Safekeeping Canada’s reputation
The cost of not meeting government and consumer demands for food safety is high
This summer the federal government proposed new nutrition labels that would give Canadians more information to can make healthier choices. The proposal followed the introduction earlier this year of the Safe Food for Canadians Act, which imposed stronger safety rules and increased powers for food inspectors.
While this is all to the good for consumers, it also puts increased pressure on small and mid-sized food manufacturers, said Nancy Harris, executive vice-president and general manager Canada at software provider Sage North America.
A recent survey by Sage of 324 food-related business owners and executives found 50% of North American producers don’t know how they will comply to food regulatory standards. Health Canada’s new nutritional labels alone could take up to five years and thousands of dollars to implement.
Ali Kizilbash, who launched Mississauga, Ont.-based TWI Foods Inc., a specialty food company that produces a range of cake-rusks, cookies, cakes and frozen foods for the South Asian market, knows what it takes to meet regulatory and consumer demands for transparency. But he and Harris agree it can also reap benefits for companies that do it right.
Among the key findings in the Sage survey are: The typical spend on transparency efforts is between $20,000 and $26,000 a year. Almost half (48 per cent) of respondents cited compliance-related issues (such as labelling and lot tracking) as their top business challenge. While 72 per cent say transparency is im- portant to their customers.
“The risk of not meeting government and consumer demands for more information could result in fines and the decision on the part of consumers to opt for products that are more transparent,” Harris warned.
“That means being able to provide end-to-end ingredient and product tracking throughout the manufacturing and distribution process and automating inventory management to be able to put the information on food labels.”
However, when done right transparency can be a differentiator, building trust with customers, she said. “Consumers will become loyal when they know what’s in the products they consume and move away from those that aren’t about full disclosure.”
“The bar is always being raised and Canadian manufacturers have a reputation of being among the safest food producers, which is an advantage when we sell globally,” Kizilbash said.
Kizilbash credits his firm’s international footprint to its focus on maintaining quality. “We are trying to create a process that has all the necessary tools to eliminate any mishap, such as introducing a foreign element, or contamination.
“The second aspect is traceability. We are governed by certain minimum standards and manufacturing practices. As a manufacturer, you want to make sure you go above and beyond those standards, not only to make sure you are in compliance but to take your own initiative to ensure the consumer gets the best product,” he said.
TWI Foods employs Enterprise Resource Planning software to track, record and monitor all of the company’s key operational areas providing a clear picture and map of all raw materials/ingredients, when, how and who is using it. The final product also has its own coding. “If there is an issue, we can trace down when the problem occurred, how it affected the final product and who was working,” Kizilbash said.
“It’s all about traceability and transparency. Our system creates a triangle of linkages between purchasing raw materials; mixing those ingredients to make a product; selling that product. … so when there is a problem you can quickly learn whether it was an internal or external issue so you can best address it.”
The move to automate traceability and transparency led to an unexpected benefit: a more skilled labour force running those systems. “Compliance and transparency is not a challenge, it’s an integral part of our DNA,” Kizilbash said. “It’s the only way to do business.”
It may also have helped TWI Foods earn a berth on the 2014 Profit 500 ranking of Canada’s fastest growing companies.
Sage’s Harris offers a few key tips on building compliance and transparency into operations: She recommends you understand what’s required; speak with peers and learn how they’ve approached automating these functions; and be proactive and use your network to navigate best-in-class solutions.
Canadians have a reputation of being among the safest producers