A market approach to food safety and quality in Bangladesh

A MARKET APPROACH TO FOOD SAFETY AND QUALITY AT THE PROCESSOR LEVEL IN BANGLADESH A MID-TERM IMPACT REPORT FROM THE USAID FARMER-TO-FARMER FOOD SAFETY & QUALITY PROJECT (F2F FSQ)

NOVEMBER 2020

WHY FOOD SAFETY & QUALITY Land O’Lakes Venture37 (Venture37) believes that empowering producers and processors to follow best practices in Food Safety and Quality (FSQ) is the key to removing critical barriers to market access for agricultural products thus helping economies grow. Venture37 takes this approach under the USAID-funded Farmer-to-Farmer Food Safety & Quality (F2F FSQ) project in Bangladesh (2019 to 2022), a country in which FSQ has been elevated to the national agenda and is supported by an array of donor and commercially-led initiatives. F2F FSQ focuses on small and medium-sized partner agribusinesses by helping them to reduce incidences of contamination and to build the trust of domestic and export retailers.

Mid-term Project Impact F2F FSQ is a five-year project. Kicked off in 2018, we are halfway through implementation.

This report is to showcase the project’s unique approach and resulting midterm successes.

as well as no or low low cost advancements in their food safety practices, partner processors have already achieved marked success in market access, sales, resiliency and have become more self-sufficient.

Partner agribusinesses have reported greater customer satisfaction and ability to successfully market their products.

One of the key factors that has enabled early successes of the project is that in selecting our partners we work backwards from retailers and exporters to identify the small to medium sized processors in their supply chains that have a demonstrated willingness to devote resources to improve their food safety systems. This is illustrated by over $42,000 that partner agribusinesses have invested, in aggregate, in hiring of two dedicated Quality Assurance staff and infrastructure improvements following experts’ recommendations. At the mid-term point of F2F FSQ, the project has created food safety acceleration plans for seven processors based on the Global Food Safety Initiatives’ (GFSI) Global Markets Programme (GMaP) assessments, the framework F2F FSQ uses to identify non-conformities to international standards.. Because of hosts’ investments

This mid-term impact report organizes project successes into three broad categories: Safer foods for consumers, expanded market access and increased sales, and self-reliance and resilience to shock like COVID-19.

$42,000 IN PA RTN ER AGR IBUSIN ESS IN V ESTMEN T

Farmer-to-Farmer Food Safety and Quality : A Unique Approach Venture37’s small yet focused F2F FSQ project approach draws on two distinctive features. First, Venture37 co-implements the Bangladesh project with Land O’Lakes, Inc., a $15B premier agribusiness and food company with industry-leading operations that span the spectrum from agricultural food production to consumer foods. The Land O’Lakes, Inc. Quality Assurance team is made up of food safety experts with oversight of all Land O’Lakes brands, factories and commercial partners around the world. This team equips the F2F FSQ field implementation teams with leading industry practices, insights and networks of international food safety experts. This partnership has resulted in over 40% of all technical assistance being mobilized pro-bono from various Land O’Lakes, Inc.’s business units. Other expert volunteers are sourced from Land O’Lakes network of retailers, laboratories and suppliers across the U.S. A second distinctive feature is our use of the Global Food Safety Initiatives’ (GFSI) Global Markets Programme (GMaP) as the framework to assess processor facilities and practices, identify non-conformities to international standards and align our targeted technical assistance with GFSI benchmarked food safety certifications. GFSI certification projects are recognized by some of the world’s leading brands including Cargill, Coca-Cola, Danone, Mondelez, Nestle Pepsi-Co and Walmart.

At the heart of the project is sustainability, as the project is designed to be self-led, self-taught and breaks down the path from zero or minimal food safety measures to readiness to pursue accredited third-party certification into small, actionable phases allowing the business to make stepwise investments into their business on their own schedule.

Stronger and more compliant food processing companies create added markets for products targeted under other USAID investments, such as milk and meat, fruit and vegetables and staple grains. At the conclusion of our engagement with each processor we conduct an end-line assessment to gauge the processor’s improvement.

While the project doesn’t facilitate certification, it assesses certification readiness ensuring that the processor doesn’t waste resources on premature attempts toward certification. Practitioners have found that with some guided expert facilitation the likelihood of a business completing the project and reaching certification exponentially increases. Field staff and pro-bono experts coach and mentor host processors through the first few steps and ensure that they have the tools needed to become self-reliant as they continue their journey to FSQ continual improvement once they have graduated out of the project.

This report is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of Land O’Lakes Venture37 and do not necessarily reflect the views of USAID or the United States Government.

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S A F E R F O O D S | E X PA N D E D M A R K E T A C C E S S + I N C R E A S E D S A L E S

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SAFER FOODS FOR CONSUMERS

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COR R ECTED NON-CON FOR MITIES TO IN TER NATIONA L STA N DA R DS B Y PA RTN ER AGR IBUSIN ESSES

F2F FSQ’s host partners have been taking great strides toward improving the safety of products for consumers. In aggregate, partner processors have corrected a total of 43 non-conformities to the international standards laid out in the GMaP assessment tool. Basic infrastructure improvements often make the world of difference in food safety, eliminating contamination from pests, chemicals, bacteria, fungi, and heavy metals. Host agribusinesses have employed simple enhancements such as removal of unnecessary objects from processing areas, the addition of hand washing stations and stainless-steel sinks, repairs of deteriorating infrastructure and installation of

mildew resistant doors, windows, ceilings and floors. All of these represent quick wins that have a large impact on the safety of the product.

In addition to infrastructure improvements, partner agribusiness developed or improved cleaning, hygiene, pest management processing, recall and traceability processes that directly link to product safety. Traceability too is of vital importance to food safety, tracking a product through the process and enabling tracing back to a point of contamination if it occurs.

EXAMPLES OF SUCCESS Ag AGROFOODS, Ltd.

Solid Honey Honey production expert, Robert Owen, helped Solid Honey understand that its processed honey was at risk of contamination from pests and raw honey, which it kept in the same storage room. In response, Solid Honey has sealed the existing storage room to prevent entry of pests and began construction of a new

completely sealed room for processed honey storage. While the company hasn’t seen a direct translation of these enhancements yet to their bottom line, they can market their product with greater confidence knowing that it will not make people ill.

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Per capita consumption of meat and eggs is below the recommended level for proper nutrition in Bangladesh and poultry is a relatively affordable source of protein, but carries a high risk of contamination. F2F FSQ has been working with AG Agrofoods, Ltd., a vertically integrated halal chicken businesses to ensure a safer product for Bangladeshis by improving their food safety practices. The company considers food safety a very high priority and has

been implementing the simple but highly impactful practices recommended by the F2F FSQ food safety expert.

Small changes like using different color crates for different uses, removal of garbage from the facility in enclosed containers, and using plastic liners during processing to prevent leakage have not cost a great deal of financial resources but have made the product safer.

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EXPANDED MARKET ACCESS + INCREASED SALES Of the four processors F2F FSQ worked with in year one, three have increased their sales year-upon-year by an average of almost $50,000 despite the pandemic. One processor has successfully started up production. Internal survey results of the processors supported attribute sales growth to increased customer satisfaction with their products, improved marketing, reduction of spoilage and increased efficiency of processes.

EXAMPLES OF SUCCESS Parmeeda

Parmeeda, an online-based sales agribusiness providing animal and plant-based foods to consumers, realized improved food safety and quality practices would enable them to expand their client base. Using the GMaP tool, F2F FSQ helped them understand their gaps. Highly motivated to improve, Parmeeda has corrected nine non-conformities to meet food safety standards, including separating animal and plant-based foods, installing a temperature-controlled room and developing an internal monitoring system for hygiene. F2F FSQ assistance has also helped Parmeeda reduce losses, increase shelf life and create a more marketable label to increase their brand value to ultimately widen of their customer base. They saw an increase in sales of almost $74,000 from the previous year, which they attribute to F2F FSQ technical assistance.

Oggro Dairy

Oggro Dairy is a dairy farm in Bangladesh’s Gazipur district that produces, bottles and delivers milk to households. Thanks the food safety improvements spurred by two Land O’Lakes’ Quality Assurance Managers, Oggro secured a new order agreement to supply milk to the company Fresh Milk, increasing their annual sales by $45,471 since the previous year. Unfortunately, COVID-19 has disrupted operations for Oggro as it has for many food companies around the world, but the company’s improved sanitation processes will help supports the safe collection, processing, packaging, storage and transportation of milk allowing them to further diversify their customer base.

Aadi Honey

With the help of three F2F FSQ volunteer experts, Aadi Honey, a small-sized honey processor, has improved their honey production, marketing, and quality and safety practices in their facility at Mirzapur of Tangail district leading to an increase in annual sales from $144,578 to $166,766 from the previous year. Aadi Honey is now mapping out a traceability plan for all of the steps in their process.

Aadi Honey’s improvements not only made the product safer for consumers, but also in marketing, new product development and apiary management. This has helped them to increase their client base starting from selling only locally in the Tangail region to selling to supermarkets nationally with the potential to import on the horizon.

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SELF-RELIANCE + RESILIENCE Not all outcomes can be quantified into additional sales. Food safety improvements have a much higher chance of sustaining when agribusinesses invest in infrastructure and dedicated FSQ personnel and establish, document and operationalize practices. Using the GFSI GMaP assessment allows the F2F FSQ project to encourage agribusinesses to take ownership of their own FSQ improvements by helping them to become self-reliant, increase their resiliency and carry forward a culture of food safety after the project closes.

Two of the partner agribusinesses have hired or appointed a full-time FSQ staff member. These FSQ professionals will help them cope with food safety emergencies and continue to bring them closer to their FSQ goals. Aadi honey, for example hired a Quality Assurance full-time staff member to help them find gaps in food safety protocols and processes.

Because Oggro Dairy diversified their market, their overall business has strengthened and kept them open amidst a global pandemic. Thanks to F2F FSQ assistance, AG Agro Foods Ltd. too was able to offset some of their reduced export sales due to COVID-19 through an increase in domestic sales. They were able to demonstrate their improved food safety management system to a new client who offered them a six-month contract val-

ued at $432,165. Overall, their sales also declined, but due to the new contract the decline was not as painful.

Under usual circumstances, F2F FSQ food safety and quality experts from Land O’Lakes, Inc. team and its commercial partners work with partner agribusinesses through in-person assignments, however since the pandemic began, in addition to food safety our team has focused on disseminating COVID-19-related information. While COVID-19 has presented innumerable challenges in the agricultural sector in Bangladesh, Venture37 has used its network to disseminate critical COVID-19-related preventative information to sector participants from the WHO, the CDC and Land O’Lakes, Inc. In April 2020, the District Administration informed Amrita Consumer Food Products Ltd. that they were at risk of a potential shutdown due to poor hygiene management. The company quickly implemented hygiene guidance from a remote F2F FSQ expert and from the COVID-19 reference documents from the field team. After a follow-up audit, Amrita received approval to keep their factory open during the lockdown period.

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Venture37 is a 501(c)(3) nonprofit helping communities around the world build economies by strengthening local agriculture, helping agribusinesses create jobs and linking farmers to markets.

Since 1981, it has implemented over 315 integrated dairy, livestock and crop development programs in nearly 80 countries.

Land O’Lakes Venture37’s long-standing affiliation with Land O’Lakes, Inc.—one of America’s largest farmer-owned cooperatives, with nearly 100 years of expertise in dairy, animal nutrition, crop inputs and agricultural insights and technologies—sets it apart. Land O’Lakes, Inc. supports Venture37 projects as part of its enterprise purpose of ‘Feeding Human Progress’ at home and around the world.

Since 1987, we have sent more than 1,400 U.S. highly qualified volunteers — including 166 of our affiliate Land O’Lakes, Inc. staff and cooperative members — on assignments in 27 countries. As a quality-driven food company, Land O’Lakes, Inc. is uniquely positioned to drive improvements in food safety and quality by offering a broad range of agricultural technical expertise.

www.landolakesventure37.org

For more inquiries about this report, contact: Sadie Paschke, Program Director SPaschke@landolakes.org