History – The world’s private food assurance schemes have been in existence for more or less 25 years. Initiated by UK retailers during the 90’s with Red Tractor, Nature’s Choice for farms, and BRC for processing. Early in 2000, the gauntlet was taken up by the German retailers with the launch of IFS and GlobalG.A.P. and then assurance schemes disembarked some 12 years ago in N. America with SQF and others under the guise of GFSI Schemes.
Purpose & Setup – Retailers needed to respond in UK the implications of 1990 UK Food Act and in Europe to food safety concerns by governments concerning pesticide management and residue levels in product. Nominated supply chain actors came together sponsored by the retailers and their anointed scheme secretariate to agree the membership structure and define the prescriptive technical content. The outcomes were the formulation of codes of Operating Practices for these retailer’s global food supply chains with compliance delivered via annual 3rd party auditing of registered farms and processing sites with the issue of relevant certificate by the approved CB’s.
Evolution – During the initial 10-15 years, the operating level of these global supply chains gradually reached acceptable levels of Good Practice compliance and certificated status. This structure and approach were major contributions to the reduction of pesticide levels and promotion of food safety culture within supply chains across the globe. That said, from that time onwards, the impacts became less impressive.
- Scheme owners incorporate in version upgrades increasingly more technical content to answer retailer and consumer concerns on environment, social compliance etc., however these additions to already large prescriptive annual checklist review processes, have become very cumbersome and more expensive for suppliers. Notwithstanding these challenges, scheme owners have expanded their structures and focus of product portfolios and global reach to access and attract developing countries supply chains memberships with debatable levels of success.
- From the supplier perspective; the repeated annual audit has devolved in many cases into an expensive tickbox/cut and paste process which hasn’t delivered progress nor differentiated between suppliers who all have the same or similar certificate compliance.
- From the retailer’s perspective; these schemes are regarded as minimum operative levels or lowest common denominators for suppliers where the buyer dictates that either the supplier has a valid 3rd party certificate or the truck doesn’t unload at the DC. More discerning retailers and food service brands have established further 2nd party technical requirements to satisfy their consumer/brand differentiators.
- From the consumer perspective; these schemes were setup as B2B and are largely unknown to the consumer with the exception of UK where some final product labeling is present.
Covid disruption – For the last 25 years, scheme owners have expanded in size and complexity relying on the same membership structure using 3rd party approved CB’s for the stipulated annual site audit and certification process ……and then came Covid 19. The lukewarm response of GFSI scheme owners to implement quickly remote auditing led in many cases to food supply chains not being audited. This major hiccup highlighted the fundamental question of just how robust is the concept of retailers outsourcing food safety compliance to scheme owners who haven’t introduced any fundamental structural innovation since the inception of the system nor in reality delivered tangible value since the plateau of Good Practice was reached 10 years ago.
Where to now – Digital innovation is disrupting many sectors today and with the movement to 5G and sensors streaming, the key question is whether these scheme owners are able adapt to recreate service value or will they become obsolete entities? Will remote surveillance be able to feed data, documents and images to independent auditing hubs using machine learning feeding alerts to technical auditors? Will compliance be defined and managed via data transparency within the food supply chain coupled with algorithm compliance alerts with predictive analytics and thus deliver the retailer’s expectations and form the base for consumer stories?
Let’s not forget – the car industry had a single-minded faith in the combustion engine until a Tesla arrives.
By Stephen Cox
May 10, 2022
