The Global Food Safety Initiative (GFSI) was started by a group of retailers in Europe in 2000 to tackle the issue of different safety standards applied in the region. The retailers were subsequently joined by manufacturers, certification and accreditation bodies, academics, international organisations and food service companies like McDonalds.
Figures taken from the recall enforcement reports issued by the United States FDA show that the number of food recall events has generally been rising in the country since 2014. Last year, 21 million pounds (about 955,000 kg) of meat was recalled by the US authorities. In Europe the numbers of food safety notifications recorded in the RASFF (rapid alert system for food and feed) indicate a decrease since 2011. But within the overall decrease, the number of alerts at the highest level of severity has actually been rising.
Consumers are cooking less from basic ingredients, buying more convenience food and thus delegating food safety largely to the industrial food-processing companies. At the same time, the younger millennial generation is calling the current value chain into question and demanding more transparency in exchange for their trust.
When large-scale food safety incidents occur they generate big financial losses, at least part of which is paid for by insurance companies. According to estimates, the 2011 E. coli outbreak in Germany, which caused thousands of infections and 53 deaths, resulted in losses for farmers and producers of USD 1.3 billion. The US "popcorn lung" cases is an example that demonstrated how a problem can impact the entire value chain of food production.
Globalisation has brought challenges to world food trade. A food production unit in South America might export to the USA, Europe, China and Australia, so a problem like Salmonella contamination at the production plant may have repercussions in all those countries. From the insurance perspective, it will be a case of accumulation exposure, and that possibility has to be considered in risk assessment and the development of insurance products.
The demand for food is growing. Globalisation has brought changes to the lifestyle and earning power of millions of people, including a shift in their eating habits. The rising popularity of convenience foods and ready-to-eat meals underscores an increasing tendency for households to delegate food safety to producers and processing companies. The latter find themselves in highly complex supply chains, or “supply webs,” which are also products of globalisation and which seriously complicate the task of ensuring the safety and quality that both retailers and consumers expect.
Food recalls are on the rise, with a US survey revealing that companies with a recalled product reported costs of USD 10 million and up, some more than USD 100 million. The 'Insuring food safety' event at Swiss Re's Centre for Global Dialogue brought experts together to discuss how to mitigate these risks.
Conde-Petit, the Food Safety Officer at Bühler Technologies, gave a presentation on 'Emerging risks and technological advances' at the Insuring Food safety event at the Swiss Re Centre for Global Dialogue.
Scholte, the Vice-Chair of the Board of Directors at the Global Food Safety Initiative (GFSI), and Senior Director of Quality Assurance and Product Sustainability, Albert Heijn - Royal Ahold, spoke on 'Global food safety: The role of the food industry' at the Insuring Food safety event at the Swiss Re Centre for Global Dialogue.