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Consumers and Foodborne Illness

Smaller Food Companies Gaining Competitive Edge

By Maria Fontanazza
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Consumers and Foodborne Illness

A recent survey gauged the revenue growth of the top 25 large food companies at just 1.8% versus small and mid-size food companies, which grew at an estimated 11-15% since 2012. Changing consumer preferences for healthier food, non-GMP, organic, gluten free, and fresh foods are presenting an opportunity for smaller companies, which have the ability to react faster and capitalize on consumer demands. In a Q&A with Food Safety Tech, Randy Burt, partner with A.T. Kearney, explains how consumer influence is changing the food landscape and impacting food safety.

Food Safety Tech: Are consumers favoring small and mid-size food companies over large food companies? If so, why? What factors come into play?

Randy Burt: Small and mid-size food companies are winning against larger food companies primarily due to their flexibility and innovation capabilities, according to A.T. Kearney’s recent report “Is Big Food in Trouble”. Consumer demands have changed and smaller companies have been much faster at offering products that align with where the consumer is today and is headed in the future.  Specifically, consumers demand more products that are free-from artificial ingredients/natural, fresh, local, offer, transparency in production practices and novel tastes and textures.  Companies able to hit key elements of those characteristics and communicating an authentic brand story are experiencing tremendous growth.

The start-up, fail-fast mentality embraced by many smaller firms allows them to test and refine products quickly without the set of formal, and time consuming, new product development processes typically required by large CPGs. Many small companies are introducing products to service a consumer need; those that resonate with modern consumer values are winning in the marketplace.  (Note that many small players are failing as well, but there are way more products being launched by food start-ups than there used to be.)

FST: What new pressures do companies face from consumers? How does this impact a company’s tactics in food safety?

Burt: Consumers today expect to know not just how their food tastes but also where it came from and how it was produced. More and more, consumers expect food companies to source food sustainably and treat labor fairly and animals humanely, while eliminating certain fertilizers, pesticides and artificial ingredients.

Food companies have and must continue to develop new food safety protocols and processes to address the changes in production required to meet these consumer expectations.

FST: Is FSMA having an effect on how larger food companies are approaching business decisions mentioned in the report (i.e., acquisitions of small companies, looking at emerging brands)?

Burt: FSMA is having a broad impact on the industry and the impact is probably felt more by the smaller start-ups than the larger firms.  It is an issue that is almost inversely related to the innovation challenge the larger firms face.

Larger firms generally are better positioned to comply with FMSA. The burden of FSMA is felt more heavily by smaller firms as they have food safety processes and protocols that are less mature as compared to larger organizations.

As larger food manufacturers evaluate acquisitions of smaller players, gaps relative to FSMA certainly are a factor due to the potential cost and liability issues, but we have not seen FSMA consistently be a major barrier to acquisitions, just an important piece of the overall set of considerations.

Burt will be speaking during the opening keynote address of this year’s GMA Science Forum on Wednesday, April 19 in Washington, D.C.

Dagan Xavier, Label Insight

Food Transparency Movement Driving Changes in Labeling

By Maria Fontanazza
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Dagan Xavier, Label Insight

Recently the Grocery Manufacturers Association (GMA) and the Food Marketing Institute (FMI) announced an initiative to reduce the amount of confusion that consumers experience regarding the “sell by”, “use by” and other date-specific labeling on food packaging. It is also part of an effort to reduce food waste.

The new initiative is completely voluntary, but GMA and FMI are hoping that retailers and manufacturers adopt the standard by the summer of 2018. It streamlines the labeling terminology to two simple phrases:

  • BEST If Used By”. Describes product quality, indicating the date by which the product may not taste or perform as expected but it is still safe to consume
  • USE By”. Applies to highly perishable products and/or products that have a food safety concern over a period of time that warrants a date by which the products should either be consumed or discarded

A variety of factors well beyond “sell by”/”use by” dates contribute to consumer confusion. The following Q&A is a brief discussion with Dagan Xavier, co-founder and vice president, customer intelligence at Label Insight on the impact of incorrectly labeling products (erosion of brand trust) and the challenge food companies face in providing transparent information on their products.

Food Safety Tech: How is the demand for transparency both from consumers and regulators changing the food product labeling landscape?

Dagan Xavier, Label Insight
Dagan Xavier, Label Insight

Dagan Xavier: Transparency sounds easy, but in reality, it is complex. For companies, managing compliance and consumer demands is not cut and dry.

Thankfully, brands and consumers are usually on the same page. But there are times when it’s not the case—and that causes trust issues. For one, brands need to use specific, compliant wording. That wording can sometimes be more complex than a preferred consumer-friendly phrasing. For example, USDA’s proposed labeling of GM-containing products refers to them as “genetically engineered.” Except, consumers are far more familiar with the term “genetically modified.”

Regardless of these nuances, regulations around transparency are in place to help consumers. The regulations set clear definitions about what products or ingredients can or cannot qualify for a labeling claim.

We currently live at a time where there is a general distrust of the food industry from consumers. Having strict regulations in place that add factual meaning behind claims is incredibly important. Meaningful and understandable claims, logos, and certifications are slowly beginning to help build trust back up from consumers.

FST:  What challenges are food companies facing in labeling their products?

Xavier: One of the biggest hurdles companies face in labeling is fitting as much information as possible on the package. Between mandatory components (like allergens, nutrients, ingredients) and desired content (marketing copy and images), something almost always gets left off. What gets left off? It tends to be sourcing facts, “Made in America” logos, and other data that consumers find valuable but rank lower on a brand’s priority list.

In reality, 100% complete product information is nearly impossible to fit within the confined space of most product packaging.

The good news is that according to a recent study by Label Insight, most consumers (88%) say they would be interested in accessing a complete set of product information digitally.

SmartLabel (an initiative by the Grocery Manufacturers Association) is an easy solution. SmartLabels save companies space on their packaging, while still allowing them to communicate all product information with consumers digitally.

Most consumers (79%) say they are very likely or somewhat likely to use SmartLabel technology if it was offered by a brand. 44% say they would trust a brand more if it participated in the GMA SmartLabel initiative.

FST: Related to labeling, what are the complicating factors when a company is producing organic, GMO-free, gluten free, etc.—especially when working with suppliers?

Xavier: Having a trusting relationship and open communication with suppliers is key.

Because regulations around organic and gluten-free are so stringent here in the United States, brands need to rely on their suppliers to have ongoing robust certification audits, inspections, documentation and renewal programs.

We expect regulations around GMO-containing products to follow suit.

For companies with dozens of suppliers, it can get tricky managing the documentation of certifications. This is especially complicated if suppliers are overseas and their audits are not delivered through the same certifying agencies that retailers or importers would like.

Adding logos and certifications to packages can be expensive and add risk to brands if a supplier falls out of compliance. In the end, it is important for both brands and suppliers to have robust documentation and a good communication channel. This ensures that all information on-pack is always the most accurate information for consumers and retailers.

Food Safety Culture Series: 2016 Outlook

By Maria Fontanazza
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In the final article in Food Safety Tech’s Q&A series on food safety culture, Lone Jespersen, director of food safety at Maple Leaf Foods, and Brian Bedard, executive director of the GMA Science and Education Foundation sound off on the development of food safety culture this year.

Food Safety Tech: Where are we headed in the food safety culture landscape in 2016?

The GMA Science Forum takes place April 18–21, 2016 in Washington, DC | LEARN MORELone Jespersen: I think we’re going down a path of standardizing or at least agreeing on a set of definitions for food safety culture. Some of this will come out of the GFSI technical working group on food safety culture. That will lead us to better guidelines for what the different components of food safety culture are. That’s going to be strongly science based and collectively agreed upon. I think we’ll see a lot of that work done in 2016.

I think we’re also going to see a greater focus on connecting food safety culture to organizational culture. Many organizations are looking at integrating food safety and quality assessments into their organizational culture assessments and I think for larger organizations this makes sense.

Lone Jespersen of Maple Leaf Foods debates food safety culture at the 2015 Food Safety Consortium.
Lone Jespersen of Maple Leaf Foods debates food safety culture at the 2015 Food Safety Consortium.

I hope we’ll get closer to having compared measurement systems and be able to publish work around that so we don’t fall into a trap of a fragmented and independent approach, but rather building on each other as we work [together] and have a common definition.

Brian Bedard: The measurement tools and the gap analysis for which these tools are being developed needs to be done. In terms of operationalizing and actually getting food safety embedded in companies, I would envision a roadmap that looks at a four-tiered framework of who the targets are for changing behaviors. That would be focused around senior leaders in an organization, mid-level managers, supervisors in operations, and at the fourth level, the operators on the plant floor. At GMA’s Science & Education Foundation, we have a group of companies investing in this to roll out a portfolio of training programs. We’re trying to consolidate them under the umbrella of food safety culture and dealing with the full spectrum, from entry level and plant operators through to senior leadership.

Embed Food Safety Culture. There’s No On/Off Switch

By Maria Fontanazza
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Experts cited management buy-in, employee satisfaction, and information sharing as the critical factors for success.

Food safety culture is not a program that is implemented at a company. It’s a living organism that’s either strengthened or weakened by the actions taken by an organization. “There’s no on/off switch,” said Lone Jespersen, director, Food Safety and Operations Learning at Maple Leaf Foods, at the GMA Science Forum held this week in National Harbor, MD.

Product safety and quality is a shared responsibility. However, fostering a positive environment in which employees embrace accountability starts at the top. “You need to have management commitment; then employee buy-in follows,” said Joseph Levitt, partner at Hogan Lovells US, LLP. “It’s a message people want to embrace.”

At Land O’Lakes, the company took a four-pronged approach to its food safety culture, focusing on a clear quality message and mindset, employee education and training, active leadership alignment and participation, and establishing effective metrics and objectives. Most significant to the company’s success was its ability to involve senior management and get their commitment to taking a product safety 101 course. Sara Mortimore, vice president, Product Safety, QA & Regulatory Affairs at Land O’ Lakes, advised the audience to take a one-on-one tactic when talking to senior management versus putting everyone together in the boardroom. Having that individual interaction with management members forces each person to commit to sharing perspectives.

Companies must focus on monitoring employee behavior and ensuring that employees feel motivated to have a positive impact on product safety and quality. It involves having a continuous improvement mindset versus complacency. Jespersen cited the antecedent-behavior-consequences model as a means to establish goals and metrics, define critical behaviors, and determine positive or negative consequences. Most important to the process is that a company keeps it foot on the pedal when improvements are being made, as a lack of consistency is what causes lapses in progress forward. She also pointed to the Food Maturity Model, a method she developed with industry stakeholders, as a guide for companies to measure employee behavior as it relates to food safety culture across an organization.

Jennifer McEntire Joins GMA as VP of Science Operations

McEntire currently serves as The Acheson Group’s vice president and chief science officer, focusing on supply chain risks and mitigation in the changing regulatory landscape and global food safety system.

The Grocery Manufacturers Association (GMA) has announced that Jennifer Cleveland McEntire will take over as the organization’s new vice president of science operations beginning March 3rd.

McEntire currently serves as The Acheson Group’s vice president and chief science officer, focusing on supply chain risks and mitigation in the changing regulatory landscape and global food safety system. Before then, she was a senior staff scientist and director and science and technology projects with the Institute of Food Technologists. This work allowed her to partner with the U.S. Food and Drug Administration, the U.S. Department of Agriculture’s (USDA) Food Safety and Inspection Service and the U.S. Centers for Disease Control.

“Product safety is the number one priority for GMA and its member companies, and Jennifer’s appointment is part of our continued commitment to strengthen our world class food safety practice,” says Leon Bruner, GMA’s chief science officer. “Her considerable expertise and experience will no doubt strengthen our scientific and technical capabilities as well.”

McEntire earned her Bachelor of Science (magna cum laude) in food science from the University of Delaware. This was followed by a Doctor of Philosophy from Rutgers University where she was also a USDA National Needs Fellow in Food Safety. Her academic research focused on Listeria monocytogenes.

“It is an honor and pleasure to join GMA, whose accomplishments and leadership in food safety are widely recognized,” McEntire said. “I look forward to working with my colleagues at GMA and its member companies to further strengthen the safety of our food supply chain, both here at home and abroad.”