Meeting customer demands

by Steve Krut
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Rising demand for third-party audits is good news because it reflects growth among small meat businesses. (Photo by Sally Morrow)

Small meat-processing companies that are looking to bring their specialty products to larger marketplaces are increasingly bumping into the demands of their new wholesale customers for third-party audits.

Wholesale customers, once content to know that their meat suppliers were meeting such inspection requirements as Good Manufacturing Practices (GMPs) and Hazard Analysis and Critical Control Point (HACCP) plans, are facing increased vulnerability in their product liability, recall and insurance coverages- and are more frequently calling for an additional firewall called the third-party audit.

“Third-party audits have existed for more than 40 years and are customer-driven,” explains Jason Young, quality management and Global Food Safety Initiative specialist at Oklahoma State Univ.’s Robert M. Kerr Food & Agricultural Products Center in Stillwater. “This is good. It means the small meat business is growing beyond their retail sales and has expanded its customer base to the wholesale supply chain.

“The larger distributors and big-box stores recognize their vulnerability if the store was to sell product that is adulterated or created a foodborne outbreak,” he adds. “A primary mechanism the large customers have to reduce the risk of these potential outbreaks and recall costs is to require that the supplier have a third-party food-safety and sanitation audit.”

Young notes the audit is a tool used to verify the supplier has implemented a food-safety system based on a given set of criteria. He says these one- to three-day audits are a snapshot in time that include multiple prerequisite programs with record keeping that will be reviewed. A few of these programs include HACCP, sanitation, pest control, employee practices, a recall program and traceability.

Customer satisfaction

Kevin Western, chief operating officer for Western’s Smokehouse in Greentop, Mo., says the expansion and future growth of his firm has centered around private-labeling and manufacturing for other meat processors. His company’s involvement with third-party audits came about when he had a customer require it of his company about six years ago.

 

Kevin Western, COO,
Western's Smokehouse

“It was nerve-racking and kind of still is,” he comments. “I believe that our embracing the concept of third-party auditing to enhance our business is why we are growing. At first, it was centered around one company, but now we have about five or six accounts that require some form of advanced auditing.

“I participate in a number of national food shows and hear comments on specific requirements for auditing in some fashion. I believe it will become a must with most accounts, especially national accounts,” he adds.

Western says a routine audit typically costs between $2,000 and $3,500. In the past year, his company hired a consulting firm to help them expand programs to enhance their scoring as well as work toward Safe Quality Foods (SQF) status by 2016. He says the investment of $5,000 was worth it since it led to increased score improvement and helped in the training of their new full-time Quality Assurance specialist.

“I do not think small processors should be scared off by third-party auditing,” Western adds. “It is something that can be set up to be very manageable and used as a marketing tool to gain new business or retain existing accounts. In its infancy, it does require a little more time and commitment, but when you are able to add accounts and gain business, a firm can work up to a full-time QA/HACCP coordinator.”

Doug Hankes, vice president of operations for Thrushwood Farms Quality Meats Inc., Galesburg, Ill., says his firm was approached in November 2013 about getting a third-party audit by a customer that they work with who uses multiple facilities to make their products.

“We were given a very short window to become compliant,” Hankes recalls. “I will admit it was a lot to absorb in a very short period of time. Our initial intent was to just jump straight into SQF, but we quickly learned that it is a major culture and activity change and is not to be taken lightly. Our goal is to be GFSI compliant by 2017 at the latest.”

Hankes recommends that any company looking to head down the third-party audit road allow no less than six months to get prepared. He indicates that an audit can cost between $2,000 and $4,000, depending if there are any addendums that are required by different customers.

Small meat processors shouldn't be scared off by third-party audits, but program development will take time, energy and a lot of thought.
(Photo by Sally Morrow)

“You need to book an audit about three months out,” Hankes explains. “I would recommend any first-time facilities being audited to schedule a pre-audit with or without consultation to see where you stack up.”

Program development will take time, energy and a lot of thought, Hankes admonishes. He says it’s like making sure your HACCP plans don’t create programs that bog down your company and will make sense both in the plant and on paper.

“We were fortunate to be thinking about product flow and employee flow in our last addition to the plant,” Hankes notes. “We planned separate break rooms for raw and ready-to-eat production workers, separate colors of coats, gloves, etc. There will be some facility and time expense that many plants may not feel are worth it. However, those expenses and thinking about your flow will make a better company in the long run.”

Small processors

Chris Young, outreach specialist for the American Association of Meat Processors (AAMP), which represents primarily small and very small meat processors, says he is not yet sure how the growing demand for third-party audits will affect the group’s smallest members.

“We are working with Dr. Joe Cordray at Iowa State Univ. to develop tools and materials for AAMP members,” he explains. “We are also offering a seminar on third-party audits at our June national convention in Springfield, Ill., and are already working on checklists and guidance documents that we can make available on the member accessible section of the association’s website.”

AAMP’s Young says that several years ago Walmart started requiring suppliers to comply with SQF standards. He says many smaller and regional grocery-store chains have followed the retailer’s lead. Young points out that once a plant has attained this certification, it must pass a yearly audit, much like a food-safety audit done by the Food Safety and Inspection Service, in order to maintain its certification.

 

Jason Young, Global Food Safety Initiative specialist.

Hankes says despite the increased expense and time involved, third-party auditing has allowed Thrushwood Farms to really sit back and analyze some of their production potentials, as well as concerns, and forced the company to act upon them to better itself. He suggests that processors who are looking at advanced auditing should not look at it as a negative, but rather as a way to better their company, their products and their employees.

“At Thrushwood Farms, it has given us the opportunity to really collaborate with our employees and make the processes and the facility better,” he says.

OSU’s Young feels the quickest way to become audit-ready is to hire a fulltime food-safety specialist or a food-safety consultant. Using the consultant, a supplier will still need personnel to continue the implementation of the food-safety system once the consultant has helped to design and implement the programs.

“Depending on how involved the company wants the consultant to be, the costs range from a few thousand dollars to more than $15,000,” he suggests. “Then, there is usually the additional capital to upgrade or fix cross-contact areas, hands-free hand washes, doors and roll-down doors, pest-proof and locking measures for food defense.”

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