Impact of food safety standards in global supply chains

Food safety is fundamental to any food supply chain, regardless of the product category. Ensuring food products can be safely consumed is a must for any viable food producer or agribusiness. In a broader context, robust food safety standards contribute to food security, economic prosperity, and market stability.

Given the supply-chain complexities and the risks involved, the importance of food safety standards cannot be overstated. These standards act as a blueprint for food industry practices, establishing the necessary safeguards and procedures to ensure the consistent delivery of safe and healthy food. But what are food safety standards? Who is driving their adoption? And what are the benefits to them?

Broadly speaking, food safety standards can be split into two types; public and private. Both of these play a crucial role in establishing resilient food supply chains.  

Public food safety standards are set by governmental agencies or international public bodies, such as the European Commission in the EU or the Food and Drug Administration (FDA) in the U.S. These standards are legally binding and enforced through inspections, penalties, and even product recalls. 

Although regional by definition, these standards often impact beyond their own jurisdictions. For instance, European food safety standards greatly influence global food suppliers as exporters try to adhere to or exceed EU standards in order to gain market access.   

Private food safety standards are instead developed by industry associations, non-governmental organisations (NGOs), or individual companies. These standards often exceed governmental requirements and seek to enhance food safety practices beyond the minimum regulatory requirements.  

With foods and ingredients passing through multiple countries and various processing steps the opportunity for food safety risks increases. Therefore, it is easy to see why several private standards – such as HACCP, ISO and GlobalGAP – have risen to international prominence. They inherently require transparency, consistency, and communication among supply chain partners and encourage measures that identify and mitigate risks throughout the supply chain.

The adoption of food safety standards is driven by four main groups: food producers, retailers, customers, and competitors 

Food producers want to ensure consumer safety as a means to avoid legal issues and maintain a positive reputation. Empirical evidence suggests that adhering to safety standards also has an extensive and positive business impact for many producers and suppliers, such as increased business growth, profitability, operational efficiency, and innovation.

In a recent survey by BRCGS, 70% of respondents acknowledged that implementing the necessary changes to meet food safety standards resulted in improved efficiency and increased productivity. Additionally, over one-third of companies reported experiencing higher profitability as a direct outcome of obtaining food safety certification and making the associated investments and upgrades.

Retailers’ influence in promoting food safety throughout the supply chain cannot be understated. Retailers act as gatekeepers between producers and consumers and as such they have a significant influence over the food safety requirements. Large retailers often impose private standards on suppliers and require suppliers to meet or exceed them.

However, in the wake of the cost-of-living crisis a growing lack of trust between consumers and larger retailers has emerged. A recent survey from YouGov reports that 4 out of 10 consumers don’t trust supermarkets, potentially indicating that their influence is diminishing. Nonetheless, retailers remain pivotal in ensuring food safety standards are upheld, and their continued commitment to stringent requirements plays a crucial role in safeguarding consumer confidence in the food supply chain. 

Consumers the world over are increasingly conscious of the quality and safety of the food they consume. As a result, consumer demand for safe, high-quality food is a significant driver for the adoption of food safety standards. Research in the UK carried out by YouGov has shown that 69% of consumers look to labels for assurances that the food products they consume are safe, with the British Lion, Red Tractor and Fair Trade icons being the most readily identified quality marks among British food consumers.

Global competition also has a direct impact on food safety practices as companies increasingly try to differentiate themselves on safety and quality standards. Adhering to stringent food safety measures can provide a competitive edge by reassuring consumers about the quality of their produce. According to the previously mentioned BRCGS survey, competitive forces play a significant role in why businesses obtained food safety accreditations – with approximately 40% of respondents seeking accreditations in response to competitors having already obtained the same or similar certifications. Similarly, more than 60% of companies pursued the accreditation with a view to developing new market opportunities and achieving growth.

The adoption of food safety standards offers many benefits that extend beyond just ensuring the health and safety of consumers. Such standards promote public trust, provide a structured framework for streamlining operations, enable companies to access new markets, and support the broader global food security agenda. 

Promote public trust: Food safety standards provide a demonstrable commitment to delivering high-quality and safe food products. As such, standards promote public trust and consumer confidence.  

Structured framework: Implementing food safety standards provides a structured framework that enables companies to identify potential risks and hazards as well as facilitate proactive management. Moreover, it leads to the establishment of more efficient and streamlined processes that can result in operational improvements and cost savings.  

Market access: Adhering to food safety standards paves the way for agrifood companies to access new markets. This is particularly crucial in the context of global supply chains, where adherence to internationally recognized food safety standards can be a prerequisite for trade.  

Global food security: Food safety standards play a critical role in supporting the broader global food security agenda. By promoting safety and quality, they help to reduce foodborne illnesses and waste, contributing to more sustainable and resilient food systems.

Ensuring food safety across the global supply chain is a multifaceted and crucial undertaking. It involves the diligent application of both public and private food safety standards. As supply chains become increasingly more complex, global competition increases, and consumers become increasingly conscious of food quality and safety, maintaining food safety isn’t only a legal obligation but a business imperative that can boost growth, profitability, and efficiency.

At Farrelly Mitchell, we know that implementing food safety standards across the supply chain presents a wide range of challenges, from the high costs associated with upgrading facilities and training staff, to the complexity of managing standards across different regions with varying regulations. Our food safety services help clients adapt to the latest food safety policy and regulations while our market insights, feasibility and agtech services can help clients identify and adapt to the latest food safety practices and technologies.

To discuss how we can help you achieve your food safety goals contact our food and agribusiness experts today.