Economic Reasons for Embracing Food Safety

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The benefits of adopting food safety standards seem obvious. After all, who wants to help make the public sick or worse? Corporate boardrooms are also realizing that accepting food safety regulations is also economically profitable.

The obvious benefit is to reduce illnesses and deaths from food. E. coli, Listeria and Salmonella, for example, attract thousands of people every year and put hundreds in ancient graves. The ability to reduce epidemics through prevention and quickly find the source of contaminated food benefits everyone.

And the world is better at that. Much of the improvement is due to the government's focus. Recently, the food industry has been the subject of intense political scrutiny and legislation is emerging around the world to strengthen food safety regulation.

The Food Security Modernization Act (FSMA) passed in 2011 in the United States is a good example of the government's response to preventable epidemics through strict regulation. Of course, we will have to wait to see how much the FDA is implementing the FSMA to measure its effectiveness.

Change does not come easily. Some companies are reacting with an army of lobbyists claiming that the fees charged to them to support the implementation of the new legislation will increase costs and prices. But the public does not buy it and should not do it either. In the long term, companies in the food supply chain will benefit from lower costs and avoid legal problems by joining the FSMA and its brothers and sisters around the world.

Less contaminated food means fewer recalls, which means less waste, which all fall in the margins. As food suppliers implement and enforce standards (such as those referenced by the Global Food Safety Initiative – GFSI), costs will decrease as safety increases. Streamlined and consistent procedures, sanitized facilities, as well as rigorous risk analysis and control will reduce expenses while improving productivity.

There is also the often overlooked cost of fighting legal battles and paying for negligence. Food suppliers can save millions of dollars simply by eliminating these expenses. In addition to the moral imperative, the courts attach great importance to the negligence of the food industry. It is no longer acceptable to treat legal battles as a cost of doing business.

In addition, food suppliers must protect their brands. Having a good track record in food security is important in today's marketplace. By alienating buyers through bad publicity, a company and its products can quickly switch over. This is why large retailers like Wal-Mart have quickly adopted food safety and now require their suppliers to be certified to universal standards.

As the Borg say on Star Trek, "Resistance is futile". Food suppliers, processors, packers, distributors and retailers really have no choice. The improved regulations are here to stay. Whenever major epidemics occur, increased regulation and stricter enforcement are possible. To fight it is insane. Those who embrace emerging food safety standards and enforcement ultimately have access to larger markets and higher profits. Companies trying to avoid or mitigate this trend are an endangered species.


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