There is a lot of uncertainty about what a “post-COVID-19” world may look like. For companies in our food supply system, there may be a convergence of two significant forces which are likely to lead to expensive losses within the food industry.
The first force is the almighty consumer, who was already fairly focused on food safety concerns prior to the pandemic. The post-COVID-19 food consumer – of both foodservice and retail-packaged goods – is likely to be hyper-vigilant, hyper-diligent, and hyper-sensitive regarding product safety in a re-opened up world. While there is no evidence that COVID-19 is transmittable via food or food packaging within the food supply chain to-date, consumers will nonetheless need to expressly hear and be convinced that the foods they eat arrive on their plate only after the most rigorous food safety measures have been applied. Purveyors of food will be even more hard-pressed to demonstrate – at least better than their competitors – that their food is unequivocally safe and that all measures have been taken to make it that way.
The second force is the inevitable decline in food safety management, efforts and culture throughout our food supply system. During the restrictions put in place as a result of COVID-19, regulators have relaxed food safety inspections and audits. Global Food Safety Initiative (GFSI) certification bodies have delayed onsite audits. Customer audits, too, have been delayed. Even in a “re-opened” world, these food safety inspections and audits will be less frequent and less omniscient – and therefore less effective – due to travel restrictions, diverted appropriations, and tightened visitor policies. In addition to nonexistent or less effective food safety audits, we should also expect to experience negative impacts from displaced or remote-working food safety management. There may be less direct supervision on the production floor, and fewer facility visits by food safety management. Couple that with the potential gaps in the workforce due directly to COVID-19 (either in worker infection or quarantine), or in “displaced focus,” with workers concerned about consequences of exposure to them and their loved ones.
A highly sensitive and focused consumer, coupled with a decline in food safety efforts and culture, will likely result in significant losses to the food industry in a post-pandemic world. Food safety incidents and product contamination events are more likely in this sort of environment, and the losses will include a “denser” and longer-lasting loss of consumer loyalty.
This is an expensive convergence of forces for the food industry. We want to make sure that food companies are prepared.
Gallagher offers a comprehensive analysis of your food safety and product recall risk, and how you currently address that risk. Such analysis examines your supplier approval process, your contracts or governing terms with suppliers and customers, your insurance program (including any Product Contamination/Product Recall coverage), and your crisis response and management protocols. It might include a multi-disciplinary table-top exercise – not a traceability or mock recall – that focuses on organizational response and cost-recovery options. Ultimately, the analysis helps to educate and optimize insurance buying decisions, contract negotiations or considerations, and most importantly, works to “best position” your company – from a cost recovery standpoint – for a food safety/product recall incident. We encourage you to give meaningful thought to your food safety management in a post-pandemic world, and how you can be best-positioned for it with help from our dedicated, professional risk management advisors.
This is an evolving risk that Gallagher continues to monitor through the CDC and the WHO. Please visit our Pandemic Preparedness page for the latest information.
The first force is the almighty consumer, who was already fairly focused on food safety concerns prior to the pandemic. The post-COVID-19 food consumer – of both foodservice and retail-packaged goods – is likely to be hyper-vigilant, hyper-diligent, and hyper-sensitive regarding product safety in a re-opened up world. While there is no evidence that COVID-19 is transmittable via food or food packaging within the food supply chain to-date, consumers will nonetheless need to expressly hear and be convinced that the foods they eat arrive on their plate only after the most rigorous food safety measures have been applied. Purveyors of food will be even more hard-pressed to demonstrate – at least better than their competitors – that their food is unequivocally safe and that all measures have been taken to make it that way.
The second force is the inevitable decline in food safety management, efforts and culture throughout our food supply system. During the restrictions put in place as a result of COVID-19, regulators have relaxed food safety inspections and audits. Global Food Safety Initiative (GFSI) certification bodies have delayed onsite audits. Customer audits, too, have been delayed. Even in a “re-opened” world, these food safety inspections and audits will be less frequent and less omniscient – and therefore less effective – due to travel restrictions, diverted appropriations, and tightened visitor policies. In addition to nonexistent or less effective food safety audits, we should also expect to experience negative impacts from displaced or remote-working food safety management. There may be less direct supervision on the production floor, and fewer facility visits by food safety management. Couple that with the potential gaps in the workforce due directly to COVID-19 (either in worker infection or quarantine), or in “displaced focus,” with workers concerned about consequences of exposure to them and their loved ones.
A highly sensitive and focused consumer, coupled with a decline in food safety efforts and culture, will likely result in significant losses to the food industry in a post-pandemic world. Food safety incidents and product contamination events are more likely in this sort of environment, and the losses will include a “denser” and longer-lasting loss of consumer loyalty.
This is an expensive convergence of forces for the food industry. We want to make sure that food companies are prepared.
Gallagher offers a comprehensive analysis of your food safety and product recall risk, and how you currently address that risk. Such analysis examines your supplier approval process, your contracts or governing terms with suppliers and customers, your insurance program (including any Product Contamination/Product Recall coverage), and your crisis response and management protocols. It might include a multi-disciplinary table-top exercise – not a traceability or mock recall – that focuses on organizational response and cost-recovery options. Ultimately, the analysis helps to educate and optimize insurance buying decisions, contract negotiations or considerations, and most importantly, works to “best position” your company – from a cost recovery standpoint – for a food safety/product recall incident. We encourage you to give meaningful thought to your food safety management in a post-pandemic world, and how you can be best-positioned for it with help from our dedicated, professional risk management advisors.
This is an evolving risk that Gallagher continues to monitor through the CDC and the WHO. Please visit our Pandemic Preparedness page for the latest information.
