MAINTAINING PRODUCT INTEGRITY ACROSS AN EXPANDING AND DYNAMIC RISK LANDSCAPE
7 NOVEMBER 2022 ◦19 MINUTES
In today's episode, we speak to LRQA's Supply Chain Assurance Technical Director, Kimberly Coffin, about some of the issues the food industry is currently facing and how businesses can ensure product integrity despite these ever-evolving risks.
In recent years we have seen the risk landscape for the food industry rapidly change, what do you think is driving this evolution?
Thanks for the question, and it’s a great question and there’s so many things to be considered. I think for the industry there’s been a historical and very strong focus on food safety and quality for many, many years and as a consequence they’ve developed really good systems to actually manage those risks associated with those key factors and those expectations.
But when we think about what’s happened in the last two to three years, the scale, and the number of changes that organisations and specifically food safety professionals within businesses are grappling with include the impact of the pandemic, we’ve got geopolitical issues that are actually driving issues with supply and availability.
We’ve got the impact of climate and climate change both from the context of flood and fire that are impacting actually our ability to actually produce food or to actually supply food and maintain the quality level of some of the baseline food stuffs that we use in the manufacturing of food products.
And even more most recently the actually cost pressures that the industry is facing with regards to the sourcing of materials as well as the demand and the need for them to be able to actually meet consumers needs by way of food to put on the table at cost competitive prices due to the inflationary impacts on every consumer household.
All of these things when you wrap them up, they have had a significant change in the way that our supply networks and our supply chains work and our supply sourcing, and what supply sourcing we have available to us in order to meet the consumer need for food.
You then actually compound that with an increased consumer awareness and curiosity, and I also like to say not just the awareness but the curiosity of consumers with regards to where their food comes from and what their food is made from and that’s driving higher levels of a desire for transparency. Which means not only are we in many cases from the food industry perspective having to look at alternative sources, having to look at multiple and new supply sources, having to look at new ways to actually manufacture products, but we need to make that we have a clear understanding and knowledge with regards to the source of those materials so that we can actually meet that consumer awareness and curiosity for transparency.
As well as the how the products are manufactured and where they’re coming from in a social perspective, our human rights, our expectations with regards to worker welfare as well as environmental sustainable practices being met. And not only are consumers expecting that or wanting businesses to be able to demonstrate that from a transparency perspective, they’re also in many respects looking for the big brands from a food perspective to help them really to do the right thing. To actually be the good consumer, to actually manage risk in that perspective as well with regards to the decisions that they make in the context of the food that they eat.
And then when you kind of overlay more recently the evolution of really the investment communities real clear targeted line of sight with regards to the importance of ESG as well as and specifically sustainability in actually being able to meet those consumer demands, make particular investment strategies that will make money if you will for stakeholders and shareholders. There is now this additional overlay that businesses need to actually ensure that they’ve got very clear commitments and strategies around not just food safety and keep food safe, but also all of these additional factors and in some cases that might underpin that brands ability to get actual resources and financial support in the context of growing their business.
Do you think it will ever go back to the way it once was?
In short, no. I think that’s probably one of the things that from a food perspective is there has been this increasing awareness I would say over the last probably six to twelve months that our paradigm has shifted and it has shifted dramatically. And I think one of the things that we’ve been seeing in a number of the client conversations that we’ve been having is really going back and taking a very strategic look at really how and what matters from a risk perspective when they look at both their sourcing strategies as well as their overriding food safety and quality processes that they’re employing within their organisations.
What are the current biggest risks the food industry is facing, and what are the implications for businesses?
I’m probably going to put this into two buckets when I think about this. When I think about it from a if you will a supply and a manufacturing perspective for brands, it’s really kind of very, its become quite complex with regards to getting the materials that they need, getting access to the people that they actually need to actually manufacture the process and at the same time the costs are driving up and up, and up with regards to all of those inputs that they use to manufacture food.
That leads itself to if you will a number of risks with regards to how they operate their business and as I said earlier, from a food safety and from a quality perspective in many respects which is the core if you will of what drives the food industry, they’ve got really well established systems in place. They’ve had them in for a very long time with regards to how they source their materials, how they onboard suppliers, how they look for alternative sourcing of the raw materials that they need, of the people that work and the processes and the procedures they have in place with regards to how they manage risk within their own operations.
And I think one of the things that we’re really seeing and it’s depicted very much in the context of the number and nature of recalls that we’re seeing since the start of 2022, is that although there are systems in place and the food industry has been very focused and has really good control measures, that this need to actually look at alternative raw materials, to look at you know how many lines do I run with the number of available people, how and what do I need to do by way of cost savings, are actually causing me some concern in the context with regards to whether organisations have gone back and actually tested whether those traditional systems and procedures that they have in place for controlling risk and managing risk within their business are still fit for purpose. Are they still trying to do the same things with lesser numbers of people, are they still trying to follow very traditional supplier onboarding processes where time is of the essence.
I guess what I’m saying is really it’s concerning in that how effective are those change management procedures, are they keeping pace with the nature of the change that businesses are needing to make in order to continue to meet the demand for food to put on the table for their consumers. And ultimately that can actually cause issues for them by way of I hate to say it, cutting corners, but actually in the name of being agile and being in the name of actually continuing to get food out the door are they actually taking the time to go back and looking at whether those processes and procedures that they have in place to manage your control risks are still suitable and fit for purpose.
Another key area that I wanted to talk a bit about is really this increase in added pressure that organisations are having with regards to demonstrating their commitment to ESG and specifically the claims that they’re making on their products.
The second thing that I’d like to talk about is the added pressure of the food industry to actually demonstrate their commitments to ESG and doing the right things and specifically around making on-pack claims. It is well understood within the food industry that food safety is not a competitive advantage, I think we’re still living in a space whereby the brand marketing teams are seeing that they can get some competitive advantage in the context of various commitments to environment and environmental claims.
And I think one of the key struggles and one of the key risks that organisations are having is how to balance that first if you will to be doing the right thing by the environment and getting the right claims out on product and package with ensuring that they’re actually undertaking the appropriate measures by which to be able to demonstrate that all of the evidence if you will that’s required to support those are actually being collected, are actually being authenticated or being verified to ensure that they actually don’t run the risk of being accused of greenwashing which is increasingly being something that a number of the government regulators are looking at very, very closely with regards to environmental claims.
I guess in the end what this really means for organisations and how this is going to have the greatest impact from an organisational perspective is really around a clear impact on brand reputation and consumer trust. And specifically when I think about it from a food safety or from a food fit for purpose and a food safety perspective, the biggest risk for brands is that we actually cause consumer harm and we actually hurt somebody in the consumption of food.
With all of this in mind, how can businesses maintain product integrity?
And its great that you asked product integrity because I see multi-components if you will when we talk about product integrity rather than food safety. And I think first and foremost it’s important to recognise when we talk about the food industry that by definition if food is not safe, it’s not food. And that is the primary focus of the food industry from a risk perspective to ensure that everything that they do ensures that food is safe to consume.
I think secondly when I look very specifically and I think about integrity its bigger than just food safety. Its around truth in labelling’s, it’s ensuring that that product that is offered for delivery is not only safe because everybody, most consumers assume that the food that they eat is safe but it is well and truly actually that that food is what it says it is on the label. It’s all about authenticity and increasingly from a food industry perspective we need to be focusing on the integrity or the authenticity of the products that we’re offering for sale.
And I think the biggest way that people can actually ensure when they think about how to maintain that product integrity, and what our increasing and ever evolving kinds of changes from a risk perspective for their business is know the source. They need to understand and it’s not just knowing the supplier its around know the source, know the source of your materials, know the source of the component parts, know the source of the manufacturers that are being used.
And then understanding the risks holistically, so we need to understand the very traditional food safety elements of risk assessment, looking at those key components that we evaluate by way of biological, physical, chemical, and allergenic type of risk factors when we look at the kind of materials that we use.
But we also need to understand and this feeds into those evolving risks that we need to increasingly be aware of with regards to the statements that we’re making on our products, the claims that we’re making and the expectations of those consumers with regards to transparency is we need to understand also not just those core food safety risk elements when we’re looking at our sources and our supplies, but we need to also understand holistically those risks. What are those risks around our sourcing and our supply chain that relate to human rights actions, the social worker welfare accountability risks. We need to also think about the risk from an environmental perspective, the use of water, the use of plastic, and really holistically look at what are all of those factors and then how do those pieces all come together with the overall assessment of the risk of our supply sources.
We also need to really look at are we effectively managing change in our operation. Increasingly as I’ve spoken about being agile, needing to make changes because of the need and the changes and the evolving landscape that we’re trying to work within. We need to make sure that we’re undertaking mechanisms by which we plan, do, check and act and that really that change management process has never been more important in our businesses.
And I think finally, when I think about how companies need to ensure product integrity they maintain product integrity, its not about setting and forgetting. We need to go back, we need to validate, we need to look at the evidence that we have to make sure that the controls that we have in place are actually still effective. As well as we need to verify and look at multiple means of verifying that what we’re doing is actually delivering us is if you will highly effective, and that the controls that we have in place are delivering the efficacy to deliver not only safe food but also products that have high levels of authenticity and integrity.
You mentioned the importance of having and maintaining a holistic risk profile, what exactly does this mean for businesses?
In simple terms it’s having a joined-up approach to end-to-end risk management within their businesses. It’s very common within food businesses to have specialist teams that look after various areas of risk. It’s quite common to see that you’ll have one group of experts that will focus around food safety and quality risks. You might have another team of experts that deal with the human rights and social elements of risk across their supply chains and within the business and operations. Again, you might very likely have a sustainability team that’s focused on things around environment and potentially animal welfare further down our supply chains.
And really whether it’s managed by one particular technical team in our business or across a number of these specialist teams which is most commonly the practice, it’s important to ensure that all of those various factors related to assessing risk are actually joined up. And ensuring not just that they’re joined up but also making sure that they provide a clarity of both the risk as well as the impact on our business. And what I mean by the impact on our business is you need to actually have these various receptors joined together and get a holistic view to ensure that the interrelationships that at any time actually are really clearly understood and so that we don’t end up actually in a position whereby we actually make a change in a particular area with regards to sourcing or with our processes or how we package our products in the best interest of environmental reasons, or in the context of a change in supply and the need to change supply to a different part of the world which may give us some underpinning improvement from a social and human rights perspective and decrease our risk there but then actually provides us with increased risk from a food safety perspective.
And an example that I’ll give you, commonly what we will see is we see this charge with regards to actually looking at how we can remove the amount of plastic in food products. And I think one of the things that we really need to ensure is that yes, we need to actually look at how we minimise and we adapt and we change the way that we actually package products in the interest of minimising plastic packaging in those products. But we also need to ensure that we’re joined up when we’re taking those decisions and ensure that there’s a clear understanding with regards to what the impact will be on the safety as well as the product integrity, as well as the product shelf life when we make such changes because that can actually have a detrimental impact on the overall safety of the products that we produce and offer to consumers.