Birkbeck research provides evidence of manufacturers seeing growth in sales and profitability as a result of achieving certification.
Quality management and auditing professionals often talk about the broad range of financial, economic and operational benefits that come from achieving formal certification in quality and safety standards.
However, demonstrating these wider business benefits through tangible data is sometimes easier said than done.
So it was interesting to see a study from researchers at the Department of Management, Birkbeck, University of London, which shows how food business operators (FBOs) benefit from food safety certification.
They surveyed 451 food businesses from across Europe, North America, South America, Asia Pacific, the Middle East and Africa that had achieved food safety certification from BRCGS, a long-established company whose auditors provide a third-party certification for both the food and non-food sectors.
Prior to this study, there has been a lack of hard evidence on the economic and operational benefits to either certificated FBOs or in the wider supply chain.
As expected, the results showed that the primary motivation for certification was food safety, with 80% of respondents claiming that certification improved production and distribution of safe food, and 40% having seen a reduction in food recalls.
However, they also reported significant additional business benefits, with 55% of respondents having achieved increased sales and 28% reporting increased profitability following certification.
Writing in the executive summary, Dr Ray Lambert, Independent Consultant and Associate Research Fellow at Birkbeck, and Dr Marion Frenz, Reader in Management at Birkbeck, say: “There is a common view that there are benefits to FBOs that are certificated, as well as to brands or retailers that specify them within their supply chains. While these benefits are well publicised, prior to this study, there has been a lack of hard evidence on the economic and operational benefits to either certificated FBOs or in the wider supply chain.
“This research seeks to redress this lack of evidence by using internal and external datasets to identify the value of certification for certified FBOs, the wider supply chain and on safer food for consumers.”
According to Lambert and Frenz, empirical evidence from the research indicates that certification to BRCGS standards “generates extensive and positive business impacts for suppliers, on a scale greater than might have been expected in the light of previous research”.
They add: “This is more notable as the standards have primarily been developed to ensure the production and distribution of safe food, and not with the objectives of business growth, profitability, operational efficiency and innovation.”
Seventy per cent of respondents stated that changes in production methods required for certification had led to efficiencies and greater productivity. Meanwhile, certified businesses reported 7.5% average sales growth and 6% average increased profitability.
Growing market for food certification
The study points out that several of the leading food safety standards have been developed under the leadership of consortia of major retailers – BRCGS in the UK, IFS in France, Italy and Germany, and SQF in the US. A further stage has been the formation of the Global Food Safety Initiative to provide benchmarking of the operating criteria for private standards. ISO has also published its ISO 22000 food safety standard, which was intended to offer an alternative to multiple audits of suppliers by brands.
Lambert and Frenz point out that the global food certification market is forecast to grow because of its applicability in a wide range of food products, increased health and ethical consciousness among consumers, and more complex supply chains. As a result, food manufacturers and suppliers are actively seeking ISO 22000, BRCGS, CQF, IFS and ‘free-from’ certifications.
BRCGS says its food safety standard is used by FBOs at 30,000 locations in 130 countries, impacting more than US$800bn of food retail sales.
Read our Knowledge Online article about the Global Food Safety Initiative.
Download the full study: The economic impact for manufacturing sites operating to BRCGS certification.