Kim Benjamin
Sep 28, 2015

Brands pour money into food safety

As brands get called out for food that doesn’t make the grade, firms in Asia must improve processes to win confidence.

Safety woes: Supply-chain issues drew McDonald’s heat in China, prompting a local-sourcing policy in India
Safety woes: Supply-chain issues drew McDonald’s heat in China, prompting a local-sourcing policy in India

Food safety has rarely been out of the headlines in the last year across Asia, but for all the wrong reasons. Nestlé-owned Maggi came under fire in India earlier this year after regulators found packets of its noodles contained excess amounts of lead. Fast-food chains such as McDonald’s and Yum Brands were also the subject of food-safety concerns in 2014 in China, having taken deliveries from a supplier using tainted meat. 

In the midst of these food crises, brands are working harder than ever to address safety concerns and earn back consumer confidence. For McDonald’s India, local sourcing is now key to establishing ongoing food safety. 

“Today, over 98 per cent of our products are locally sourced,” says Kedar Teny, director, marketing and digital at McDonald’s India (West and South). “Through local sourcing, we have been able to significantly cut down operational wastage, and maintain the freshness and nutritional value of raw and processed food products.”

Teny adds that the brand is investing to ensure its food is safe for its customers and that there are stringent quality procedures at every stage.

This means 72 daily safety checks at all kitchens and around 25,920 safety checks and procedures annually, with special care taken to ensure consistent food quality standards. “We will continue advertising our products, while conforming to the highest quality,” he says. 

Ambrish Chaudhry, regional strategy director, South and Southeast Asia at Brand Union, says that brands like McDonald’s are bringing what’s usually tucked away in the background into the forefront. 

“Quality practices in areas like sourcing, preparation and cooking are now seen as clear advantages that brands need to highlight,” he says. “In Asia, we may be far way away from brands like Chipotle currying favour with its back to basics philosophy, but safety and stringent controls are emerging as a differentiator.”

When it comes to food safety, best practice will also cost more for brands, but Matthew Crabbe, director of research, Asia-Pacific, at Mintel Group, says this cost is absorbed by consumers, who are willing to pay for better quality, and safer foods in the wake of recent scandals. “The cost of making better food products is a necessary part of keeping up with consumer demand,” he says. “The cost of better marketing to consumers is part of dealing with the increasing sophistication and diversification of consumer lifestyles.”

For Brand Union’s Chaudhry, the question for brands to consider is not so much the cost of implementing food safety measures, but more the price they may have to pay if these measures aren’t stringent enough or if they are inconsistently applied.

Harish Bijoor, a brand expert and chief executive of Harish Bijoor Consults, believes that while the issue of food safety has not yet changed the way food brands are advertising and promoting their products, it will happen in the future.

“In the wake of crises such as the recent Maggi issue in India, companies are now investing more aggressively at this end of the marketing spectrum,” he says. “Brands will be much more careful when it comes to claims, with more caution applied to their advertising.”

Just last month, Indian-owned FMCG company ITC rolled out a campaign for its Yippee noodles, sold under the Sunfeast brand, that focuses on the safety of the product. The ad, created by Ogilvy & Mather, shows the factory where the noodles are manufactured. 

It’s clear that ongoing food safety crises in Asia are forcing brands to revaluate their processes to consistently live up to their quality promise, both across their supply chain and marketing activities. Those brands that embrace a philosophy of transparency and openness are likely to benefit, but this presents them with a further challenge. If brands communicate such a promise, it’s critical for them to live up to it — each and every time.

“For multinationals, this would mean not just adhering to the laws of the land but using their globally stringent standards as benchmarks for what they offer in Asia,” says Brand Union’s Chaudhry. 

Case study: Walmart’s stringent sourcing

Food retailer Walmart says it is putting in place a comprehensive system of best practice, with the aim of becoming Asia’s most trusted retailer.

To this end, it has developed a thorough programme from source to source. In China, the brand is working with farmers, requiring food safety audits for food suppliers’ production and processing sites, and providing associates with access to iPads loaded with safety information at various points in the value chain. This, says Walmart, helps ensure 360-degree compliance with an easy point of reference that can be double-checked.

Marilee McInnis, director of international corporate affairs at Walmart, says that in Asia, the brand is committed to listening to customers through various channels and encourages the involvement of customers. In China, for example, it has a food safety hotline where customers can report their concerns. 

“We talk more about food safety than we ever have before, even though it has always been a focus for us,” says McInnis. “Customers want to know that what they are buying is safe, authentic food to feed their families, so we work hard to provide the information they need.”

The brand also offers a ‘Fresh guarantee’, launched across its stores in China in June, which allows customers to claim a full refund within 14 days for any fresh products if they are not happy with the quality of the goods.

Our view While costly, it’s clear that consumers prefer the peace-of-mind offered by transparent brands.



Campaign Asia

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