While there are well publicised benefits of certification, there has been a lack of hard evidence on the economic and operational benefits for manufacturers or in the wider supply chain. A new report, published by Ray Lambert, (Consultant and Associate Research Fellow, Birkbeck, University of London) and Marion Frenz (Reader in Management, Birkbeck, University of London), redresses this lack of evidence by using internal and external datasets to identify the value of BRCGS certification for certified food manufactures, the wider supply chain, and on safer food for consumers.
This paper also explores whether certification to BRCGS programmes provides additional value over other standards in terms of food safety, top line growth, profitability, modernisation and operational efficiency.
This has been carried out through demand-side interviews with large Brands, a review of extant literature on certification and food safety standards, and data from around 450 responses to a survey of Food Manufacturers.
The empirical evidence in the report demonstrates that certification to BRCGS standards generates extensive and positive business impacts for food businesses, on a scale greater than might have been expected in the light of previous research. This is notable as the standards have primarily been developed to ensure the production and distribution of safe food, and not with the objectives of business growth, profitability, operational efficiency and innovation.
The key findings include:
- There are widespread effects and reach on multiple aspects of food business operations and performance with nearly all respondents with at least one positive impact from BRCGS certification.
- The attainment of BRCGS certification opens up market opportunities, especially in export markets and with new customers.
- BRCGS certification drives increased competitiveness via investment and modernisation. It enables increased competitiveness amongst food suppliers by providing incentives to investment in facilities and in human capital and though modernisation of the production organisation and operations.
- BRCGS certification also delivers positive “bottom line” effects for many food manufacturers, which were previously un-observed. These can be calculated as an average of 7.5% sales growth and 6% profitability growth for the 30 to 40% of respondents reporting these quanta.
- BRCGS standards have positive impacts in relation to enabling product and process innovation, and thus growth in output and productivity. However, BRCGS certification goes further than these by stimulating modernisation and investment – broad innovation. Broader innovation includes product innovation and new technology as well as changes in business processes and enhanced product quality (including safety).
- While there are broad similarities in impact with other certification programmes, manufacturers with BRCGS certification experience a marginally greater impact on performance across most indicators.