Our world has been turned upside down by the COVID-19 pandemic. Which begs the question: where should food, beverage, and dietary supplement companies focus their resources while navigating these challenging times?
A good starting point might be to quickly review the differences between food fraud, food defense plans, and food safety.
- Food fraud is intentional adulteration with the purpose of economic gain.
- Food defense plans are designed to protect you against intentional adulteration.
- Food safety is the attempt to prevent unintentional adulteration that inevitably occurs.
Since food fraud is done for economic gain, perpetrators work hard to ensure it goes undetected. This crime is often committed by individuals who don’t understand food safety; they might inadvertently use a harmful substitution or dilution. Some examples of this are a 2008 incident involving melamine in milk powder and a 2015 event where ground peanut shells were added to cumin powder.
As with most crimes, perpetrators are those who have both a motive and an opportunity, and this pandemic has created ample amounts of both. Motives have multiplied as financial hardship is ballooning; markets are plunging; unemployment is at a record-breaking high; and certain business sectors are becoming obsolete. Opportunities have grown as normalcy is disrupted, according to Stephanie Lopez, VP of Operations - Americas at AIB International – an insight she shared during a recent talk with TraceGains’ CEO Gary Nowacki. It’s much harder to detect something out of the ordinary when everything is disrupted.
Lopez suggests some of the disruptions to norms companies should look out for include the following considerations:
- Have your business demands shifted? For example, do you now have less restaurant demand and more grocery or retail demand?
- Is demand higher for certain ingredients because of that shift? Has that caused you to make a rush job of qualifying suppliers?
- Has the availability of some ingredients been disrupted? Has this also caused you to quickly qualify suppliers?
- Does your staffing look different today than it did six months ago? Have you had employees who have gotten sick or quit? Are your employees tired, scared, and less attentive? Have you had to hire new or temporary employees to get through this?
All these variations from the norm increase a company’s vulnerability. Because the biggest food fraud risk comes from suppliers, Lopez says that step one for food, beverage, and dietary supplement companies should be to retain as much of their normal rigorous supplier approval and monitoring program as possible. The fewer exceptions companies make, the better.
“Suppliers shouldn’t get a free pass, particularly new suppliers,” Lopez said. “Audits help keep food safety front of mind. Continued oversight is essential. There are ways to audit your suppliers remotely. AIB is now offering virtual audits. While most focus is on documentation review, there are instances in which we can use livestreaming apps on smartphones and tablets to inspect specific areas of an operation.”
Audits are the Answer
Audits are more important than ever since the norms in most supplier facilities have been upended. Many companies have determined that product inspection and ingredient testing is crucial to mitigating adulteration. The key here, Lopez said, is related to staffing. Many companies are hiring temporary or new personnel to replace lost employees or to supplement their workforce. “There’s nothing wrong with this,” Lopez added. “The key is to understand that you don’t need to assign all tasks of a certain role to a temp or new employee. Higher risk activities should be retained by the more experienced personnel. So, if the additional scrutiny is part of receiving, for example, consider dividing receiving responsibilities into low risk and high risk, and then assigning only low-risk activities to less experienced personnel.”
Teams are busier than ever, making it critical to prioritize controls for higher risk ingredients. As part of a food safety plan, most companies have identified which ingredients are more susceptible to food fraud. And databases, such as Smart Alerts, can help by providing historical and emerging data to determine ingredients to be prioritized.
“As a refresher, liquid or finely ground ingredients are easier to dilute,” Lopez pointed out. “Think about comparing the whole cashew vs. cashew powder or cashew butter. It would be much easier to detect a foreign substance mixed in with whole cashews. We also have historical information that tells us which ingredients have been targets of fraud. Finally, the region where the ingredient is sourced can also influence the likelihood of fraud.” Some countries have high political risk scores, which tend to correspond with food fraud. So, if companies are sourcing from a new supplier, it’s important to understand where the materials come from.
“Finally, there is some temporary latitude with regards to regulations right now,” Lopez explained. “It’s important companies are clear about which regulations have latitude and which don’t. Don’t just take a supplier’s word for it. For example, with fewer people going to restaurants right now and more people getting their food from grocery stores, the FDA and USDA are allowing products packed and labeled for food service to be distributed at grocery retailers.” If ingredients arrive and aren’t packaged or labeled in the usual way, it could be related to a temporary latitude with labeling, or it could be that someone is providing a fraudulent ingredient.
“My second example here is about the FDA foreign supplier verification program,” Lopez said. “The FDA is exercising temporary enforcement discretion in which they’re not requiring onsite audits for FSMA supplier verification. However, you don’t want to let your foreign suppliers say you can’t audit them. This is specific only to onsite audits. Document review and other verification activities are still required.”
To minimize risk, Lopez advised that companies should:
- Identify currently sourced high-risk ingredients and ensure qualified individuals are executing established control measures.
- Prioritize new suppliers according to risk. Focus extra measures on higher risk suppliers and ingredients.
- When embracing temporary allowed to confirm the details. Don’t rely solely on suppliers.
Necessity is the mother of invention – and innovation. And many innovations are emerging and being embraced during this pandemic, virtual audits included.
Why are virtual audits taking off right now?
- Brand protection
- Supplier approval
- Training and education of onsite staff
“Companies can’t cut corners in these areas, no matter what,” Lopez insisted. “But we do face some unique obstacles right now, such as shelter-in-place orders, travel restrictions, and visitor limits. These obstacles hinder the ability for auditors to travel to food facilities for inspections and audits.”
Three variations of virtual audits exist, Lopez explained.
- Hybrid audit: An audit done partially online, or remotely, and partially onsite later. In this scenario, the auditor schedules the audit with the client, using the client’s preferred video conferencing platform. Then the auditor can review policies, procedures, and records online and conduct employee interviews. The auditor can then follow up the remote review with an onsite, unannounced inspection.
- Remote audit: A 100% virtual audit. Documentation is completed via video conference and the inspection is completed via a livestreaming app. Clients use a device of their choosing, typically a smartphone or tablet, to livestream the inspection guided by the auditor. There certainly are limitations – both visual and audio – to this type of audit.
- An audit designed to enhance the self-inspections already in place at a facility when individuals can’t travel to each plant. Companies must ensure the onsite team is doing a top-notch job of self-inspection.
When evaluating these virtual audits, Lopez advised companies to consider the following:
- Ascertain the reason for the audit. Is it for supplier approval? Is it to train employees or for brand protection? This will help guide you down the path best for your company.
- Ensure your customer will accept a hybrid or remote audit if you’re using it for political purposes.
- Determine if livestreaming will be affected by the environment being inspected.
- Don’t be afraid to pilot a virtual audit or just try it out.
- Doing nothing is not an option.
“In the age of COVID-19, FDA overall expectations haven’t changed,” Lopez said. “Companies are still required to ensure the food they’re producing, or handling, is safe, sanitary, wholesome, and honestly labeled.”
The FDA has recognized that there’s unprecedented demand for certain food items, and they are trying to minimize disruption to manufacturers and the supply chain. One policy they have enacted to this end is to suspend routine FDA inspections. They’ve allowed importers to defer onsite audits, which are part of the foreign supplier verification program.
“While we know these policies are temporary, defined dates have not been provided,” Lopez added. “There are just too many unknowns with the pandemic, its impact on consumer behavior, and the supply chain.”
With Audit Management, companies can bring up many desk audit materials as TraceGains has collected so many documents and data points from suppliers. Companies can reduce time spent discussing critical audit issues and turn their resources toward a virtual audit using any connected device.