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Food scares give push to new safety standards Add to ...

Food industry players have had no shortage of grim reminders recently of the damage a safety problem can do to public health - and to a company's bottom line.

The recall of cheeses and sandwich meats in the summer of 2008, prompted by a listeria outbreak that claimed 22 lives, was only the highest profile of a series of contamination incidents over the past several years.

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Others have involved chocolate bars laced with plastic, melamine-contaminated pet food from China, and salmonella-tainted peanuts, pistachios and spinach from the United States.

All of these scares have given added impetus to a scramble now underway among food industry players - everyone in the processing chain from grower to distributor - to meet stringent new safety standards that took effect worldwide last year.

Compliance is entirely voluntary, but as BDC Consulting Partner Bettie Johnston explains, it's often in a firm's best interest to get certified.

"It's driven by their customers," says the Winnipeg-based Johnston, who advises companies on how to obtain certification. "If they want to do business in international markets, they're going to need that certification."

Major buyers such as supermarket chains are increasingly demanding certification from their suppliers, even those doing business strictly within Canada, Johnston points out.

Meat, fish and poultry producers, the industry players considered most vulnerable to contamination and other health hazards, have long been inspected regularly by the Canadian Food Inspection Agency. There's also a patchwork of municipal and provincial food inspection systems.

But until the 2008 enactment of ISO 22000 - the new food safety norms of the Geneva-based International Standards Organization (ISO) - most food processers relied on a system of self-policing to ensure their product was safe.

The guidelines they used - known as HACCP, or Hazard Analysis and Critical Control Points - were developed in the U.S. food industry in the 1960s to ensure that the food sent on the first space missions was 100% safe. Those norms were then gradually modernized and adopted in countries around the world.

Now an updated version of these voluntary guidelines has been blended with the ISO's business management standards to create worldwide food safety norms that, for the first time, are subject to third-party verification.

Johnston manages a team of consultants who advise businesses on what they need to do to comply with the new standards. It's a process that typically costs about $30,000 in fees, depending on the size of the company and the industry involved, and takes 8 to 10 months.

On top of that, implementing the changes required to become compliant can sometimes entail significant capital costs for a company. It may even require construction of a new facility. So it's hardly surprising that businesses - especially smaller operations with a local focus - sometimes balk.

"They tell me, 'Why do I need to when my customers are not asking for it?'" Johnston says. "I say, 'What happens if they're not your customer anymore? They're not asking for it yet, but they could soon.'"

Once all the changes have been implemented, Johnston says, a business will often find that it reaps considerable savings, since costly but unnecessary procedures can sometimes be eliminated as a result of the audit.

Also, once major customers such as supermarket chains can rely on standardized third-party inspections, they can send fewer of their own inspectors to ensure a supplier is up to snuff. That works to the advantage to the company, Johnston notes, because every visit to sensitive areas of a food-processing plant increases the risk of contamination.

A BDC consultant generally starts with a "gap analysis" to determine where a company's current practices fall short of ISO food safety norms. To earn certification, a firm must document all cleaning and maintenance of machinery, the time and destination of all shipments and the expiry dates of the food involved, so that problem shipments can be quickly traced.

The most common problems Johnston's consultants run into involve those areas: traceability, cleanliness and maintenance.

Jim Hickson, owner of Sterling Press and Packaging Inc., a 40-employee food packaging business in Selkirk, Manitoba, used BDC's consulting services to help make his firm ISO 22000 – compliant - a process completed in June 2009. He has nothing but praise for the work of Johnston and her colleagues.

Complying with a separate set of ISO business management standards in 2000 allowed his firm to improve its margins, he says, and he is banking on similar benefits over the long term from the new food safety standard.

"Yes, it costs some money to go through this program," says Hickson, "but it's worth it, because it makes you examine procedures that are just habit things that add no value, and allows you to eliminate those inefficiencies. I have nothing but positive things to say about this experience."

John Wilk echoes the sentiment. The vice president of Supreme Pierogies credits HACCP approval with winning the confidence of giant customers like Costco. "To compete in the market, you need that edge. HACCP gives your clients the added reassurance that you're selling healthy and safe foods."

The Mississauga-based company also worked closely with BDC Consulting to help develop and implement a fully integrated system. "It's a very detailed and meticulous process. We appreciated having an external point of view to assess our production line and see where we needed to improve. You can't leave any stones unturned," says Wilk. "Once you've gone through the process, you know that you're meeting the highest standards for safety and quality systems. You're truly ready for an audit," he says.

Content in this section is provided in partnership with the Business Development Bank of Canada. BDC provides entrepreneurs with financing, venture capital and consulting services. To find out more go to BDC.ca.

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