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QUALITY MANTRA

The European Commission has formalised a third-party validation process through the European Food Safety Authority (EFSA) as its core enforcement mechanism. The EFSA independently advises the European Commission and the governments of member states on legislative actions needed to manage existing and emerging risks.

Cold chain infrastructure Without a cold chain, the rates of food deterioration and microbe proliferation accelerate, posing a serious threat to fresh food safety. In markets, at earlier stages of development, however, cold storage and transport are uncommon or even scarce. A cold chain is enormously expensive and takes time to put in place; hence, it only makes sense for retailers to unite in this effort. To improve cold chain development, governments must implement standards that have a sweeping effect on temperature control, thereby triggering seamless cold chain development along the supply chain and improving retailerdriven methods.

Sophisticated base for producers and suppliers A lack of finesse among the upstream participants in a supply chain opens the door to a host of fresh food safety risks, which no amount of infrastructure or regulatory enforcement can prevent. A sophisticated base of producers and suppliers requires two main ingredients: market price stability and an integrated supply chain configuration. Market price stability: Producers facing heavy market price volatility are especially eager to cut costs while maximising profit. Under such circumstances, they may knowingly break regulations and seriously impair fresh food safety in the process. To counter illicit practices, some players in Hong Kong and Japan have used contracted growth allotments, whereby retailers contract

with farmers for a regular supply of a fixed volume. This practice not only stabilises prices and provides producers with more security, but also helps eliminate producer control over supply. Integrated supply chain configuration: A structured supply chain achieves two components crucial for fostering a sophisticated base of producers and suppliers. First, it facilitates traceability of product back to source. Second, a well-integrated supply chain provides retailers and government officials with a means of monitoring and educating upstream participants in the supply chain. Much can be learned from the Japan Agricultural Cooperatives (JA), which has devised a unique structuring mechanism. By promoting grower registries and pesticide use documentation to achieve consistent traceability across Japan, from producers to government oversight bodies, JA also facilitated support to producers that included training & equipment sharing. Achieving this linkage took decades, but has greatly contributed to an integrated supply chain configuration that promotes higher

levels of traceability & productivity and, ultimately, a more sophisticated upstream base (Figure 1).

Aware and active consumers Poor consumer knowledge poses serious dangers to fresh food safety. Consumers commonly handle meat, poultry & fish, despite the hazards of microbe generation and negating any benefits achieved through temperature control. To some extent, this behaviour is cultural in nature. In India, for example, consumers prefer fresh products sold warm rather than cold – retailers could end up losing money by employing cold chain practices. While such attitudes can only be changed over the long term, they can nevertheless be changed. Japanese consumers used to select product, which is much like what Chinese consumers often do today, ie, handle loose product. Cold chain build-out and improved hygiene standards gradually changed consumer perceptions and, today, direct handling of meat before purchase is unheard of. The lesson for retailers is to give adequate care to consumers’ current perceptions while setting

Leafy vegetable example *

Product flow

Wholesaler model – China tier 2 city

Direct-farming model – Hong Kong

Third-party association model – Japan

Retailer

Retailer

Retailer

Suppliers

Wholesalers

Wholesalers

Farms/ Packing houses Individual households

* McKinsey market visits and interviews

Associations

Source: McKinsey analysis

Figure 1: Supply chain scenario in Asia

January 2011 | Modern Food Processing

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Modern Food Processing - January 2011  

‘MODERN FOOD PROCESSING’ is the leading monthly business magazine in India exclusively for the food processing industry. It covers the lates...

Modern Food Processing - January 2011  

‘MODERN FOOD PROCESSING’ is the leading monthly business magazine in India exclusively for the food processing industry. It covers the lates...

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