From an insurance perspective, a fire is a fire. However, not all food contamination and recall events are the same. Recall-related situations can be as simple as first-party business losses where only the insured is affected, or as complicated as holding the supply chain responsible for third-party losses due to product refusal in the marketplace.
Coverage solutions must be created which address the unique fingerprint of each specific outbreak, and now technology is bringing customizable risk management programs to the next level. The team here at Insurance Services have partnered with our Science & Tech division to launch a game changing solution that will digitize food safety all the way through the supply chain. Our Supply Chain Risk Management Solution is an industry-driven solution to take control of supply chain food safety and traceability issues and allow us to develop a more targeted insurance package that meets your company’s needs.
The industry has faced several high-profile food contamination events within the last few years – everything from E.coli to Listeria – and evolving beyond traditional tracking systems will allow the industry to reduce the number of outbreaks, substantially improve food safety and keep consumers safe.
To quote the U.S. Food and Drug Administration:
“The ongoing U.S.-wide romaine lettuce E.coli outbreak showed us, once again, that our traditional paper-based food tracking system is no longer adequate for the 21st century. An ability to deliver accurate, real-time information about food, how it’s produced, and how it flows from farm to table is a game-changer for food safety.”
Western Growers (WG) is taking this challenge head on. Our new Supply Chain Risk Management Solution allows us to use technology to advance food safety in four ways:
• Daily Assessment: offers real-time process control throughout the supply chain, providing companies with daily and continuous input on their food safety performance
• Track Trends: allows companies to easily review and track food safety data to identify trends that facilitate ongoing improvements in food safety practices throughout the supply chain
• Traceability: provides instantaneous case and item level traceability across the entire supply chain using cloud and blockchain enabled technology
• Financial Protection: indemnification to supply chain participants in the case of a contamination event
Through the successful implementation of this unique software system, our goal is to facilitate continuous improvement every day, quickly recognize and react to data, identify trends and implement needed changes to our food safety programs.
DAILY ASSESSMENT & TRACK TRENDS
We have tapped iFoodDecisionSciences to provide real-time process control throughout the supply chain. iFoods is helping growers, shippers, processors and retailers move their food safety documents from paper to a digital platform. Leaping beyond other systems that copy paper documents and share them electronically, iFoods works to capture all essential food safety data points through the supply chain, resulting in a best-in-class documentation of food safety processes and practices, which mitigates the possibility of a contamination event. Additionally, for our members, it will reduce time for audits and audit preparation, provide real-time data and trend analysis to help ensure compliance and improve data quality and metrics for decision-making.
Beyond data aggregation and analysis, our new software system can also track product throughout the supply chain and can be seamlessly shared using blockchain ready technology if the supply chain requires it. We partnered with Trimble HarvestMark to provide item level traceability that facilitates store level identification of products, which is currently missing with case level traceability. In the event of an outbreak or recall, QR codes on packaging would allow consumers to quickly scan products to determine that they are safe to buy and eat. This feature protects your company and customers by facilitating efficient recalls when warranted. Moreover, this readily available traceback and traceforward capability can quickly narrow and identify the specific products that are and are not involved in a food safety event.
Having served the agriculture and food industries for over 60 years, Western Growers Insurance Services (WGIS) knows the issues our members face and are committed to providing services and developing solutions that are tailored to your company’s exact needs. In 2016, we rolled out Western Growers Shield® a comprehensive contaminated products program designed to guide food and agriculture companies through managing a contamination-related event and mitigating exposure. This is the next iteration in the evolution of our industry solution.
The insurance portion of our Supply Chain Risk Management Solution will provide access to superior crisis management guidance as well as legal counsel and claim adjudication. Additionally, you will have a significant level of insurance through WGIS with funds for the following:
• Business Interruption/Extra Expense
• Brand Restoration
• Product Refusal
• Third Party Expenses
We are also working with the WG legal team to bring a uniform contract back to the table for the industry. If we can use one contract throughout the stream of commerce, in the case of a contamination event, there is no disagreement between supplier and customer on where financial liability lies, and all parties could be indemnified under the terms of the contract and the insurance coverage.
It’s important to note that this system, unlike others, is developed to be open source and to work with other existing systems already in place. It is managed by WG, a trusted partner, for the use of all supply chain participants so that it will benefit the industry as a whole. WG is dedicated to moving the needle on food safety and will utilize anonymized data from this new system to help inform, improve and protect the entire industry and advance supply chain reliability, transparency and responsiveness. Together, with government agencies and all players in the food supply chain, we can work toward creating stronger preventive controls.
WG is currently working with a group of early adopters in the leafy green market segment but welcomes other interested WG members (leafy green and non-leafy green companies) to test the program before a broader rollout takes place. If you are interested in being part of the Supply Chain Risk Management Solution or would like more information, please contact me at (949) 885-2351 or Hank Giclas at (949) 885-2205.