Manufacturers Experience Growth in Sales and Profitability, Strengthening the Case for Food Safety Certification.
A recent study conducted by researchers at the Department of Management, Birkbeck, University of London, sheds light on the extensive business benefits that food business operators (FBOs) gain from achieving food safety certification. The study, spanning 451 food businesses globally, reveals not only improvements in food safety but substantial growth in sales and profitability.
Motivations for Certification
Primary Focus on Food Safety
While 80% of respondents cited enhanced production and distribution of safe food as the primary motivation for certification, the study also uncovered a multitude of additional business benefits.
Tangible Outcomes
Surprisingly, 55% of respondents reported increased sales, and 28% witnessed a boost in profitability post-certification. These findings challenge the conventional notion that certification standards, such as those provided by BRCGS, focus primarily on ensuring safe food production and distribution rather than driving business growth.
Research Insights
Closing the Evidence Gap
The study, led by Dr. Ray Lambert and Dr. Marion Frenz, addresses the lack of hard evidence on the economic and operational benefits of certification. By surveying a diverse range of food businesses worldwide, the researchers aimed to quantify the value of certification for FBOs and its broader impact on the supply chain and consumer safety.
Unexpected Business Impacts
Contrary to expectations, empirical evidence indicated that certification to BRCGS standards generated more extensive and positive business impacts than anticipated. The standards, originally developed for ensuring food safety, were found to contribute significantly to business growth, profitability, operational efficiency, and innovation.
Efficiency and Productivity Gains
A notable outcome of the study was the reported efficiency gains, with 70% of respondents noting that changes in production methods required for certification led to increased efficiencies and greater productivity.
Growth Metrics
Certified businesses reported an average sales growth of 7.5% and an average increase in profitability of 6%, demonstrating the tangible financial benefits of food safety certification.
Market Dynamics and Future Trends
Driving Global Certification
Several leading food safety standards, including BRCGS, IFS, and SQF, have been developed in collaboration with major retailers. The global food certification market is poised for growth, driven by increased health and ethical consciousness among consumers and more complex supply chains. As a result, ISO 22000, BRCGS, CQF, IFS, and 'free-from' certifications are actively sought by food manufacturers and suppliers.
Expanding Reach
BRCGS, for instance, indicates that its food safety standard is used by FBOs at 30,000 locations in 130 countries, impacting over US$800 billion in food retail sales.
In summary, the study provides concrete evidence that food safety certification not only ensures the safety of the food supply chain but also contributes significantly to the growth and profitability of certified businesses globally.
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