9 th CII National Food Safety and Quality Summit Voluntary Standards for achieving Excellence in Food Safety and Quality in Food Exports PC. Anil Kumar Head Food Safety & Hygiene (SAARC) Sealed Air India Pvt Ltd Mumbai
21st Century Challenges Private Label Foods flood the Marketplace Health & Nutrition - influencing Product Development Global Financial Crunch, Cheaper Price Production Costs, Cuts on food spending Decreasing Consumer Confidence Clamor for Foods that meet Health, Safety & Environmental Needs Changes in Preferences and Sourcing Patterns Problems on Traceability - Supplier Food Safety Controls
21st Century Challenges Product Mislabeling & Misinformation (Allergens, GMO’s) Risk & Recall Communication Migration of Hazardous Substances Concerns on Food Bio-security Consequences of Climate Change Environmental Degradation World population 7B (2014) 9B (2040)
What are Standards? • Documented Agreements • Containing Specification • Consistently used as Rules, Guidelines or Definitions of characteristics • Ensure that Material, Products, Processes & Services are Fit for their Purpose 4
Drivers Governments “Name and Shame” policy in some countries. Retailers legal responsibility (due diligence legislation in some countries) and increasing retailer own labels. Retailers do not want to compete on the basis of “who’s food is safer”. Shuffling off certain risk management costs to producers. Globalisation of retailing and production (i.e. global sourcing) requires rigorous quality assurance system. New food-safety, health and environmental requirements are being used as value-chain governance tools. 5
Why Voluntary Standards? Voluntary and mandatory standards traditionally serve different objectives: Voluntary standards Mandatory standards Develop markets for socially or environmentally responsible Foster trade and economic products growth Promote other environmental Encourage competition social and environmental Protect consumers against objectives unsafe or substandard Compensate for the lack of products local or national regulatory capacity But as we shall see, objectives are beginning to overlap. . .
Why should Indian FBO care about Voluntary Standards? Consider. . . “Market power” means – The number and market power that in developed-country markets, goods and of voluntary standards producers conforming to concerning the environmental these voluntary standards and social aspects of production enjoy an advantage. is growing dramatically – Some voluntary standards are The best example of this trend is GLOBALGAP. effectively becoming required in certain markets. Why?
Why should Indian FBO care about Voluntary Standards? Changes in CONSUMER VALUES. 1 Consumer demand in developed Such as concern for countries (and increasingly in developing child labor practices, countries) is starting to reflect non- fair payment to economic values & preferences farmers, and the 2 environmental impacts caused by the In addition, these consumers are production of goods. increasingly concerned about food and product safety As a result. . .
Why should Indian FBO’s care about Voluntary Standards? An increasing number of In response, consumers are willing to 1 the private sector has. . . pay more for “Quality Imposed environmental, social, and product- goods” safety requirements on their suppliers. Developed “Quality product lines” and Increasingly, consumers put 2 selected suppliers who can conform to their requirements pressure on the private sector to provide “safe (These requirements are sometimes existing voluntary standards; sometimes a new goods” above and beyond voluntary standard is developed.) regulations.
Why should FBO care about Voluntary Standards? As a result. . . Both primary producers and manufacturers in the developing world increasingly find that compliance with voluntary standards is essential in order to: Increase the value-added of their Enhance their ability to act as products/become less of a suppliers to developed-country commodity supplier. companies. Maintain access to/share in old Gain access to new markets. markets and with old customers. 10
Sources of Standards Many Standards – Many Sources Standards are set and administered by. . . National, Regional and International Organizations Which may be. . . • Governmental • Multilateral • Non-profit
Standards – My Which One ? head hurts.
key consideration for adopting any standard Remember, the business case for adopting a standard examines: “costs of adoption” (internal costs of change and operating costs under the standard) Revenue potential depends revenue potential after the on how important a standard is adopted. “certified” product is to the ! target consumer, AND on how well-known and reputable the standard is.
Reputability: a key consideration We cannot endorse any Developed by a Requires diverse group of certification by an standard stakeholders and accredited, independent 3 rd not only by However, we can identify the “industry insiders” party characteristics of standards “Chain of custody” A clear, memorable requirements track which have: label on the the product from product at retail source to retail – Tended to be most successful in the outlet* marketplace – Been most-endorsed and promoted Standard requires real changes from * For product “business as standards usual”
GLOBAL FOOD SAFETY INITIATIVE GFSI launched in year 2000, following a directive from the food business CEOs. Food Safety was then, and is still, top of mind with consumers. Consumer trust needs to be strengthened and maintained, while making the supply chain safer. Managed by CIES – The Food Business Forum GFSI Mission: “ Continuous improvement in food safety management systems to ensure confidence in the delivery of safe food to consumers ” 15
What is GFSI? GFSI: an international collaborative platform Government Certification Scheme Owners Bodies Retailers Suppliers International Accreditation Organisations Bodies Academia Service Providers Food Service 16
GFSI - Technical Working Groups
Foundation in Science Codes Of Supplementary Codes Practice GFSI Recognised Schemes Schemes ISO Standards Standards ISO 22000 Codex Alimentarius Standards Principles HACCP Principles Legislation Requirements
BENCHMARKING Once certified, accepted everywhere
Key Features – Voluntary Standards Management Commitment Pre Requisite Programmes Quality Management System Food Safety System – HACCP Sustainability Model Sector Specific and Levels Rules for certain activities / processes and procedures Few Requirements identified as CRITICAL Fundamental – Knock Outs 20
Key Features – Voluntary Standards Scoring System Performance Levels % / Grades Audits based on performance – Surveillance – Announced / Unannounced Requirements for CB Requirements for Auditors Requirements for Consultants Requirements for AB Systematic Monitoring Process 21
Wide Acceptance - GFSI Recognised Schemes
Benefits - Voluntary Standard Demonstration of due diligence - Commitment Effective documentation and record keeping Traceability is one area where VS exceed Codex recommendations Requirements for staff training Impact on public health Impact on Market access – Recognized Around the World Continual improvement in processes for quality and safety Minimise product risks and recall Ensure to meet legal and regulatory obligations 22
Benefits - Voluntary Standard Prescriptive rather than outcome focused requirements Prescription presents a number of advantages: Producers/ processors can clearly understand what is required of them Auditors can readily judge with relative uniformity whether the required provisions are being met Standard implementers have reasonable assurance that their requirements are met by their suppliers 24
How To Implement ? Management Commitment Consult your customer, understand their needs Identify the suitable management system standard for implementation Understanding the Requirements – Training Systematic and proactive approach, rather than reactive with costly actions Develop reasonable, timely and cost-effective action plan Monitor program implementation and efficiency periodically Select qualified and experienced service provider for consultancy or external verification 25
Independent Verification – Why? • Increasing consumer demand for product differentiation in global markets • Buyers are increasingly using Assurance Schemes to verify quality • Excellent tool for the operator to: Validate their quality and/or traceability system against international standards To communicate to customers and suppliers the quality standard they have achieved • Increases producer’s credibility – Verify label claims – Halal, Non-GMO, Organic, Kosher, fair trade, etc • Certification an increasingly valuable “ticket to trade”
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