Wal-Mart Adopts Global Food Safety Initiative Standards

In the 13th century, the Magna Carta (literally “great paper”) changed the course of history, introducing the idea of constitutional rights for all citizens. In the 21st century, a carta no less magna—this one issued by retail giant Wal-Mart—is having an equally transformative effect on the food industry around the world, particularly in the United States. In 2008, in a letter to food suppliers and a press release to the national media, Wal-Mart became the first nationwide U.S. grocer to adopt Global Food Safety Initiative (GFSI) standards.

No reading between the lines is necessary. The message is clear: Food producers must adhere to the GFSI framework by the end of 2009 or stop doing business with the nation’s largest supermarket.

Wal-Mart has sent a wave through the entire industry, not just among suppliers who directly service the company. Food is a strategic growth engine for Wal-Mart and its impact on the grocery supply chain is immense. According to author Paul Roberts in his new book The End of Food, Wal-Mart takes in 21 cents of every food dollar spent in the United States.

We’d hasten to add that in its historic role as market maker, Wal-Mart’s embrace of GFSI will very likely be followed by other major brands with supersized market clout that are watching and preparing to follow suit. The adoption of GFSI safety standards can’t be far away as everyone scrambles for the other 79 cents of America’s food dollar.

Benefits of Standards

The movement toward a more repeatable set of best practices, accepted across the industry and regulated by independent third parties, is a good thing. For years, suppliers have been dealing with disparate second-party auditing programs, choosing them primarily based on the preferences of their biggest customers. While individual plants and companies have achieved tactical levels of quality control using these methods, a lack of longitudinal uniformity has left the food supply ecosystem vulnerable to inconsistent protection. And that puts consumer safety—and your business—at risk.

In the United States, food safety is ostensibly regulated by the states, with general but nonbinding guidance from the United States Department of Agriculture and the Food and Drug Administration (FDA). The closest thing to a national standard is the FDA Food Code (http://www.foodsafety.gov/ ~dms/foodcode.html), which has been adopted—though not uniformly—by 48 states, with inspections performed by local auditors who themselves are not certified or regulated.

The decentralized nature of the system, and the daily pressures that suppliers face to stay in the good graces of their customers, has given rise to at least a dozen private second-party auditing schemes used by various suppliers and manufacturers. The same scenario has played out in Europe over the past 10 years, where food suppliers in the European Union grappled with upwards of 50 different auditing schemes before coalescing around the GFSI standards.

There are simply too many schemes with too many variables. The standards situation has become entirely too spread out at a time when the global supply chain is becoming more interdependent. One bad apple can literally poison the whole barrel. Just think about the domino effect of the current Chinese melamine scandal. The term “current” belies the fact that the problem first erupted two years ago in the pet food industry. More recently, in a number of widely publicized cases, the same substance has caused human illness and death and has triggered vigorous regulatory reaction across the globe.

This isn’t to say that GFSI or one standard in particular would prevent such a problem. But the less uniform the preventive measures are, the more frequent, damaging, and long-lasting the problems will be. What matters is that, collectively, we achieve the fundamental principles of standardization:

• consistency (the auditing procedures are the same in every facility);
• accountability (clear documentation, control points, audit trials); and
• portability (a manufacturer understands the exact meaning and value when a supplier claims to be certified to a particular standard, and vice versa).

The GFSI Framework

Meeting GFSI specification in the United States involves complying with one of four existing standards:

• British Retail Consortium (BRC) Global Standard for Food Safety, which is owned by the BRC (http://www.brc. org.uk/standards/default .asp);
• International Featured Standards (IFS) International Food Standard (www.food-care.info), which is owned by the German Retail Union (HDE) and France’s Federation of Commercial and Distribution Companies (FCD);
• Safe Quality Food (SQF) 2000-Level 3 standards (www.sqfi.com), which are owned by the Food Marketing Institute; or
• Dutch Hazard Analysis and Critical Control Point (HACCP) standards (www.foodsafetymanagement.info).

Each of these standards has its own history and unique set of auditing protocols. Not surprisingly, the value of each approach varies from company to company. A grain supplier with a small number of major U.S. cereal manufacturers might find one standard a good fit; a fruit supplier to a multinational snack company may determine that a different program is more relevant.