2017 was another record year for global food and drink industry acquisitions. Transactions averaged almost 14 a week; 40% more than five years ago. In fact, apart from a dip in 2013, they’ve been increasing every year since 2012.
For some acquiring companies, however, a healthy appetite for consolidation and growth has resulted in a nasty dose of heartburn. Failure to anticipate the food safety risks that can arise, especially when buying less mature companies, has led to production stoppages, product downgrades, dramatically higher infrastructure and other costs, and severe reputational damage. What’s more, as bigger brands continue to gobble up the smaller players now proliferating across the industry, these risks can only intensify.
There is, of course, no one-size-fits-all solution to the food safety challenge; it should be tailored to the specifics of the potential acquisition. Accenture experience suggests, however, that most companies devote less than 2% of their due-diligence efforts to food safety issues. They don’t dedicate expert senior resources. They rarely inspect the potential acquisition’s site facilities. And they lack a comprehensive and consistent check list of food-safety Key Performance Indicators (KPIs).
This needs to change—and can. A review of industry leaders across six global food and beverage companies, conducted jointly in early 2018 by SSAFE and Accenture, reveals how a more robust approach to food safety in both Due Diligence and Post Merger Integration (PMI) activities can help deliver significantly better outcomes.
The result is an Industry Best Practice Guide on how to manage food safety during Due Diligence and Post Merger Integration phases of merger and acquisition activities in the food industry. Available for free download from the SSAFE website, the Guide is applicable to all types of mergers and acquisitions of food businesses across the food industry, irrespective of geographical location or company size, and is flexible to enable the user to tailor its application to its own unique acquisition situation.
“The intention of this guide is to help the food industry improve how it conducts food diligence and post merger integration activities. Using the knowledge, experience and expertise of SSAFE members and Accenture will hopefully create a real step-change and reduce food safety issues going forward.” – Neil Marshall, President of SSAFE
The journey to world-class food safety practices starts with building a strong food safety culture within a food business. Leaders set the example by demonstrating the right behaviors and empowering their employees.
Building on our success in India and recognizing similar needs in China, SSAFE launched a collaborative project with Shanghai Jiao Tong University
SSAFE recognized the need for the development of an open-source food safety training framework to support the development of dairy farming in low and medium income countries.
2017 was another record year for global food and drink industry acquisitions. Transactions averaged almost 14 a week; 40% more than five years ago.
SSAFE is proud to announce that, in collaboration with Dr. John Spink from Michigan State University, it has launched two training modules to help companies