SSAFE Launches Best Practice Guide for Food Safety in Mergers & Acquisitions

SSAFE Launches Best Practice Guide for Food Safety in Mergers & Acquisitions

Failure to anticipate the food safety risks that can arise can lead to high costs and reputational damage.

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November 30, 2018
QA Staff Edited

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 2012.1

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 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 (www.ssafe-food.org), 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 due diligence and post-merger integration activities,” said SSAFE President Neil Marshall. “Applying the knowledge, experience and expertise from SSAFE members and Accenture can help businesses reduce potential food safety issues going forward."