Food and drink federation conference

CONFERENiCE REPORT Food and Drink Federation Conference 6 March 1990, London, UK

The Food and Drink Federa.tion (FDF) is the representative body of the food and drink manufacturing industry in the UK which embraces 45 B’ritish food sector trade associations in its membership. The theme of this year’s annual conference in London on 6 March 1990 was ‘Quality - the way forward’. The Conference was attended by 220 deleand senior gates, mostly directors managers and addressed by seven speakers known internationally. Because the FDF is wholly committed to supporting the European Community in its intent to create a single European market by the beginning of 1993, it was thought appropriate to hold a national conference on a theme both central to the creation of that market and highly relevant to the concerns of the food industry in the UK in 1990. The objective of the conference was to demonstrate and discuss ways in which quality was being enhanced by the food and drink manufacturing industry. A second element was the strengthening of food control legislation and enforcement in the UK and the EC. The conference was structured to provide seven presentations: from a market research professional, two leading food manufacturers, a major packaging supplier, a leading multiple retailer, the Head of the Foodstuffs Division of Directorate General III, European Commission and a local authority Trading Standards Officer.

The Quality Market John Whitaker, Marketing Director of Pergamon AGB plc, presented results of specially commissioned market research into consumers’ current perceptions of quality which were key to the future of the food industry in the 1990s. The specific research on behalf of the FDF had sought to identify what quality meant to the consumer in 1990. Although the general view of the consumers questioned was that food quality had improved over time, they had more concern about food than hitherto because they saw food as hiaving been ‘more interfered with’. This concern appeared to be founded on some confusion but the important message was food Control - ./u/y 7990

that consumer education was not happening. Another conclusion was that multiple retailers were playing a substantial role in forming consumers’ attitudes. During a shopping trip there was not time to judge the quality of every single product and in that respect the retailer’s image was crucial. The well-known manufacturer brand was the consumer’s greatest potential assurance of quality. Where manufacturers’ branding was not so strong, the retailer’s quality image was the principal discriminator. AGB made use of data-based studies which showed the benefits to manufacturers of quality leadership and indicated strategies to follow in achieving that quality leadership. The benefits to businesses that had superior products or services included stronger customer loyalty, less vulnerability to price wars, the ability to command higher prices, lower marketing costs and good share growth. Strategies for achieving quality leadership began with making quality a total management issue (a theme reflected in later presentations). Other steps were to anticipate and to be the first to meet consumers needs. Other strategies were to build a better image or provide better services, to build a broader product range. A quality edge could also be gained by vertical integration to control multiple stages of production.

Managing quality The first manufacturing presentation was given by Allan Price, Chairman of Birds Eye Walls Ltd, who demonstrated his total quality strategy which worked ‘bottom up’ by securing a radical improvement in the quality of the contribution made by people not just as a key objective but as the main objective of the whole plan. Following restructure, Birds Eye Walls embarked on a quality programme, BEXCEL, which comprised three stages: the quality assurance stage; the quality improvement stage and the final stage, the approach to ‘total quality’. The quality assurance stage focused on production and involved real consultation with all personnel at every site;

massive investment in training and selection; a craft multi-skill programme; and a work reorganization scheme, ‘workstyle’, which effectively put the shopfloor in charge of organizing their own work and made the supervisor a real boss. The quality improvement stage focused on not just maintaining but improving the quality not only of its products but of the performance of the whole organization. As well as quality improvements by solving key problems, cost savings were made. Technical quality was improved, as were physical facilities and supplier assurance. The bedrock was ‘workstyle’ and the ordinary shopfloor operative. TO achieve total quality in the final stage, still on-going, was the shift from improved quality to perfect quality. This involved a new company organization, an integrated company quality culture and a single company approach to financial rewards. A new element was to involve the retail customer more and more in establishing five key links: raw material supply; product development; manufacture and packaging; distribution to the trade; and distribution from trade to customer. Consultation and motivation were the key elements of a scheme founded on the principle of motivating people to accept responsiblity for quality.

Quality in the EC Paul Gray, Head of the Foodstuffs Division, Directorate General III of the European Commission examined the part being played by EC food legislation and how it would develop as 1993 approached. EC food law had set out to lay down only those rules which were essential to protect consumers. Once protection of the public from risk and reasonable rules of fair trading were assured, then products legally made in one member state could enter all other member states. Governments had rightly thought it necessary to protect the primary elements of quality -safety, wholesomeness and identity. The question of identity presented a difficulty because identity was often protected by prescribing in law the composition or recipe of products. This had led to complications when products bearing the same name but deriving from different culinary traditions in the various EC countries could not be traded between them because of the confusion that might result for consumers. The Commission had tried for many years to reconcile these traditions

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in common specifications for food but since 1985 it had concentrated its effort on enacting legislation only for essential matters which were: safety; fair trading (labelling) and public controls. This new approach did not set aside national recipe law provided it did not prevent the entry of products legally made in other member states. Extensive judgements of the European Court of Justice had vindicated this policy which had also been supported by member states. In contrast to the lack of progress with vertical harmonization, most of the main horizontal directives announced in the Food Law 1992 programme had already been adopted. Thus, conforming with Community food law gave those fundamental guarantees to the consumer that underlie all concepts of food quality. The problem of identity of products was linked to ‘imitation’ products, or those made with different ingredients. The Commission’s partial answer to this was to provide for labelling to include information on characterizing ingredients of a product. Another argument frequently put forward was that a national high quality product could be undermined by dubious products from outside. This was a false argument, he believed. Equivalence of enforcement throughout the EC was essential. Training programmes for control officials and exchange visits between member states were being organized. The question of quality labels for food was under active discussion and a proposal had been announced in the Commission’s programme for 1990. The advantage of a Community scheme was that the quality label would be protected throughout the Community by public law. It would be advantageous for any schemes of quality assurance to be operated in compliance with the IS0 9000 (EN 29000) series of standards which had international recognition. This would have the advantages of fulfilling consumer expectations and facilitating public controls. Quality and enforcement Cheshire’s head of trading standards, Roger Manley, took as his central theme the importance for enforcement of collaboration and the pre-eminence of the industry’s own quality control. He wished to see a working group of industry representatives, enforcement officers and consumers set up to resolve issues which were unsuited to law. To be effective, food law enforcement had to be based on teamwork. He preferred to work with industry, discussing shared problems and achieving progress based on knowledge and mutual respect. At local government level enforcement personnel needed better training

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and more resources. This was because complex and technically of the advanced nature of the food industry. This highlighted the need for the enforcement team to gain a better understanding of the issues and employ equally advanced techniques. Consumer reactions were an important element in quality and much could be learned from consumer complaints which could lead to quality improvement. But the consumer had a duty to and prepare food store, transport wisely. The true custody of quality lay, however, with food companies’ quality control and assurance schemes, the existence of which could assist in the ‘due diligence’ defence currently under discussion as part of the Food Safety Bill. He was not in favour of an independent agency modelled in the US Food and Drug Administration and did not feel that prior approval was helpful. However, there were areas where the Food and Drink Federation and LACOTS (The Local Authority Coordinating Body on Trading Standards) could work together publicly to give guidance and advice. Packaging quality Alex Watson, Director General of Carnaud Metal Box (CMB) in his presentation focused on the food and drink packaging industry. He believed that a new awareness had grown among consumers, especially of ‘green’ issues. People were now more concerned with environmental issues and all aspects of their lifestyles. This caused all in the food and drink industry to revisit and review all their practices. Within the packaging industry forces which influenced the development of new packaging ranged from convenience to quality perception, including safety. Each technology used in the presentation of food - fresh, chilled, frozen, canned or bottled - had its own customer perception. Customers were often interested primarily in the packaging itself. The challenge to the packaging industry was to ensure that all their customers were provided with produce and service which was faultless. This could be achieved through team work: CMB’s philosophy was to work in teams producing comprehensive solutions to problems, rather than putting patches over symptoms. He believed that existing food laws and regulations were not adequate. They were behind the times and always would be. Major packaging companies and processors should, therefore, develop their own internal requirements to protect their good names. Quality, safety and the green world, these created the new business environment. They presented a challenge to an industry with a record of achievement

as high as any in the world. The decade of the 1990s would be a turbulent one. BS 5750 (IS0 9000 series) The second food manufacturing presentation was by John Attree, Operations Dirtector of Lyons Tetley Ltd. Echoing many of the ideas presented earlier by Allan Price, he claimed that grassroots cooperation meant that quality was driven from the top but steered from the bottom. Although commitment to quality had to be shared throughout an organization, it was only by fully involving the shopfloor that a quality policy could be made to work. He defined quality as an awareness of a company’s responsibilities to its public, its suppliers and itself, embracing more than technical proficiency. Quality had to be ‘designed in’ rather than ‘inspected out’. A critical link in the quality chain was the supplier and Lyons Tetley invested considerable time and resources in producing specifications for all their suppliers. In July 1988 they had introduced the annual Suppliers Performance Review (SPER) awards. SPER worked by ensuring that each supplier was visited regularly by a company executive who conducted a detailed inspection of quality systems, standards and hygiene on site. Lyons Tetley was awarded the BS 5750 Part 2 quality registration for its tea operation shortly after the launch of SPER. In November 1988, the company had achieved registration under IS0 9002 which covered a wide range of activities including sales administration and training. The company had implemented higher standards of quality before seeking BS 5750 registration. Measures taken had included establishing a quality organization with a quality steering committee and quality improvement groups which analysed all complaints identifying their causes. They had ensured that manuals and documents were kept up to date, initiated a quality self-audit and posted operator instructions on all machines. They had a strong system of quality discussions with the work force at all levels. New initiatives or procedures were fully aired before implementation. Suggestions for improvements came thick and fast from the work force. By the time of their BS 5750 registration they not only had a proven quality system but a commitment at all levels to making it work. With the exception of record keeping, quality commitment represented a real saving in productivity, efficiency and ultimately, profits. Retailing quality A belief that customers were the key quality arbiters was the message put forward by Alistair Grant, Chairman of the Argyll Group plc, in a retailer’s

Food Control - July 1990

Conference Repot? presentation which concluded the conference. He gave a short histclry of the development of the Argyll Group which had passed through two phases of integration including the acquisition of Safeway in 1987. Margin improvement, however, through integration of acquisitions was not sustainable. Growth had been driven partly by increases in selling space and centralized distribution. Plans were in hand for Safeway by March 1992 to consist essentially of food superstores. The basic retail and distribution assets would be in place to deliver a consumer proposition based on quality of operation and product. They were developing a differentiated and were committed to strategy, delivering quality through rigorous planning and testing procedures and the business was that ensuring thoroughly resourced with assets and people. This was symbolized by substantial investment in bricks and mortar as well as investment in a major objective to develop the skill and quality of

Food Control - July 7990

Having established a staff. performance-based consumer franchise, Safeway was now adding a productbased consumer franchise by increasing product excellence. This had four key dimensions: a demanding specification; environmental excellence; accuracy of targeting to meet consumer needs and merchandising clarity, particularly for the customer short of time. With quality assets, quality people and quality products, Safeway would have a total quality culture which could be sensitive to feedback from consumers. For example, they had organized their first customer conference at the St Helen’s store and had appointed regional boards to be responsive to local customer needs. For Argyll, product quality development was halfway through its lifecycle. In the early 1980s it was a luxury, now it had become a potential source of competitive advantage. Argyll needed to compete effectively with the major forces in the industry. It needed to bear in mind that there would be no retailing

without manufacturers and the products they developed. But quality own-brand products which offered value for money were important to consumers. Safeway was uniquely well positioned to add an enhanced own-brand dimension to its already powerful consumer franchise.

Conclusion Guy Walker, Chairman of the Conference, summed up the day’s discussions. Quality in all aspects of the work of the food industry, from raw material supplier through to retailer, was of paramount importance. The future of the food industry would depend on its commitment to achieving standards of excellence. Sensible food legislation and uniform law enforcement were to be welcomed. The Food and Drink Federation was giving a lead in promoting a discussion of quality and looked to its many members to accept the challenges of ever-rising standards and expectations. M. D. Stevens Food and Drink Federation

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