Risk factors

Food safety

Food safety is a fundamental business requirement, and the sector is vulnerable to risks ranging from disease contamination to adulteration, mislabelling and fraud.

Key stats

67
%
Forty companies (67%), valued at $250 billion, have food safety management certifications recognised by the Global Food Safety Initiative (GFSI), which indicates compliance with international food safety standards.

The effective management of food safety is important not only to maintain integrity of food products and prevent foodborne illnesses, but it builds trust throughout the supply chain. Food recall events can cause serious illness and market disruption.They are also costly: the average direct cost of a recall to a food company is estimated to be more than $10 million. There are also many indirect costs, for example through litigation, lost sales, insurance premiums, brand deterioration etc.

One strategy to reduce food safety risks is to develop and adhere to effective food safety management systems, especially those that are certified to international standards.

We assess all companies on whether their facilities and supplier facilities are certified by a food safety scheme recognised by the Global Food Safety Initiative, the frequency of food safety audits, the corrective action rates, whether consumer-facing traceability technology is in place, and details of product recalls and market bans.

Results

  • 82% of companies headquartered in Europe and Russia have some level of certification, compared to only 57% of Asian companies.
  • Only two of four Chinese dairy companies have some operations certified by a GFSI-recognised scheme – significant given the melamine scandal of 2008.