Investing in Food Safety: How Much Does It Really Cost?

Over the years, I have given many speeches and spoken with countless companies, advocating for improved food safety practices. Sure, every producer wants to sell safe food for their customers. And no one ever wants a scandal. But when an owner of a small, local company – regardless of where he or she is -- needs to balance the pressures of making payroll, buying supplies and raw materials, and marketing their products, it is natural for a them to ask how much it will cost them. It’s the most common question I have been asked, and probably the hardest to answer. Maybe that’s because it isn’t the right question.

 At IFC, we believe strongly that food safety is a sound investment for our clients. In fact, we care so much about it that we have included Food Safety in our Sustainability Framework and Environmental & Social Action Plans for our agribusiness clients.  The relevant questions are how can we maximize business returns from investment in food safety and what can we do to minimize the costs.  Over the years, we have amassed a few tips thanks to our clients and specialists. Here are just a few:

1.  Your food safety strategy should be integrated with your company’s strategy. A specialist once told me that his Quality Department was respected, but no one really listened to them.  Food safety should not be a separate strategy, closed off in the Quality Department. That’s a waste of human resources. If a company expects to sell quality products – and who doesn’t? – then the Quality Department must be an integral part of the team.
2. Food Safety is an investment, not a cost. One CFO recently told me that his investment in food safety for his suppliers needed to at least double his money, and I agreed! But the only way you can know that information is if you are tracking the numbers. If you view Food Safety as a cost, then you will naturally fall into cutting corners. A scandal could be a huge cost – as we saw with Chipotle in the U.S. On the other hand, if you can track the benefits, you will see that better Food Safety can help bring in new clients (over $200 million in increased sales and counting for our clients alone!). Many of our clients have also seen reduced costs.
3. Set priorities and prepare a budget.  Food safety investment needs the same rigor as other investments. Determine important milestones and deadlines, calculate the desired ROI, and hold teams accountable. As with any investment project, meet periodically to ensure timetables are being met and the proper resources are being allocated. Split implementation into stages and manageable bits to allow for the changes to permeate through the operations at every level. As one client told us, a well-planned timetable can help you save time and prevent expensive do-over work.
4. Involve line workers to find innovative solutions. Depending on the certification your company has chosen, there could be creative solutions that don’t burn through precious cash. Chances are, line workers will be good resources to consult in order to optimize layouts that will deter cross-contamination, increase the rate of hand washing, and ensure hygiene on the production floor. Consider rewards for those who come up with innovations that improve safety while reducing costs.
5. Ensure regular communications between all departments, especially finance. Make sure everyone is looking for proactive ways to trouble-shoot potential issues before the project gets off-track. The most expensive changes are usually related to infrastructure upgrades and then training. In order to manage expectations, it is important to that the CFO understands that some costs will be non-recurring, yet some will be recurring (training, cleaning costs, lab analysis, etc). Non-recurring costs can be spaced out to optimize cash flow, rather than leaving them all to the end. More companies than I can count have had to delay certification audits because they did not have the resources to pay for infrastructure upgrades – these resources should be secured in the beginning.

Experience has shown us that the cost of improving food safety costs is actually up to you.

For more practical, money-saving tips, check out our guide Investing Wisely in Food Safety here