Safety First

Jenny McTaggart

2/5/2016

A critical supply chain issue is engrossing every food retailer in the United States, regardless of where their stores are located, what type of customers they’re serving or what they’re charging for a gallon of milk: That issue is food safety.

Thanks in part to the sweeping, potentially culture-changing legislation coming from the Food Safety Modernization Act (FSMA), along with consumers’ growing taste for produce and other better-for-you fresh food, mom-and-pop retailers and national chains alike are paying more attention than ever to the safety of their perishable products.

Meanwhile, with the unprecedented number of health scares that bedeviled popular Tex-Mex restaurant chain Chipotle in one year (2015), all executives in the food business are closely studying the best ways to handle such crises and, more importantly, how to prevent them in the first place.

Truth be told, it seems virtually impossible to eliminate all food safety outbreaks, but that won’t stop retailers from doing everything in their power to try. Across the country, retailers are investing in training and education efforts to help their employees get up to speed on FSMA’s new recordkeeping requirements, while trading partners are viewing their supply chain efforts in a more collaborative manner to better ensure visibility. At the same time, new technology is hitting the market at a rapid pace to help grocers deal with all of these issues.

“With 100 percent of the nation’s supermarkets focused on perishables, food safety continues to maintain its position as the second-leading factor impacting food retailers’ businesses in 2015,” notes Hilary Thesmar, VP of food safety programs at the Food Marketing Institute (FMI), in Washington, D.C. “And with the U.S. Food and Drug Administration’s release of the most influential food safety regulations in 70 years, food retailers have reassessed their food safety plans and directed new resources, talent and strategies for compliance.”

Underscoring the significance of FSMA, Thesmar and other leaders will be on hand this month to discuss the legislation during the industry’s Trading Partner Alliance Supply Chain Conference. The annual show, being held this year in New Orleans, is organized by FMI and the Grocery Manufacturers Association.

Food Safety ‘Deeply Rooted’ at Wegmans

Another company that will be presenting on the topic of food safety at the conference is Rochester, N.Y.-based Wegmans Food Markets. Wegmans has been at the forefront of food safety efforts since long before talk of FSMA, so the company is in a good place to help educate others in the industry.

“Food safety is deeply rooted within all aspects of our supply chain,” Mary Ellen Burris, Wegmans’ SVP of consumer affairs, tells Progressive Grocer.

According to Burris, fresh produce is the company’s greatest area of concern. To that end, the regional retailer has been highly supportive of the Center for Produce Safety, a Woodland, Calif.-based group that makes grants to streamline research on fresh produce.

Wegmans is also addressing food safety via “aggressive training, assessment and oversight,” notes Burris. “We have active engagement in the industry through our president [Colleen Wegman] chairing FMI’s board food safety committee, and our CEO [Danny Wegman] co-chairing the safety pillar of the Consumer Goods Forum, which houses the Global Food Safety Initiative [GFSI],” she says. In addition, Wegmans’ VP of food safety and quality assurance, Gillian Kelleher, is on the board of GFSI.

Of course, Wegmans has been particularly focused on FSMA for the past few years. “We’re learning all we can, attending training sessions and partnering with other food retailers,” explains Burris. “The lead on this is our chief food scientist, Kathleen O’Donnell, with a steering committee of senior managers most affected by FSMA. Among them are our supply chain QA manager and team.”

In another important area of food safety, Wegmans has long made product recalls a key piece of its communications with shoppers. “We were one of the first retailers to make phone calls to customers whose purchase records show they have bought an affected product,” says Burris. Just last month, Wegmans issued a recall of 1,125 pounds of marinated chicken products sold under its own brand, because the items were inadvertently produced without the benefit of federal inspection from the U.S. Department of Agriculture’s Food Safety and Inspection Service (FSIS). Wegmans placed automated phone calls the morning of the recall to alert shoppers who had purchased the product.

Supply Chain Transparency

Many other retailers are increasing their food safety efforts via specialized technological tools as they gear up for FSMA compliance. Last summer, Keasbey, N.J.-based retailer-owned cooperative Wakefern Food Corp. joined forces with ICIX, a supply chain risk management company based in San Francisco, to better collaborate with food manufacturers and manage private label requirements as part of its food safety and compliance program.

“We implemented ICIX to drive transparency into our supply chain and assist us with a single source of information for supply chain compliance,” said Mike Ambrosio, Wakefern’s VP of quality assurance, at the time of the announcement.

More recently, Midwestern retailer Lund Food Holdings selected PAR SureCheck Advantage Solution, from New Hartford, N.Y.-based ParTech Inc., to support the food safety program at all of its Lunds & Byerlys grocery stores. The Edina, Minn.-based retailer said it would deploy PAR’s SureCheck Advantage, Software-as-a-Service (SaaS) solution for food safety and checklist management across its 28 locations, in an effort to replace its traditional “pen and paper”-based processes.

FMI’s Thesmar says she expects more companies to invest in smarter technologies as they prepare for FSMA compliance. “The Food Safety Modernization Act is challenging to implement, due to its complexity and rigidity, so FMI is invested in smart technologies that will help companies streamline data and ensure the most fastidious ways to create compliance checks and balances all along the supply chain,” she explains.

Specifically, FMI endorses ReposiTrak, a compliance management track-and-trace tool.

According to Thesmar, “There are significant opportunities for collaborative business planning between manufacturers and grocers regarding the Food Safety Modernization Act.”

Going forward, rules that impact both manufacturing facilities and retailer distribution centers — albeit in different ways — will require better communication between trading partners.

“We are invested in smart technologies that will help companies streamline data and ensure the most fastidious ways to create compliance checks and balances all along the supply chain.”
—Hilary Thesmar, Food Marketing Institute

“We were one of the first retailers to make phone calls to customers whose purchase records show they have bought a [recalled] product.”
—Mary Ellen Burris, Wegmans

Lessons From Foodservice

Chipotle has received more than its fair share of news headlines over the past year, as the restaurant chain that built its brand on fresh ingredients has dealt with numerous, sometimes unrelated food safety scares. As this issue of Progressive Grocer went to press, Chipotle had committed to hosting a Feb. 8 national team meeting focused on food safety at all of its nearly 2,000 North American restaurants (the restaurants were scheduled to open to the public later than usual that day).

It remains to be seen how the fallout will impact the future of the Denver-based company, but for the time being, all players in the restaurant industry are taking an even closer look at food safety, with the aim of preventing such disasters. Many of their concerns mirror those in the retail trade: Consumers continue to desire fresher and locally sourced ingredients, while the Food Safety Modernization Act (FSMA) raises new concerns about traceability.

PG recently caught up with several experts at HAVI Global Solutions, a restaurant management consulting firm in Downers Grove, Ill., to discuss food safety in the restaurant industry, and to see whether some of their best practices might be shared with grocery retailers. Here’s what they had to say:

Progressive Grocer: What are the greatest challenges in maintaining food safety in the restaurant cold chain nowadays?

Eric Pfeiffer, senior director, supply chain integration:

“The greatest challenges are around creating effective mechanisms to identify and mitigate risks of food adulteration. This means putting systems and processes in place that trace product from farm to fork to ensure quality standards are met. Additionally, the regulatory environment has evolved to put requirements in place to report instances of foodborne illness.”

Steven Rodgers, VP, business development - analytics, supply chain & promotions: “Visibility, traceability and capacity management are all key challenges.”

Scott Saunders, SVP, supply chain services: “There’s a major push from consumers for restaurants and food retailers to provide fresh products, which include local ingredients. Providing those local ingredients exponentially exposes a cold chain to risk by rapidly onboarding many new suppliers into the supply chain. The process of regularly qualifying new suppliers and ensuring they are compliant to a predetermined set of standards is difficult and time-consuming. In addition, when problems do arise within the cold chain, it becomes increasingly important to track product movement, define the root cause of an issue and address it quickly.”

PG: What food safety lessons/best practices might supermarket retailers pick up from the foodservice industry? What best practices should they keep in mind if they decide to add more foodservice options in their stores?

Rodgers: “I think there are best practices to be observed among foodservice providers regarding issues related to available storage, especially cold and frozen storage. Based on their square footage and limited capacity, restaurants deal with this issue on a daily basis, and some have instilled processes and applied technology to best manage these constraints, including inventory monitoring, as well as demand-and-supply planning processes. With grocers’ larger capacities and potentially longer shelf life for their core perishable goods, they could benefit from restaurants’ best practices in order to avoid waste and keep product fresher longer.”

Saunders: “Best practices we see in the foodservice space relating to cold chain include a standard of instantly putting delivered products away into the freezer or refrigerator to ensure minimal exposure to noncompliant temperatures. Another best practice is inventory optimization. This means only moving inventory when there is a pre-determined demand trigger, which ensures product is not moved to the wrong place or at the wrong time. Finally, using a robust process to qualify suppliers, then working closely with them to ensure compliance to set standards, is best practice among many foodservice providers.”

PG: Do you anticipate that the changes coming from the Food Safety Modernization Act will impact the restaurant industry in a major way? Why or why not?

Rodgers: “Yes. While foodservice will be expected to comply with the act, a more pressing issue is related to the brand damage resulting from food safety issues. A highly visible foodservice company has lost more than 40 percent of its market cap since mid-October because of contamination/food safety issues. Many other brands are as concerned at all levels that they could face a similar challenge, and that they have very limited capability to address traceability from the consumer back to the supplier of their goods.”

Pfeiffer: “Yes, the implementation of traceability requires investment in both data integration and the systems that create and store that data. All suppliers need to upgrade capabilities to label pallets and create advanced shipping notifications (ASNs) that enable lot-level traceability. We’ve seen some restaurant chains that then need to upgrade their distribution network capabilities to accept that data and maintain lot-level traceability through to specific restaurant deliveries. This impacts not only the need for more advanced warehouse management systems at distributors, but enhanced business processes that ensure what gets picked in the distribution center ends up in the right restaurant. For some distributors, this is complicated for high-volume items that are bulk-loaded for multistop distribution runs.”

Saunders: “Many food and foodservice providers will start to focus on multitemperature freshness issues. Different foods need to be kept at different temperatures — frozen, refrigerated, ambient — for maximum freshness and taste. Companies will need to figure out how to consistently and reliably ensure that, which may require special packaging and impact how food is displayed in the store, or how it is stored and moved.”