the sourcing and manufacturing of food. For example, today’s consumers are better informed about the impact of diet on wellbeing, and expect information about provenance, nutrition and allergens to be supplied on the foods they consume. As organisations are increasingly being held publicly accountable for the poor ethical activities of their first, second, third, and even fourth tier suppliers, staying close to consumers’ needs is now critical to their success.
  1. Use technology to build greater transparency. As technology is connecting food manufacturers and retailers to more suppliers than ever, it is essential they are aware of the risks. The availability of technologies such as sensors to detect temperature changes and smart packaging that changes colour based on expiry dates give manufacturers greater control over potential risks.
  1. Set key performance indicators for suppliers. As tracking performance is key to improving it, a good idea is to motivate suppliers to strive for excellence. For instance, high performing suppliers could be awarded for providing the highest quality products, most on-time delivery, and excellent service. It is best to ensure these indicators are right for the early identification of risk and are set throughout the supply chain.
  2. Monitor indirect suppliers. It can be a challenge to document the end-to-end supply chain – and manufacturers who can source from anywhere are at greater risk of losing control of their supplier relationships. This is where monitoring of indirect suppliers is important. Although this can be both an extensive and expensive process, requiring both time and money, decisions regarding who to target and how far to go depends on the relative risks associated with the ingredients or products being sourced, such as country of origin.
  3. Implement a supplier diversity management program. Supplier diversity management – the process of creating a diverse supply chain to secure the inclusion of different groups – is an increasing focus among food companies looking to move from the ‘preferred supplier’ model to a ‘multi-supplier’ relationship model. Such a program can introduce innovation through new products, services and solutions, and allow a company to explore new opportunities for business expansion. For example, if a food product has been damaged or destroyed by bushfire, having a supplier diversity program allows the manufacturer to be agile in sourcing an ingredient from an alternative supplier, possibly in a difference part of the world. This model does not come without its challenges, however. The need to stay abreast of ever-changing consumer needs makes building holistic relationships of trust and transparency even more critical.
  1. Get food safety training and certification. Although it’s a legal requirement that all food handlers in Australia are trained in food safety, more in-depth Food Safety Supervisor training, such as HACCP certification, is best practice but not mandatory. However, the benefits of this training far outweigh the risks. SAI Global encourages food manufacturers and retailers to get certified to meet internationally recognised food safety standards such as SQF, FSSC, ISO 22000, BRCGS and IFS which all incorporate HACCP, to show their customers that they have a robust food safety management system in place. These standards enable businesses to improve their processes, increase efficiencies, and ultimately, communicate with their partners about risks in the supply chain.

Food fraud a real risk for Australian food brands

SAI Global audits thousands of food retailers and manufacturers annually to ensure they comply with global food safety standards, and trains thousands of Australian food handlers annually on food safety through its tailored training, public courses and webinars. Its certification process ensures that businesses are adequately protected against risks and hazards in the food supply chain that could impact consumers and their employees, including food fraud.

The company’s food safety spokesperson, Maidie Wood, warns of the ‘hidden’ risks in a company’s supply chain that must be identified, understood and effectively managed. “Food fraud is designed to be undetected by food brands, so it is often difficult to know its true nature and reach. When it does occur, it can be because the food brand has not formally monitored suppliers, or it has poor supplier relationships, pointing to a need for greater supplier management,” she said.

SAI Global reveals the 7 types of food fraud that are prevalent in the food industry:

  1. Adulteration. In its audits, SAI Global finds that many food businesses do not have strong enough measures in place to protect their foods from adulteration, the act of adding another substance to a food item, usually for profit. One of the food ingredients most at risk of adulteration are spices, such as oregano leaves. In 2016, an Australian distributor of oregano leaves, was fined $10,800 by the ACCC after its product was found to contain less than 50 per cent oregano leaves.
  1. Tampering. Product or package tampering is the intentional modification – or sabotage – of a food product or packaging, usually in a way that can make them harmful to the consumer. A major example was the strawberry tampering incidents in September 2018, whereby sewing needles were inserted into Australian strawberries. It led to a series of copycat incidences in the industry, with devastating consequences for strawberry growers across the country. Tampering is not only related to food. The deliberate extension of expiry dates beyond the accepted parameter on dairy or meat products are other examples of tampering that can have potentially hazardous consequences.
  2. Over run (or unauthorised production). This type of food fraud refers to legitimate products that are made in excess of production agreements. The additional production volume can then end up in the supply chain under alternative, sometimes misleading labels. The potential public health threat is that fraudulent product is distributed outside of a regulated or controlled supply chain.
  1. Theft. This is where legitimate products are stolen and enter the market through less regulated – sometimes criminal – means. The danger comes when products are smuggled, co-mingled with other products, and then re-distributed to reach a target market. In the USA, food and drink are the largest dollar value of cargo theft, with the International Union of Food Science and Technology (IUFoST) reporting food and drink as the most stolen type of freight since 2008.
  1. Diversion. This refers to the sale or distribution of legitimate products that never actually reach their target market. A good example is the diversion of relief food to markets where aid is not needed or required. The UN’s food relief agency recently found that local officials in Sana’a, in Yemen, were manipulating the food assistance lists that determine who receives aid and were “illicitly” removing food from distribution centres.
  1. Counterfeit. Food fraud extends to immediate or imminent counterfeiting – the act of passing off inferior goods as established and reputable brands. This includes the production of known, branded foods outside of regulatory controls, with some of the most common being olive oil, spices (like cinnamon and oregano), and honey.
  1. Simulation. Imitation may be the highest form of flattery, but not in the case of food fraud. Simulation, which is very close to counterfeiting, occurs when an illegitimate product is designed to look like, but not exactly copy, the legitimate product. An Australian honey company came under fire in 2018 after tests found almost half of supermarket honey samples had been adulterated with sugar syrup. Essentially, fraudsters had created a ‘knock off’ honey and were selling it for a higher price, which led to Capilano’s reputation being damaged.

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.

Recalls on the rise: five signs of a lagging food safety culture

A  food safety certification and training organisation says the record spike in food recalls within Australia – up 45 per cent in 2018, compared with 2017 – is more than just back luck. It is likely a result of poor training, poor controls, and a lack of accountability – or a more concerning underlying problem with organisational food safety culture.

SAI Global has audited thousands of food retailers and manufacturers – 550 in 2018 alone – to ensure they comply with food industry regulations, and trains thousands of Australians annually on food safety through its tailored training, public courses and webinars. In the industry, it often identifies the mistakes that food businesses make in food storage, processing, packaging, distribution, display and handling. These are often related to the lack of skills and knowledge of food handlers, underpinned by a lack of commitment from those who manage the business.

Brad Costello, Food Safety Training Specialist at SAI Global, says: “Recently released recall statistics show that undeclared allergens, microbial contaminations, presence of foreign matter and incorrect labelling have been major reasons for the rise in recalls. In addition, dozens of food businesses across the country are fined each year for food practices that compromise customer health and safety – from poor hygiene, to failing to eradicate pests, to storing food at the wrong temperatures.

“Implementing a strong food safety culture is a mind-set change for most businesses. As it is driven from the top of the organisation – and can only be successful with the commitment and contribution of everyone in the business – it requires businesses to formally train their staff to provide an environment that supports a high standard of organisational food culture. Regularly evaluating performances and implementing improvements to make, store, handle, sell or serve food that is safe, should be a top priority for all food businesses, and is what we aim to achieve through our audits.”

SAI Global’s five indicative failures of a poor food safety culture:

  1. Not keeping hot food ‘hot’ or cold food ‘cold’. In its audits, SAI Global still finds that food businesses are failing in managing basic temperature controls. Storing, displaying or serving food at unsafe temperatures can encourage pathogens already present in some foods to grow, with potentially deadly consequences. For potentially hazardous foods including meats, seafood, dairy, cooked rice, and prepared fruits and vegetables, these controls have been in place for decades.
  2. Ineffective cross contamination management. Numerous food businesses Australia-wide have been fined thousands of dollars for storing or displaying raw meat, poultry, seafood or eggs alongside ready-to-eat foods. Cross contamination can introduce pathogens, such as salmonella and e.coli, onto ready-to-eat products or undeclared allergens. This can be easily avoided with correct barrier proofing, storage controls, adequate cleaning and training.
  3. Incorrectly labelling a packaged food. The consequences of mislabelling food can be fatal. A couple of years ago, a child in Sydney had an anaphylactic reaction after consuming a drink that was wrongly labelled ‘dairy free’. The business was required to pay $55,000 in fines and costs. Already in 2018, there have been various examples of potentially avoidable labelling incidents. Labelling errors can also impact the accuracy of use-by dates: food that is past its use-by date can have too many pathogens or can form toxins, rendering it unsafe to eat.
  4. Poor staff hygiene and handling practices. Food handlers should avoid eating, coughing, sneezing or blowing over foods to minimise microbiological contamination. Poor handling practices can also lead to an increased risk of pathogen and foreign object contamination in preparation areas. Clean clothing, adequate handwashing, covering open wounds and a clean and tidy food production environment can minimise the possibility of direct product contamination.
  5. Failing to remove pests. Fines have been handed to numerous food businesses for failing to take reasonable measures to eradicate pests from their premises. Pests can get into food packaging and contaminate equipment and utensils. More worryingly, pets can transmit disease: rats and mice can transmit bacterial diseases, such as salmonellosis and leptospirosis, while cockroaches can transmit gastroenteritis and hepatitis A.

Tickets released for Australian food safety event

The annual Asia Pacific Food Safety Conference (formerly the Australian HACCP Conference) will return for its 26th year on 20 August, with tickets available from 8 May. The conference brings together food safety professionals in Australia and local and international speakers to explore emerging food safety risks and discuss how the industry is meeting the challenge.

Held in Sydney from 20-22 August and hosted by the global leader in integrated risk management solutions SAI Global, the interactive three-day event kicks off with an optional food manufacturing site tour or HACCP Refresher course, followed by two days of educational talks and seminars from some of the industry’s most respected professionals – including SAI Global’s own auditors and trainers – and an exhibition.

Each year, the APAC Food Safety Conference is attended by more than 200 delegates across the retail, agriculture, food production and manufacturing, food packaging and food service industries.

John Rowley, CEO of SAI Global Assurance said, “We’re thrilled to be bringing a high calibre of speakers to this year’s APAC Food Safety Conference. It will offer the industry a valuable discussion forum on emerging food safety risks across the APAC region. We pride ourselves on hosting the country’s most important food safety event and look forward to bringing the industry together at yet another successful event.”

The 26th APAC Food Safety Conference will be held at Doltone House, 48 Pirrama Road, Pyrmont on 20-22 August from 9am-5pm.

New qualification for food industry professionals

SAI Global have announced a new qualification for food industry professionals that ensures Australian food industry professionals will have the necessary training that can assist them develop a clear career path.

Announced at the 22nd Australian HACCP Conference, the new Diploma of Food Safety Quality Management is specifically designed for professionals working with the food industry in Operations, Food Safety and Quality Assurance roles.

Advice given to quality and safety decision makers in food manufacturing, service/retail, regulatory and research institutions relating to strategic and tactical approaches are now required in the rapidly changing food industry due to new products and evolving technologies.

In creating the new qualification in Australia, Chief Commercial Officer of SAI Global Paul Butcher says the food manufacturing and grocery sector is still a vital industry providing jobs for over 332,000 people nationally.

“In 2014, it was identified that 36.6 percent of Australian employers had jobs requiring vocational qualifications, and this new Diploma will help address this need for training, helping food industry professionals develop a clear career path,” Butcher said.

The new diploma was launched in response to a growing gap in the Food Processing Training Package qualifications for food industry quality and compliance professionals, in addition to filling the skills shortages in food safety auditing and quality assurance roles.

In order to encourage young emerging managers into the industry, the new qualification ensures a consistent standard is maintained so that Australia continues to be a modern, safe, reliable and sustainable producer of food.