Wal-Mart's food safety efforts yield lower costs, fewer recalls
June 3, 2013
by Monica Watrous
BENTONVILLE, ARK. — Proactive, not reactive.
That’s the philosophy behind food safety at Wal-Mart Stores, Inc., which in 2008 became the first national grocery chain to require suppliers to comply with Global Food Safety Initiative (G.F.S.I.) standards.
“Because of our size and the scale of our global footprint, we are the largest buyer and seller of food in the world,” said Natalie Dyenson, senior director of supplier food safety for Wal-Mart, during a May 30 webinar hosted by GE Capital. “And this designation comes with a really important responsibility for being a good corporate citizen — to our customers, to provide safe and affordable food; to the planet, to provide safe, sustainable food; and of course to the industry, because the decisions we make can have a significant impact on the food industry.”
Wal-Mart imports approximately 60% of its fruits and vegetables and 80% of its seafood.
“Hazards can be introduced and exacerbated at any point in the supply chain between harvest and consumer, and as a result, we have to rely on food safety in other countries on our imported food as well as the food safety we have here,” Ms. Dyenson said.
The G.F.S.I., which was launched in 2000, requires food suppliers to complete factory audit certifications against one of its internationally recognized benchmarks. Wal-Mart found that requiring suppliers of its private label and other food products, including produce, meat, fish, poultry and ready-to-eat foods, to become certified against G.F.S.I. standards would not only ensure protection and confidence in the food supply, but also would reduce the number of audits and associated costs.
“Although Wal-Mart along with every other retailer and food service company were sourcing from essentially the same group of suppliers, every company had its own food safety audit requirement, which created a whole host of problems,” including redundancy, confusion, inefficiency and high costs, Ms. Dyenson said.
“Having a harmonized standard is really the only way we will be able to ensure consistent application of a standard around the globe,” she said. “Also by recognizing a harmonized standard, suppliers are able to have fewer audits each year, allowing the food safety personnel to focus on actual food safety initiatives. And finally, obviously, if suppliers have fewer audits in the long term, then there should be a cost reduction for the entire supply chain through widespread acceptance of the G.F.S.I. program.”
Two years after full adoption of G.F.S.I. across its private label suppliers, Wal-Mart found through an internal study a 34% reduction in the number of recalls the company had executed across the same supplier base.
“For us, that means we weren’t pulling as much product from our shelves after our suppliers became G.F.S.I.-certified, that means mom has better confidence in the products she buys from Wal-Mart… and by not having the expense of as many recalls we could overall lower our cost of doing business.”
In early 2010, Wal-Mart expanded the program to any Wal-Mart-owned banner around the world.
“We know G.F.S.I. isn’t a silver bullet, and it’s not going to guarantee that we’ll never have a food safety issue,” she said. “But we do feel it’s an important step in ensuring our suppliers have a comprehensive prevention-based food safety management system, which reduces risk. However, for some products, we still feel there is a higher-than-acceptable risk for our consumers.”
For high-risk foods and ingredients, Wal-Mart uses a multiple-intervention approach to mitigate risks by implementing commodity-specific strategies. Wal-Mart requires that suppliers of products such as ground beef and deli meat have validated processes in place, in addition to G.F.S.I. certification and testing standards. For example, bulk deli meat suppliers must include an inhibitor in the formulation of their products to prevent growth of Listeria monocytogenes.
Additionally, Wal-Mart conducts risk assessments of its own business and has developed programs to communicate food safety expectations and simplify processes for its associates.
“Regardless of what we do, the responsibility for food safety is still a shared global responsibility, and every stakeholder from the growers and processors to regulatory, academia, retail consumers, even media have a very important role to play in ensuring a safe, affordable and sustainable food supply for generations to come,” she said.