Jun 9, 2009

Safer Foods Take Closer Cooperation

Responding to a rising tide of safety problems, the U.S. Food and Drug Administration has just announced that it plans to start coordinating with peer agencies in other countries, where some of these problems have originated. A spokesman says, “For us to do a better job at home, we have to do a better job with our counterpart agencies around the world.

The Associated Press reports that the FDA now has offices in Asia, Europe and Latin America, that the agency is “moving beyond border inspections” and back up the supply chain overseas.

It’s a sign of the times. Organizations must take more responsibility for assuring their own constituents about just what their disparate (and often distant) partners are doing. Increasingly, we are what we guarantee.

In a complex value chain, guarantees take cooperation. Just as the FDA is starting to realize it can’t do its job alone, so also must the manufacturers and retialers involved in the overall food industry. They must get more collaborative in how they share information, determine who is best qualified to perform specific safety-enhancing activities, and negotiating how much each activity is worth in the overall scheme of providing value to the end customer. Cooperation to this degree and of this importance takes more effort, new skills, and new-found diplomacy at the top levels of management teams across companies.

Let’s not be naive. There have been similar but cautionary situations where a company invested heavily in social benefits and received no recognition from customers for leading the charge. In the 1990s, Frito-Lay was first to reformulate its products for reduced cholesterol content. But even today when we think of high-fat foods, what comes first to mind? For many, its Doritos, Tostitos, Cheetos, and Fritos.

It won’t be any easier for brands to achieve competitive advantage by doing “the right thing” in safety. But branded manufacturers owe it not only to consumers but to themselves to try. Whether they want it to or not, the safety bar is rising. It’s an opportunity as well as a burden. And smarter cooperation within their value chains is one way for brands to prevail over retail private labels.

No comments: