From Farm to Table: Navigating Food Safety in China
Brady Sidwell is the Vice President of Corporate Development and Strategy of Asia Pacific Operations at the OSI Group. The OSI Group is a world leader in providing quality animal protein to the global food industry. They have a presence in sixteen countries, and have been operating in China for over twenty years. In this blog, Sidwell discusses food safety crises in China, as well as strategies to effectively overcome them.
Over the last ten years, China has played an increasing role in world agriculture trade, ranked as the fourth largest agricultural exporter and the second largest importer in the world. Yet, they struggle with several obstacles to agricultural modernization, including changing tastes and a demand for imported food, resource scarcity, a population shifting from rural to urban, as well as food transport and food safety.
Over the last two decades, OSI has witnessed many of the trends and obstacles in the Chinese agricultural market, food safety being one of the most visible in the media. As a private company in a foreign country, we’re setting an international standard for best practices in food safety.
OSI Group in China
OSI has had a presence in China for twenty-one years now – just last weekend, we opened our ninth and tenth facilities. Our national footprint in food processing is extensive, producing poultry, beef, pork, as well as vegetables and dough. Currently, OSI is the largest protein supplier to quick service restaurants in China. By the end of this year, OSI will employ about 6,600 people in China, and we’re on track to process about 300 million birds in our poultry vertical integrations by 2015.
The Root Food Safety Issues in China
At the core of most food safety issues in China is lack of control over the food supply chain. Typically, the product you see in a restaurant or in the grocery aisle has changed hands several times, from the grower or producer, to the packer, to the transporter (usually several, depending on the distance the product has to travel), to the store or restaurant. Each of these entities is usually a separate business, with different standards and procedures. This means there is rarely an overarching body overseeing these transactions and ensuring there are no ‘breakdowns’ along the way.
Integrate Your Supply Chain
The best way to eliminate the potential for food safety crises is to gain control over your supply chain, eliminating the number of middlemen between China’s fragmented farm base and the end consumer. As an example, OSI Group has very consciously made several large scale investments in vertically integrating.
We’ve developed a closed system where we control everything, from the parent stock, to the hatchery, to the broiler farms, to the slaughterhouse, all the way to the distribution. It’s a system that’s worked well to protect both our and our customer’s brands, and we’re expanding our efforts to be more vocal in showing other agricultural production companies how these models can help ensure with food safety.
Control Your Own Supply
OSI farms its own product as well as purchases from a network of producers which must comply with strict audit criteria rechecked regularly. We ensure that our suppliers are approved not only around quality, food safety and corporate governance, but also in aspects like animal welfare and employee code of conduct. We work hard to set the standard for best practices and maintain that standard throughout the organization.
Support Your Growers
There’s currently a void in China around extension of technical know-how and support for agricultural industry best practices, so private companies like OSI are filling the void. For example, we provide agronomists for our regional and local vegetable growers, who work directly with farmers on irrigation and planting, choosing seed varieties and pesticides, testing water for potential contaminants. In terms of poultry and beef production, we provide support with genetics and feed rations. Essentially, OSI acts as an extension agent to improve the quality of our supply. We believe that if our suppliers are strong, we’re strong.
Whenever there’s a widespread food safety crisis, the population gets bombarded with a lot of messages from the media, many of which are conflicting or incorrect. For example, when the bird flu epidemic broke out, people stopped eating poultry even though you can’t get sick if it’s cooked properly. We work closely with officials and media services to get audiences accurate information to help guide their choices.
Think Long Term Strategy and Execution
Food safety is a major long-term opportunity because we can control our environment, we can operate independently, and we can do it at a scale that makes it possible for us to serve a national customer. The key factor is execution. Anyone can put together a strategy on paper, or make a forecast about how quickly we can get to a certain cost point. But these are huge operations that require a significant amount of skilled labor. Invest in education, support services, training, and streamlining processes – these are the factors that will bring one’s strategy to success.
Brady Sidwell recently participated as a speaker in the in UC Davis Global Agribusiness Entrepreneur Symposium Series in China. Click here to read more about the program.