Food Safety: Global Trends webinar for ECR Asia

Food Safety Trends John Keogh

Global Advisor & DirectorProduct and Consumer Safety

GS1 Global Office

30th January 2013

Agenda

Key Trends – Consumer Goods Forum Trends related Food Safety What we know about….

Global pressures Consumer pressures Regulatory pressures Industry pressures

Who produces food? Global Implications of Food Safety regulations Summary

Possible tactics to consider

Conclusions

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Who am I?

- Live in Toronto

- Global Advisor at GS1 Global Office Brussels

- Focused on Product & Consumer Safety

- Advising Industry, government and inter-governmental agencies

including EU, OECD, ASEAN and APEC

- Started life in Ireland in a family retail business

- Lived in Holland for 10 years

- Build high performance supply chains across Europe

- Re-engineered IT and supply chain systems and processes

- Past 4 years extensive advisory work in Asia

…..Very passionate about consumer safety…….

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ECR AP Council

SustainabilityEmerging Industry Trends

People Excellence

Health and Wellness

Driver for today’s webinar

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Operational Excellence

Identify trends of most interest to ECR:

• Consumer technology access• Supply Chain info. availability• Increasing concern for

Product Safety

Collate and disseminate best practice information and engage ECR members in an open dialogue

Emerging Industry Trends Committee approach: Our job will be to keep our collective view of the emerging trends current, and to help ECR members exploit the trends through best practice information, and shaping projects for us to work with other ECR Committees to implement.

The 12 Global Trends 2020 Consumer Goods Forum - Future Value Chain

Increased Urbanization

Aging Population

Increasing Spread of Wealth

Increased Impact of Consumer Technology

Adoption

Increase in Consumer Service Demands Increased Importance

of Health and Wellbeing

Growing Consumer Concern about Sustainability

Shifting of Economic Power

Scarcity of Natural Resources

Increase in Regulatory Pressure

Rapid Adoption of Supply Chain Technology

Capabilities

Impact of Next-Generation Information

Technologies

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34

5 6

78 9

1011

12

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Source: Future Value Chain 2020, TCGF, Capgemini, HP, Microsoft http://www.slideshare.net/koen.klokgieters/2020-future-value-chain-presentation

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What to do with this information?

6http://www.slideshare.net/koen.klokgieters/2020-future-value-chain-presentation6

Let’s look closer at 2 of these Trends related to Food and Public Safety

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2020 Trend 6

Increased importance of health and wellbeing

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2020 Trend 10:

Increase in Regulatory Pressure

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What we know about Food Safety:

Food Safety is highly visible

While Food Quality is improving, so is detection technology 10

Globally there are 1 billion cases of food borne illnesses resulting in an estimated 2.2 million deaths

USA : 48 million cases and 3,000 deathsAustralia : 5.4 million and 120 deathsEU : 45.5 million cases…..3,000 deaths ??

All figures = annual

Sources: UN, US CDC, WHO, APEC

What we know about Food Safety:

Food Safety is highly visible

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Let’s take a closer look at the growing pressures……

• Global in nature…• Regulatory…• Consumer…• Industry…

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What we know about Food:

Global pressures are increasing

Population to increase by more than 30% to 9.2 billion by 2050

Demand for protein rich

foods increasing

Urbanization increasing to 70% from

49% - will drive changes in supply chain structures

FAO – World Bank warning

Only 10% of demand can be met with NEW cropland

Only 20% from existing cropland and existing

technology

70% must come from technology and policy

innovation

Rising incomes = rising demands Food production must increase 70-

100%

Cereal production will rise 30% to 3

billion MT

Meat production will rise 40% to 470

million MT

Pressures are for more foods with shelf life risk

including dairy, fish, meats, fruits, veg.

Protect the Blue Economy

We will need two planets to feed the earth

by 2050

50% of all foods produced is not

consumed

Sources: Various, UN, APEC PPFS 13

What we know about Food:

Protein demand in Asia: Meat & Eggs

Source: FAO SOFA, 2009 14

What we know about Consumers and Food:

Demand for information is increasing

Is this healthy?

Does it contain peanuts or other

allergens?

Is the packaging recyclable?

Was this grown organically?

Are the employees treated well and paid

fairly?

Does this company act responsibly

toward shareholders?

Is the farming and harvesting done

sustainably?

Could I get this less expensively on the

Internet?

Do they test their

products on animals?

Can I get more information online?

?????

Is this safe for me?

Can I trust the product claims?

Is the product genuine?

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What we know about Regulations and Food:

Regulatory pressures are increasing

Push more information to consumers

Is the packaging compliant? Was this product

produced to food safety standards?

Are products traceable to the

source?

How do we enforce policy in increasingly complex and

global supply chains?

Can we feed our nation?

Was it produced safely and according to

regulatory requirements?

Can we protect and alert citizens on

unsafe products?

Price stability?

Enforcement with reduced resources?

BIO-Fuel Diversion

National interests versus Foreign interests (Google “land grab in

Africa”)

Foreign ownership?

GMO?

Reduce Spoilage

Build Capacity

Technology Transfer

APEC Farmer Days

Natural Disaster Resilience

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What we know about Industry and Food:

Industry pressures keep increasing

Push more information to consumers

Does the product contain allergens?

Is my packaging, labeling and claims

correct?

Can we consistently

produce to food safety

standards?

Are my products really traceable?

My perishable

products are being held

up at customs

Can I guarantee supply of raw

materials?

Can I protect my brand from recall

impact?

Can I protect and alert my

customers about unsafe products?

Are our products at risk of counterfeit or cheaper substitution? (Ireland’s

horsemeat in beef burgers?)

Pricing stability?

The perfect tomato !

Maintaining Supplier Trust?

Keeping Consumer

Trust?

How to implement a food safety

culture?

Multiple food safety standards

How do we keep track of national and regional

regulations?

Reduce spoilage

Efficiency

Non-Cohesive Regulations

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Globalization of the food chain increases pressures

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What we know about Food Safety:

Why did the Chicken cross the border?

That’s the reality of today’s business…….

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What we know about Food Safety:

Globalization increases pressure…..

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Traceability in the food chain is complex

Source: Gemini 03/06

Where do Food Safety Incidents occur?

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Does the consumer have a role to play in food safety?

What role should industry play ?

What role should government play ?

Is there a role for early education on food safety?

What we know about Food Safety:

Where was contaminated food consumed?

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Mistaken Identity…..an issue with food safety and globalization…..

The strange case of the Cucumbers mistakenly blamed and recalled / destroyed……..and cost EU 200 million per week ………conclusion from German authorities…..”we need better traceability”

Key question:

Do we really have full chain traceability and the ability to effectively recall?

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Who Produces Food and where are the biggest challenges?

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Rank and Share of World Total

World’s Top Food Producers

RankPrimary

CropsVegetables Fruits Meat

Fish & Aquacultur

e

1China (18.7%)

China (50%)

China (18.8%)

China(26.6%)

China (33.4%)

2Brazil

(11.7%)India (8.6%)

India (11%)

US(15.4%)

India (5.3%)

3India

(11.5%)US (4%)

Brazil (6.8%)

Brazil (8.2%)

Peru (5.2%)

Source: FAO Statistical Database; 2008 data.26

Rank and share of world total

APEC’s Top Food Producers

Source: FAO Statistical Database; 2008 data.

Rank CountryPrimary

CropsVegetables Fruits Meat

Fish & Aquacultur

e1 China 18.7% 50.0% 18.8% 26.6% 33.4%2 USA 8.4% 4.0% 4.9% 15.4% 3.4%3 Indonesia 3.5% 0.9% 2.8% 0.9% 4.7%4 Russia 2.5% 1.5% 0.5% 2.2% 2.5%5 Thailand 2.1% 0.4% 1.5% 0.8% 2.7%6 Mexico 1.6% 1.3% 2.8% 2.0% 1.2%7 Malaysia 1.2% 0.1% 0.2% 0.5% 1.2%8 Philippines 1.2% 0.6% 2.7% 1.0% 2.3%9 Viet Nam 1.2% 0.9% 1.0% 1.2% 3.2%

10 Canada 1.1% 0.3% 0.1% 1.6% 0.8%11 Australia 1.0% 0.2% 0.6% 1.5% 0.2%12 Japan 0.5% 1.4% 0.6% 1.1% 3.5%13 Peru 0.3% 0.3% 0.7% 0.4% 5.2%14 Korea 0.3% 1.2% 0.5% 0.7% 1.7%15 Chile 0.2% 0.3% 0.9% 0.5% 3.1%16 New Zealand 0.1% 0.1% 0.2% 0.5% 0.4%

APEC total 44.14% 63.4% 39.3% 57.1% 70.6%27

Food Chain reality…..

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Report published January 2013: 50% of all food produced is wasted

In South-East Asian countries, losses of rice can range from 37% to 80% of total production

depending on development stage, which amounts to total wastage in the region of about

180 million tonnes annually.

In China the rice loss figure is about 45%

In Vietnam, rice losses between the field and the table can amount to 80% of production.

http://www.imeche.org/Libraries/Reports/Global_Food_Report.sflb.ashx29

Published by AAAS

H. C. J. Godfray et al., Science 327, 812-818 (2010)

Biggest Challenges:

Where does the Waste occur?

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Could a national food safety regulation have global impact?

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Food Safety Modernization Act

“I thank the President and members of Congress for recognizing that the burden that foodborne illness places on the American people is too great, and for taking this action.”

Margaret A. Hamburg, M.D.,Commissioner of Food and Drugs

Source: US FDA32

Food Safety Modernization Act

Source: US FDA33

Global Impact

The US Food Safety Modernization Act will have global impact

The US imports 15% of its food…….from 130,000+ registered foreign suppliers with more than 300,000 production facilities.

Source: US FDA

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Summary

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Food Safety is a complex and global issue.

Reviewing the 2020 trends more deeply within your organizations could help you define/refine strategic objectives and tactics…..we suggest

some tactics that could help uncover blind spots……

Global standards have proven to improve business outcomes, while helping to meet

regulatory requirements and reducing risk to consumer safety

Summary:Trends to Objectives to Tactics

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Trends – Objectives - Tactics

http://www.slideshare.net/koen.klokgieters/2020-future-value-chain-presentation 37

Future Value Chain Trend 11:

Rapid Adoption of Supply Chain Technology Capabilities

Can Global Standards Help?

Can Global Standards Help build trust?

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SUMMARY: TACTIC TO CONSIDER:

“Value Traceability” can differentiate your brand

supply chain

optimizationcompliance

branding

&

marketing

risk reduction

Reduced Risk

Optimized Assets

Increased revenue

Lowered costs

Delivering….

Effective Recall

SC Visibility

100% Traceability

Differentiation

Compliance

While compliance and risk reduction aspects can be critical, they do not encourage investments beyond the required minimum

FOCUS:

stay in business

FOCUS:

increase value

Value Traceability

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Rapid

Response

CASES

Early

Detection

Potential

Cases Prevented

DAYSource: WHO keynote: GS1 Hong Kong Food Safety Seminar 2012.

SUMMARY: TACTIC TO CONSIDER:

You can differentiate your brand through early earning and rapid response capability

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InformationWhat information is being usedand given ?

IdentificationHow traceable items are identified and coded ?

OperationsHow traceability works and how crisis are managed ?

ProceduresHow traceability is

acknowledged and documented?

Global Traceability

Assessment

SUMMARY: TACTIC TO CONSIDER:

A traceability conformance assessment can uncover critical blind spots

http://www.gs1.org/traceability41

• 16 cases of Salmonellosis reported in Usolie, Russia, including 13 infants, 1 child (age 4) and 2 adults

• Product sent to 24 regions in Russia

Russia

Belgium

Haiti

Congo

Mozambique

Burundi

Outbreak of S. Oranienburg in Russia linked to internationally

distributed powdered infant formula from Belgium

Charachteristics

• International distribution (Three continents)

• Shelf-stable product (+1 year)

• Vulnerable population (infants)

Good Traceability System allowed the producer to quickly identify the specific product and institute a very targeted recall (minimizing economic impact) quickly eliminated further exposure (protecting public health)

Source: WHO keynote: GS1 Hong Kong Food Safety Seminar 2012.

SUMMARY: TACTIC TO CONSIDER:

“Value Traceability” can differentiate your brand

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SUMMARY: The Way Forward

A short checklist to consider…

Q: Is your organization aware of the food safety / labelling requirements for your target markets?

Q: Are your products traceable upstream and downstream?

Q: Does your external “digital” product information match your master data records?

Q: Have you considered the value of auditing your public data (product master data) on commonly available mobile scanners?

Q: Have you completed an annual mock recall to test processes and functions?

Q: Is you master data synchronized with your trading partners?

Q: Is your organization aware of in-store innovation using databar to reduce spoilage?

Q: Are you aware of the full traceability conformance assessment ?

Q; Do you have full chain visibility and traceability

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Source: IBM analysis of 4,400KPI scorecards

550% less raw materials inventory

cover

2% higher supplier

service level

3,5% higher invoice

accuracy

21% shorter lead time

42% lower distribution

costs

35% less retail distribution center inventory cover

32% less out-of-stocks

SUMMARY: What we know about GS1 Global Standards:

Global Standards improves business results

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Conclusions:

..from the CGF 2020 Future Trends

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We are on a journey…..Adapt + Overcome = Progress….46

The IMPOSSIBLE is not always Impossible……..just DIFFICULT !47

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ECR Contact

Ivett Katalin Nagy

[email protected]

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Thank you!