THE ECONOMIC IMPACT FOR MANUFACTURING SITES OPERATING TO BRCGS CERTIFICATION

Abstract

Final Report on Research Project on the economic impact of BRCGS Food Safety Standards

Full text

THE ECONOMIC IMPACT
FOR MANUFACTURING
SITES OPERATING TO
BRCGS CERTIFICATION
AUTHORS:
Dr. Ray Lambert
Independent Consultant and
Associate Research Fellow,
Department of Management,
Birkbeck, University of London
r.lambert@bbk.ac.uk
Dr Marion Frenz
Reader in Management
Department of Management,
Birkbeck, University of London
m.frenz@bbk.ac.uk
DATE: October 2021
© Frenz Lambert 2021

© Frenz Lambert 2021
CONTENTS
1 Executive Summary 2
2 Introduction 6
3 Scope of paper 7
4 Demand side based on ‘brands interviews’ 8
4.1Benetsofstandards:thevaluetobrandsofthird-partystandards 8
4.2Limitationsofthird-partystandards 8
4.3.Dobrandsonlyacceptcertiedsuppliers? 8
4.4ArethereparticularadvantagesanddisadvantagesofworkingwithBRCGSstandards? 9
4.5Impactofthird-partystandardsondirectauditing 9
4.6Impactofthird-partystandardsonFBOcompetitiveness 9
4.7Standardsconvergenceandthefutureofthird-partystandards 9
5LiteratureReview 10
5.1Internationaltrade 10
5.2Productrecalls 10
5.3Microlevel–surveys 10
5.3.1Objectiveandmotivationsforcertication 11
5.3.2Challengesandcostsofcerticationtofoodsafetystandards 11
5.3.3Outcomesofcerticationtofoodsafetystandards 12
5.3.4 Derived indicators 13
6Empiricalresearch 16
6.1Motivationsandobjectivesforcertication 16
6.2Impactsofcerticationonbusinessoperations 18
6.2.1 Modernisation 18
6.2.2Eciencyandinvestment 24
6.2.3Operations 19
6.3 Impact on business performance 20
6.3.1Competitiveness 20
6.3.2Growthinsalesinhomemarketsandabroad 21
6.3.3Internationaltrade 22
6.3.4Othercommercialeects 22
6.3.5Protability 23
6.3.6Certicationtootherstandards 24
6.4Responsesbysub-group 25
6.4.1Region 25
6.4.2 Size 25
6.4.3Lengthofcertication 25
6.5Respondentcomments 25
6.6Storylinesandatypologyofcerticationuse 26
6.6.1Factoranalysis 26
6.6.2Regression 27
6.6.3Clusters 27
30
31
33
51
7Conclusions
Bibliography
Annex 1. Basic statistics
Annex2.Factor,regressionandclusteranalyses

© Frenz Lambert 2021
LIST OF FIGURES
Figure1:Theneedtoprovidesafefoodasamotivationforcertication 16
Figure2:Theneedtomeetexistingcustomerrequirementsasamotivationforcertication 17
Figure3:Theneedtomeetpotentialcustomerrequirementsasamotivationforcertication 17
Figure4:Theneedtoincreasecompetitivenessinthedomesticmarketasamotivationforcertication 17
Figure5:Theneedtoimprovecompetitivenessinexportmarketsasamotivationforcertication 17
Figure6:Theneedtorespondtocompetitor’scerticationasamotivationforcertication 17
Figure7:Businessmodernisation 18
Figure8:Eciencyandinvestment 19
Figure9:Operations:training,productqualityandrecalls 20
Figure10:Competitiveness 21
Figure11:Growthinhomemarketsandabroad 22
Figure12:Othercommercialeects 23
Figure13:TheimpactonbusinessperformanceofBRCGScerticationcomparedtoothercerticationstandards 24
LIST OF TABLES
Table1:Objectivesandmotivationforcerticationtofoodsafetystandards 11
Table2:Challengesandcostsofcerticationtofoodsafetystandards 12
Table3:Outcomesofcerticationtofoodsafetystandards 13
Table4:GroupingsofFBOsbytypeofcerticationuse(strategicorientation) 27
Table5:GroupsofFBOsbysize 28
Table6:GroupsofFBOsbylocation 28
Table7:GroupsofFBOsbycerticatetype 29
Table8:FBOgroupsandchangeinsalesandprots 29

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© Frenz Lambert 2021
1 EXECUTIVE SUMMARY
1.1 PURPOSE OF PAPER
ThereisacommonviewthattherearebenetstoFoodBusinessOperators(FBOs)thatarecerticatedaswellasbrands
orretailersthatspecifythemwithintheirsupplychains.Whilethesebenetsarewellpublicised,priortothisstudy,there
hasbeenalackofhardevidenceontheeconomicandoperationalbenetstoeithercerticatedFBOsorinthewider
supplychain.
Thisresearchseekstoredressthislackofevidencebyusinginternalandexternaldatasetstoidentifythevalueof
certicationforcertiedFBOs,thewidersupplychain,andonsaferfoodforconsumers.Thispaperwillalsoexplore
whethercerticationtoBRCGSprogrammesprovidesadditionalvalueoverotherstandardsintermsoffoodsafety,top-
linegrowth,protability,modernisationandoperationaleciency.
Thishasbeencarriedoutthroughdemand-sideinterviewswithlargeBrands,areviewofextantliteratureoncertication
andfoodsafetystandards,anddatafromaround450responsestoasurveyofFoodBusinessOperators(FBOs).
1.2 SUMMARY OF MAIN OUTCOMES
TheempiricalevidenceindicatesthatcerticationtoBRCGSstandardsgeneratesextensiveandpositivebusiness
impactsforsuppliers,onascalegreaterthanmighthavebeenexpectedinthelightofpreviousresearch.Thisismore
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,protability,operationaleciencyandinnovation.
Thendingscanbecategorisedunderi)motivations/objectivesforcertication;(ii)thebusinessactionstakentoachieve
certicationand(iii)themajorimpactsonrmperformanceofcerticationandtheassociatedbusinessactions.
Motivations and objectives for BRCGS certication
• Inlinewithpreviousstudies,ensuringtheproductionofsafefoodisakeydriverforseekingcerticationwith80%of
 respondentscitingthisasaprimarymotive.
• 85%ofrespondentsstatedthatmeetingtheneedsofexistingcustomersisamajorfactor.Thisisasimilaraimto 
 meetingtherequirementsofpotentialcustomers.
• Enhancingcompetitivenessalsoemergesasakeydriverwith50%seekingdomesticgrowth,and61%growthin 
 overseasmarkets.
• Respondingtocompetitorcerticationisseenasanimportantfactorwith40%ratingitashighlyimportant.
The empirical evidence indicates
that certication to BRCGS
standards generates extensive
and positive business impacts
for suppliers.

3© Frenz Lambert 2021
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
SUPPLY SAFE
PRODUCTS
CURRENT
CUSTOMERS
POTENTIAL
CUSTOMERS
DOMESTIC
COMPETITIVENESS
EXPORT
COMPETITIVENESS
COMPETITOR
CERTIFIED
AGREE
NEUTRAL
DISAGREE
Impacts of BRCGS certication on business operations
• AkeyndingoftheresearchhasshownthatBRCGSstandards,whichdonotinthemselvesincludeinnovationasa
 purpose,actasadeterminantofbroad-basedinnovation.Thisincludesproductinnovation,operationaleciencyand
business expansion.
• InordertoobtaincompliancewithBRCGScertication,manybusinessesreportedthattheyhadundertakenchanges
 inbusinesspracticesorproductionresources.Thismodernisationincludesimprovingthestockofphysicalcapital 
 throughneworupgradedplantandequipment,whichwascitedby50%ofrespondents,27%hadupdatedtheiri 
 informationtechnology,and28%hadupdatedproductdevelopmentprocesses.Theseimprovementssupport 
 thegoalsoffoodsafetyaswellasproductivityandcompetitiveness.
• ThedatashowsthatBRCGScerticationhasbeenaspurtoinvestmentandmanagementchanges.70%of 
 respondentsstatedthatchangesinproductionmethodshadledtoecienciesandgreaterproductivity.50%have
 investedinnewtechnologyinordertoenablesafeandhighqualityfood.While30%statedthatcerticationhasledto
product innovation.
• OperationalimprovementshavebeenachievedthroughobtainingBRCGScertication,with63%reportingproduction
 improvements.Thisisevidencedthrougha40%reductioninfoodrecallssinceachievingcertication.
70% of respondents stated that
changes in production methods
had led to eciencies and
greater productivity.

4
© Frenz Lambert 2021
Competitiveness in domestic and export markets
• BRCGScerticationisassociatedwithexpandedmarketopportunitiesandachievedgrowth,inhomeandexport 
 markets(55%).IthelpsdrivecompetitivenessforlargesharesofFBOs,especiallyinexportmarkets(60%).
• Overonethirdofrespondentsquantiedtheirsalesgrowth,averagingaround7.5%(forthereportinggroup).
• Aroundonethirdreportincreasesinprotabilityresultingfromcerticationandtheassociatedinvestmentsand 
 adaptations,averagingaround6%(forthereportinggroup).
• AsmallproportionofFBOsreportedreducedcosts(17%)attributedtocertication,howevernearlyhalfofrespondents
 ndthatcerticationleadstofewercustomeraudits.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
UPDATE
PHYSICAL
CAPITAL
IT
INVESTMENT
CHANGE
PRODUCT
DEVELOPMENT
PROCESS
IMPROVED
ORGANISA-
TION OF
PRODUCTION
INVESTMENT
IN NEW
TECHNOLOGY
INCREASE
IN PRODUCT
INNOVATION
AGREE
NEUTRAL
DISAGREE
INVESTMENT
IN HUMAN
CAPITAL
IMPROVEMENTS
IN PRODUCT
QUALITY
FEWER
RECALLS
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
INCREASED
COMPETITIVENESS
IN HOME MARKET
INCREASED
COMPETITIVENESS IN
EXPORT MARKETS
REDUCTION
IN COSTS
INCREASED
PROFITABILITY
FEWER AUDITS
BY CUSTOMERS
AGREE
NEUTRAL
DISAGREE

5© Frenz Lambert 2021
A comparison between BRCGS and other standards
ManyrespondentsarecertiedtootherGFSIandnon-GFSIstandardsandwereableprovideinformationaboutthe
impactontheirbusinessofthesestandards.
• Around35%ofrespondentswithcerticatestostandardsinadditiontoBRCGSreportedanincreaseinsalesto 
 existingcustomersfollowingfromcertication.Thisresultissimilarto,butsomewhatlowerthan,forBRCGS 
 certication.
• 55%ofrespondentsexperiencedincreasedsaleshavinggainedcerticationtoBRCGS.Only44%ofrespondentswith
 othercerticationstandardsreportedincreasedsales.
• 26%ofrespondentsagreedthatsalesintheirhomemarkethadincreased,comparedto30%ofBRCGScerticated
respondents.
• 46%ofrespondentswithBRCGScerticationreportedincreasedsalesinexportmarkets,comparedwith42%for
 othercerticationstandards.
• SimilarlytotheshareofBRCGScertiedrms,around28%ofrespondentsagreedthatprotabilityhadincreased.
• Over40%ofrespondentsagreedthattherearefewercustomerauditsaftercerticationtoanotherthird-partystandard.
 Thiscompareswith48%withBRCGScertication.
60%
50%
40%
30%
20%
10%
0%
SALES TO
EXISTING
CUSTOMERS
FOLLOWING
CERTIFICATION
SALES TO NEW
CUSTOMERS
FOLLOWING
CERTIFICATION
SALES INCREASE
IN DOMESTIC
MARKET FOLLOWING
CERTIFICATION
SALES INCREASE
IN EXPORT MARKETS
FOLLOWING
CERTIFICATION
INCREASE IN
PROFITABILITY
FOLLOWING
CERTIFICATION
FEWER CUSTOMER
AUDITS FOLLOWING
CERTIFICATION
BRCGS
OTHER
55% of respondents
experienced increased
sales having gained
certication to BRCGS.

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© Frenz Lambert 2021
2 INTRODUCTION
Foodsafetystandardshavebeendevelopedoverthelast20yearstoprovideasystemofassurancethatfoodfrom
anysourceissafe.Partlyaresponsetosomehigh-prolefoodscares,butalsotheglobalisationoffoodsourcing.They
provideanexternallyvalidatedframeworkforassessingthesafetyandqualityoffoodproductionanddistribution.
Thewell-publicisedincidentsofcontaminatedorotherwiseunsafefoodsndingtheirwaytoconsumerstriggered
legislationbymanygovernmentsandtheconsequentestablishmentofregulationsthatseektoensurefoodsafety.
Theseframeworksofoversightofnationalandinternationalfoodchainshaveimpelledmajorfoodbrands,retailersand
thequick-servicerestaurantindustry(collectivelyreferredtohereinafteras“brands”)toundertakefoodsafetyauditsof
theirsuppliers.Sincemostfoodmanufacturersselltonumerouscustomers,whilebrandshavemultiplesuppliers,this
minimisesriskofinterruptiontothesupplychain.
Directauditingbybrandsofsupplierqualityandsafetycanbecostlyforallparties.Anothermotivation,thereforeforthe
developmentofprivatethird-partystandardswassomerationalisationofthenumberofauditsbythemajorcustomers
ofFBOs.Severaloftheleadingstandardshavebeendevelopedundertheleadershipofconsortiaofmajorretailers–
BRCGS1intheUK,IFS2inFrance,ItalyandGermany,andSQF3intheUS.Afurtherstagehasbeentheformationof
theGlobalFoodSafetyInitiative4(GFSI)toprovidebenchmarkingoftheoperatingcriteriaforprivatestandards.The
InternationalStandardsOrganisation5(ISO)hasalsopublishedafoodsafetystandard(ISO220006)buildingonthegeneral
managementstandardISO9001.Thiswasintendedtooeranalternativetomultipleauditsofsuppliersbybrands.The
ISOstandardonitsownisnotcompliantwithGFSIcriteriasinceitlackspre-requisiteprogrammes(whicharecoveredby
separateISOstandards)butarecentlydevelopedvariantFSSC220007doesfallundertheGFSIumbrella.
Foodcerticationhasemergedasarequirementtogainconsumercondenceandensurefoodsafetyacrossvarious
stagesinthesupplychain.Theglobalfoodcerticationmarketisforecasttogrow8duetoitsapplicabilityinawiderange
offoodproducts,increasedhealthandethicalconsciousnessamongconsumers,andmorecomplexsupplychains.Asa
result,foodmanufacturersandsuppliersareactivelyseekingISO22000,BRCGS,SQF,IFS,and‘free-from’certications.
BRCGS’sfoodsafetystandardwasthersttobebenchmarked.Nowinits8theditionwiththe9theditiontobepublished
in2022,thestandardhasevolvedtomeettheneedsofindustryandtoprotecttheconsumer.Itwastherststandardto
beGFSIbenchmarked,aswellasintroducefoodsafetyculturerequirements,denefoodfraud,andreduceauditburden
throughadditionalmodules.BRCGSappliesacomplianceprogrammetoensureconsistentauditoutcomesandresults
thatbrandscanrelyon.
BRCGSstandardsareusedbyover30,000sitesin130countries,andacceptedby70%ofthetop10globalretailers,
60%ofthetop10quick-servicerestaurants,and50%ofthetop25manufacturers9.FSSC22000certicationshave
beenadoptedby27,000sites,IFSin17,000sites,andSQFin10,000.Theglobalfoodandgrocerymarketsizewas
valuedatUS$11.7trillionin201910.20%ofthesesalesareplacedonthemarketbymanufacturersthatarecertiedtoa
GFSIcerticationprogramme11.BRCGScertiedFBOsaccountfor36%ofpost-farmgatesales,andthereforeimpacton
US$800billionofproductsales12.ThisexcludesthesignicantsalesmadeintheQuickServiceRestaurantsector.
1 https://www.brcgs.com/
2 https://www.ifs-certication.com/index.php/en/
3 https://www.sq.com/
4 https://mygfsi.com/
5 https://www.iso.org/
6 https://www.iso.org/iso-22000-food-safety-management.html
7 https://www.fssc22000.com/
8 FoodCerticationMarket–GlobalGrowthto2025,MarketsandMarkets,2020
9 Source:Deloitte,QSRMagazine
10 Source:GrandViewResearch(2019)
11 Source:GFSI,TheConsumerGoodsForum
12 Source:BRCGSinternalcalculations

7© Frenz Lambert 2021
3 SCOPE OF PAPER
ThereisacommonviewthattherearebenetstoFBOsthatarecerticatedaswellasbrandsorretailersthatspecify
themwithintheirsupplychains.Thesebenetsareunderstoodtoincludemarketaccess,operationalimprovementand
eciencies,andgreaterprocesscontrolleadingtolesswasteorproductrecalls.Brandsandretailersbenetbyrelyingon
3rdpartycerticationaspartoftheirsupplierapprovalandriskmanagementprocesses.Thisallowsthemtofocustheir
supplierauditsonareasofriskandpriority.
Whilethesebenetsarewellpublicised,thereisalackofevidencetosupporttheeconomicandoperationalbenets
toeithercerticatedFBOsorinthewidersupplychain.Thereissomeanecdotalevidenceandindividualcasestudy
information,howeverthereislimitedevidencetosupporttheseclaims.Thepurposeofthisresearchistouseinternaland
externaldatasetstoidentifythevalueofcerticationforFBOs,thewidersupplychain,andsaferfoodforconsumers.This
paperalsoexploreswhethercerticationtoBRCGSprogrammesprovidesadditionalvalueoverotherGFSIandnon-GFSI
standardsintermsoffoodsafety,top-linegrowth,protability,modernisationandoperationaleciency.
Thisreportcontainsthreemainparts:
1.Areviewofthedemand-sidebasedoninterviewswithlargebrands;
2.Areviewoftheextantliteratureoncerticationandfoodsafetystandards;
3.Analysisofresultsfromasurveyofaround450FoodBusinessOperators(FBOs).
Food certication
has emerged as a
requirement to gain
consumer condence
and ensure food safety
across various stages in
the supply chain.

8
© Frenz Lambert 2021
4 DEMAND SIDE BASED ON BRANDS INTERVIEWS
4.1 BENEFITS OF STANDARDS: THE VALUE TO BRANDS OF THIRD-PARTY STANDARDS
Thegroupofthird-partyfoodsafetystandardsweredevelopedinthelate1990sinresponsetotheincreasingdemand
forcloserscrutinyofthefoodsupplychain,toreducetherisksofcontaminatedordangerousfoodsndingtheirwayto
consumers.Legislationinseveralcountriesrequiredbrands,includingretail,QuickServiceRestaurantsandproducersof
brandedfoods,toexerciseduediligenceonsafetyissueswhenpurchasingfromanincreasinglyglobalsupplychain.This
includedsafetyauditsoftheirsuppliers.Ingeneral,supplierscouldbesellingtoseveralcustomers,whilebrandscouldbe
sourcingfrommanysuppliers.Thislevelofauditburdenimposedsubstantialcostsonsuppliers,manyofwhomaresmallrms,
whocouldbesubjecttomultipleauditsfromaproliferationof2ndpartystandards.Substantialcostswerealsoincurredby
brandsincarryingoutsomanyaudits,withduplicationofworkforthemanufacturersandexpensewithintheindustry,hence
thedriveforharmonisedstandards.
Soasolutionwasdevelopedthatinvolvedanindependentbodydevelopingstandards,inconsultationwithstakeholders,and
arrangingauditsandvisitsonbehalfofthebrands.Thiswasviewedasamoreecientprocess.IntheUKthiswassetup
undertheauspicesoftheBritishRetailConsortium13alobbyingorganisationrepresentingUKretailers.Similararrangements
werelaterdevelopedinotherpartsofEuropeandinNorthAmerica.
Themainbenetsliein:
• Feweraudits,reducingcostsforbrandsandfoodmanufacturers.
• Apublishedstandardwhichcanbedevelopedandrevisedovertime,withinputfrominterestedparties,including 
 brandsandthecerticationbodieswhocarryouttheaudits.Forexample,theBRCGSfoodstandardisatversion8, 
 withversion9duetobepublishedin2022.
• Foodmanufacturerswhoarecertiedtooneormoreofthefoodsafetystandardsthusdemonstratebasiccompetenceto
 actualandpotentialcustomersinanobjectiveway.Thisenablesbrandsthemselvestofocustheirinquiriesto  
 suppliersontheirownmorespecicrequirements.
• Certicationisalsoasignaltothemarketthathereisasoundsupplier,thusenablingcompetitionandsupporting 
 internationaltradebyprovidinginformationatlowcostontheavailabilityofreliablesources.
• Suppliersthemselvesbenetfromtheexternal,expertscrutiny,astheycanembedthegoodpracticesneededfor 
 certicationintotheirownproceduresandthuscontinuouslyimprovethebusinesswhilesupplyingsafefoodtoconsumers.
4.2 LIMITATIONS OF THIRD-PARTY STANDARDS
Third-partystandardsprovideanoverallframeworkthatcomplementsbasicGoodManufacturingPractice(GMP)andHazard
AnalysisandCriticalControlPoint(HACCP)principles.Firstandsecond-partyauditscanbemorespeciedandallowfora
deeperexplorationofanygivenoperationalrequirement.Brandsthereforehavegreatercontrolindirectingtheauditprocess
accordingtotheirneed.
Theprocessforthird-partyauditsisclearlydenedanddoesnotpermitauditorstoprovideadviceorguidanceto
manufacturersthatmighthelpwithimprovingthesafetyandthequalityoftheirproductsandprocesses.Theirroleistoassess
andreportoncomplianceandnon-complianceswithinthetermsofthestandardinaconsistentway.
Whilethesetrade-osareacceptable,togaintheecienciesofthethird-partystandardsframework,brandsarekeentoensure
thatcerticationprogrammeowners(CPOs),suchasBRCGS,maintainthecompetenceandeectivenessofthecertication
bodiesandthereliabilityoftheauditstheycarryout.
Itwasalsoreportedthatbrandswouldstillfacethestructuralissuesofsourcingreliableaudits,evenabsentthethird-party
standardsframework.Inaddition,brandsmayengageinauditsandsitevisitsoftheirown,tosupplementthethird-party
processesandtomaintaintheirowncondencethatthethird-partystandardsremaintforpurpose.
4.3. DO BRANDS ONLY ACCEPT CERTIFIED SUPPLIERS?
Thebroadpictureisthatbrandsrequirethattheirrst-tier–directsuppliers–shouldbecerticatedtooneoftheavailablethird-
13 https://www.brc.org.uk/

9© Frenz Lambert 2021
partystandards.SomemandateaparticularstandardwhileothersinprinciplewillacceptanypertinentGFSI14benchmarked
standards,suchasBRCGS,FSSC22000,SQForIFS.
Theymayexpressapreferenceforoneorotherofthese.Whilesomespeciersrequirecerticationfurtherupthesupply
chain,itisnotcommon,however,butthemajorityexpecttheirrst-tiersuppliersthemselvestoensurethesafetyofboughtin
ingredients.FailuresupthesupplychainwilltriggerinvestigationsbythebrandsthemselvesandcomplaintstotheCPOsand
certicationbodies.Retailersrequirecerticationoftheirsuppliersofownbrandproducts.Manufacturersofbrandedgoodsare
responsibleforensuringsafeproductionintheirownsuppliers.
4.4 ARE THERE PARTICULAR ADVANTAGES AND DISADVANTAGES OF WORKING WITH BRCGS STANDARDS?
TherewasagreementamongthebrandsinterviewedthatBRCGSprovidesmanybenets,andBRCGSstandardsare
perceivedasanespeciallygoodexampleofaGFSIbenchmarkedCPO.
Thestandardiswelldenedandregularlyrevised.BRCGSprovidestrainingtomanufacturersandauditors,usefulinformation
andothervalue-addedservices.BRCGSisalsoperceivedtobeopentoideasandwillingtotakeinputfromallstakeholders.
Thepotentialdownside,ofanyofthefoodsafetystandard,thatneedstobecarefullyscrutinised,isthequalityofauditing.
BRCGSwaswidelyviewedtobeanexampleofgoodpractice,withtrainingofauditorsandacomprehensivecompliance
programmethatsystematicallyreviewsauditperformance.
4.5 IMPACT OF THIRD-PARTY STANDARDS ON DIRECT AUDITING
Manybrandscontinuetohavetheirownprogrammeofauditsandsitevisits,toensurethattheythemselvesmeettheneedfor
duediligenceinmanagingtheirsources.TheGFSIstandardsprovideasoundbaseline.Buttheycannotcoverallthespecics
foreverybrand.Consequently,thereareadditionalinspectionsthatmaybebasedonanassessmentofrisk,butdonotcover
thesamegroundastheGFSIaudits,butexplorethebrands’specicneeds,whichtheywouldnotperhapswishto“pool”in
thethird-partystandards.
Visitstositescanbemoreinthenatureofoverallassessmentsofmanufacturerquality,overandabovethefactorscodiedin
thethird-partystandards.Theycaninvestigatethemanufacturers’facilitiesandapproachtoproductionforaparticularbrand,
whichmightnotbeselectedforclosescrutinyduringthegeneralauditsagainsttheGFSIstandards.Theycanalsoinclude
elementsofadviceandmentoring,supportingsupplierstoenhancequalityaswellassafety,andtothereforegrowtheir
businesswithvariousbrands.However,anunderstandingofmanufacturers’operationscanalsoinformbrands’inputsinto
revisionsofthestandards.
4.6 IMPACT OF THIRD-PARTY STANDARDS ON FBO COMPETITIVENESS
Certicationisperceivedassupportingmanufacturers’competitiveness.First,byensuringbasicsafety,whichprovides
credibilityinthemarketplace.Second,winningcontractsfrommajorbrandsraisestheproleandreputationwithotherpotential
customers,andsoitisaplatformforFBOgrowth.
4.7 STANDARDS CONVERGENCE AND THE FUTURE OF THIRD-PARTY STANDARDS
Judgingbyourowninterviewswithbrandowners,thereisnoapparentexpectationof,orenthusiasmfor,futureconvergence
toasinglestandard.Althoughthediversityofstandardsmightappeartonullifyoneofthemainbenetsoftheemergenceofthe
third-partyframework,thatdiversitymaintainsanelementofchoiceforFBOsandbrandsandcompetitionbetweenCPOs.
Thelatterstimulatesaprocessofrevisingthestandardsonaregularbasis.Adegreeofco-ordinationthroughGFSI
benchmarkingandtheirorganisingofinternationalnetworkinghelpstomaintainquality.GFSIthemselvesmaynothave
theresourcestodevelopasinglestandard,anditisperceivedasunlikelythatCPOsandbrandswouldsupportsucha
development.
Anothercandidateforasinglestandard–ISO22000–hasnopre-requisiteprogrammes.ThesearedenedontheISOwebsite
as“(PrerequisiteProgrammes-Allfoodbusinessmusthaveinplaceprerequisiteprogrammes(PRPs).Thesearegoodhygiene
practicesthatarethebasicconditionsandactivitiesnecessarytomaintainahygienicenvironment.FBOsmustalsoconsider
maintenanceofthecoldchainandallergencontrolwhenputtingPRPsinplace.)”AGFSIbenchmarkCerticateProgramme
Owner–FSSC22000-hasbuiltonthebasicstandardbyaddingPre-requisiteprogrammes.
14 GFSIaimsforthecontinuousimprovementoffoodsafetymanagementsystemstoensurecondenceinthedeliveryofsafefoodtoconsumersworldwide.Activitiesincludethedenitionofrequirements
 forfoodsafetyschemesthroughabenchmarkingprocess.

10
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5 LITERATURE REVIEW
Thissectionisabriefreviewofsomeofthepublishedresearchintotheimpactofprivatefoodstandards,includingthe
eectsoninternationaltrade,foodsafetyandonindividualFBOs.
5.1 INTERNATIONAL TRADE
FBOscertiedtofoodsafetystandardsareabletooertheirproductworldwidewiththeircerticatebeingacceptedas
demonstratingsafeandgoodqualityfood.Thestandardsarethussimilartoothertechnicalandmeasurementstandards
thatareacceptedinternationallyasprovidingassuranceofreliability.Theyacttoreducenon-taribarrierstointernational
trade,enablingexportsbyboththecountriesdevelopingthestandardsandothernationswhoseproducersarecertied
toit.Animportantresearchquestionisthereforehowtheyareeectiveastradepromoters.Researchhasfocussedon
relatingtradevolumesinagriculturalandfoodproductstothenumberofcerticationstoastandardintheexporting
country.Indicatorshavebeenthenumberofcerticationsforoneorotherstandards,nottheaggregateofallsuch
certications.
Theprimaryresultshaveshownthatintensityofcerticationsdoespromoteexports–thereisareductioninbarriers
totrade.Somepapershavereportedthatthiseectisinsignicantorevennegativefordevelopingorlowerincome
countries.Astudy(Mangelsdorf,2016)oftherelationshipbetweentheexportsofmanycountriesandthenumberof
certicatestotheInternationalFeaturedStandard(IFS)heldfoundthatthereisingeneralapositivelink–morecerticates
leadtomoreexports.Thismayinpartbeattributedtoknowledgetransferthroughthecerticationprocess.Butthis
positiveeectisabsentforcountriesinAfrica,interpretedasindicatingalackofknowledgetransferthroughcertication
inthatcontinent.Usingthesamedataset,anotherpaperndsthatcerticationtotheIFSstandardstimulatestradeows
betweenpairsofhigherincomecountriesbutcanhaveanegativeeectonexportsoflowerincomecountries(Ehrich&
Mangelsdorf,2016).
Buttheremaybedierencesintheeectsofcerticationbetweenagriculturalproductsandmanufacturedfoodproducts.
CerticationtotheAgriculturalProductsStandard,GlobalGaphasbeenreportedtostimulateexportsoffoodfromless
developedcountriestoEurope(Andersson,2019).ThepaperalsoreportsresultsfromresearchintoFBOsinFrance
whichfoundthatBRCGScertiedrmsweremorelikelytoexportthannon-certiedorthosewithothercerticates.
Kim(2021),whousesthenumberofISO22000certicatesastheexplanatoryvariablendsthatthereisanegativeeect
ontheexportsofprocessedfoods,whichtendtobemoretheprovinceofdevelopedeconomies.Buttheeectispositive
onagriculturalexports,whichistakentoindicatethatdevelopingcountries’exportsarenotdiscriminatedagainstbythe
use of food safety standards.
5.2 PRODUCT RECALLS
Somepaperspublishedrecentlyhavereportedincreasingnumbersoffoodproductrecalls,especiallyintheUS(Potter
etal.,2012;Page,2018).Thesecanhavesignicantcostsfortheproducers.Onestudyfoundthatthestockmarket
valueofarmwitharecallwithpotentiallyserioushealthconsequencesfellbyanaverageof1.15%within5daysofthe
announcement(Pozo&Schroeder,2016).Buttherewasnoimpactforarecallwithonlyaminorhazard.
Theupwardtrendinrecallshascoincidedwiththeincreasingavailabilityoffoodsafetystandards.Undertakingprocess
reformstoattaincerticationtooneofthesestandardsisanoptionforfoodbusinesseslookingtoreducetheriskof
problemsleadingtorecalls.ResearchforanMScthesis(Zhang,2016)foundthattheexperienceofaproductrecalldid
leadtoahigherprobabilityofseekingcerticationtoastandard.Thethesisalsoreportsthataformulaforestimatingthe
directnancialcostsofarecall(publicity,productretrievalanddisposal)hasbeencalculatedas(retailpricex3xvolume
ofproductrecalled).
Acontributoryfactortotheupwardtrendhasbeentherapiddevelopmentinsurveillancesystemsandcapabilityby
regulatorybodies,lowertolerances,betterandincreasedmonitoringandreporting,andincreasedrangeofhazardsthat
cantriggerarecall.Operationalratherthanbiological/chemicalhazards,especiallyundeclaredallergens,havebecomethe
reasonforthemajorityofrecalls(Page,2018).
5.3 MICRO LEVEL – SURVEYS
Thereareseveralexamplesofresearchontheexperienceofbusinessesofcerticationtofoodstandardsundertaken

11 © Frenz Lambert 2021
throughsamplesurveys.Mostoftheseworkedwitharelativelysmallsample,intherangeof40to350responses.The
questionsweremostlyrelatedtomotivesforseekingcerticationtoastandard,andtheconstraintsorproblemsintheir
implementation.Therewereratherfewerattemptstoengagewiththeenterpriseleveleectsandevenlesscoverageof
tangiblecommercialbenets.Mostofthesurveysuselikertscalestogaugetheimportancetotherespondentsofaseries
ofpropositionsaboutthevariousaspectsofcertication.
5.3.1 OBJECTIVE AND MOTIVATIONS FOR CERTIFICATION
Insummary,thehighestratedmotivationstendtobethecorepurposesofthethird-partyfoodstandardssystem,namely
saferfoodandacceptabilityoraccesstomajorretailcustomers.Surprisingly,commercial,marketmotivationsand
benetsweregenerallyratedlower,althoughitmustbeborneinmindthatthesurveyquestionnairestendedtooerfewer
propositionsintheseareas.
AsmallsurveyinPortugalwith62respondentscertiedtoISO22000(TeixeiraandSampaio2013)reportedthat3ofthe
top4motivationsrated‘Important’or‘MostImportant’bythelargershareswereCondenceofConsumers,Customer
Requirements,CommitmenttoProductSafetyandMarketDierentiation,whichwasthethirdhighestranked,perhaps
pointingtocompetitiveadvantageasaconsciousobjectivethatwasnotfullybroughtoutinthisstudy.
Astudyofanachievedsampleof192Agri-foodbusinessesinItaly(Spadonietal.2014),whichwereBRCGScertied,
withquestionsusinga7pointlikertscales,includedmotivations,howeverthepaperdoesnotreporttheresultsforthese.
Theysuggestatheoreticalframeworkforunderstandingtheroleofprivatefoodstandards.Thisisbasedontheconceptof
productcharacteristics,whichincludeCredenceAttributes-assertedbyexpertsorknowledgeableusers,andsocanbe
believedbyconsumersandPotemkinattributes,whichcanbeclaimedbutarenotobservableevenbyexternalexperts15.
Table1showsthefourmosthighlyrankedobjectivesfromseveralsurveysofusersoffoodsafetystandards.Theseare
largelyconcernedwithimprovingtheperceptionofthebusinessbycustomersandconsumers.
Table1:Objectivesandmotivationforcerticationtofoodsafetystandards
5.3.2 CHALLENGES AND COSTS OF CERTIFICATION TO FOOD SAFETY STANDARDS
Thestudiesreviewedwereheavilyfocussedontheconstraintsorchallengesfacedbybusinessesinimplementingthe
variousfoodstandards,perhapsgivinganimpressionslightlybiasedtowardsthenegative.Thedirectcostofadoptinga
standardwasfrequentlycited,(Rincon-Ballesterosetal.,2019;Casolani,Liberatore,andPsomas2018)particularlyfor
smallerbusinesses.
Similarly,theburdensofperceivedbureaucracy,whosepurposeswerenotwellunderstood,waswidelycited(Escanciano
andSantos-Vijande2014a).Somequalitymanagerswereconcernedaboutaperceivedrigidityofapproachbyauditors,
whodidnotadapttheirassessmentstothecircumstancesofindividualFBOs.Alsoimportantweresomeinternal
constraintsonimplementingthechangesinorganisationandbusinessprocessesneededtoachievecerticationtoone
ofthestandards.Theseincludedlackofskillsofemployeesandtheirresistancetochange(MensahandJulien2011;
TeixeiraandSampaio2013).Thelevelofemployeeskillsandthecostsoftrainingtoachievetherequiredlevel,together
withresistancetochangesinpractices,werealsoreportedasamongstthemainconstraintsonimplementationbyChen
etal(2015).However,thesebarrierswereovershadowedbythedirectcosts-paperworkandprocessdevelopment.
Table2summarisesthemainndingsonchallengesandcostsfromtheliterature.
BRCGS
(Rincon-Ballesterosetal.,
2019)
Productsafetyandquality
Consumerwelfare
Accessforeignmarkets
Ethicalprinciples
BRCGS
(MensahandJulien2011)
Productquality
CustomerRequirement
RegulatoryRequirement
Marketingadvantage
ISO 22000
(TeixeiraandSampaio2013)
Consumercondence
Customerrequirement
Marketdierentiation
Foodchainproductsafety
ISO 22000
(EscancianoandSantos-
Vijande2014b)
Improveimageinthe
Market
Improvequalityandsafety
Achievecustomer
condence
Future competitive
advantage
15 ThisideaisexplainedbyBecker(1999)as‘placeboeect’or‘potemkineect’withtheexampleofpublicregulatorysupportunlinkingtheimportanceof‘countryoforigin’asanindicatorofquality.

12
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Table2:Challengesandcostsofcerticationtofoodsafetystandards
5.3.3 OUTCOMES OF CERTIFICATION TO FOOD SAFETY STANDARDS
Themostimportanteectsoroutcomesforbusinessesofadoptingafoodstandardreportedintheliteraturehave
clusteredaroundinternaloperationalimprovements(MensahandJulien2011;Spadonietal.2014)andexternal
reputationandimageeects-perceivedasasupplierofsafefood(TeixeiraandSampaio2013)16.
Certicationprovidesassurancethatgoodsafetypracticesarebeingfollowed(EscancianoandSantos-Vijande2014a).
Directmarketandcommercialgainsgenerallyhavealowerprolebutare,byimplication,expectedtoarisefrom
competingonperceivedquality.
ApaperonthenancialperformanceofPolishsmalltomediumsizedbusinesses(SMEs)(Kafel&Sikora,2012)foundthat
resultswerebetterforthosecertiedtotheBRCGSorIFSstandardsbutwerebetterstillforthosewhoalsoholdtheISO
900117managementstandard,pointingtothescopeforcomplementaritybetweengenericandfoodsafetystandards.
Thestudywasbasedonjust30businessessocannotbetakenasdenitive.
Improvedbusinessperformancewasalsoreportedinapaperbasedonasurveyof210businesseswithHalalFood
CerticationinMalaysia,whichisarguedtobestrictandcomprehensiveenoughtobeequivalenttooneoftheFSMS
standards.Table3summarisesthemainndingsonoutcomes.
BRCGS
(Rincon-
Ballesterosetal.,
2019)
Financial
constraints
Lackof
favourable
institutional
environment
Organisational
resistance
Lackof
information and
support(FSMS)
ISO 22000
(Teixeiraand
Sampaio2013)
Internal
resistance to
change
Direct costs
Employeeskills
Takeupof
employeetime
ISO 22000
(Escancianoand
Santos-Vijande
2014b)
Notaprerequisite
fordoingbusiness
ISO22000not
wellknown
Highcostsof
implementation
Notrequiredby
government
ISO 22000
(Escancianoand
Santos-Vijande
2014b)
Excessive
demands on time
and resources
Excessive
formalism
Thevolumeof
documentation
required
Highcost,
nancial
constraints
ISO 22000
(Casolani,
Liberatore, and
Psomas2018)
Costfor
certication
Slowsdown
some procedures
Lackof
international
consumer
expectations
Notexible
BRCGS
(Mensahand
Julien2011)
Employee
resistance to
change
Lackoftechnical
knowledgeand
skillofemployees
Lackof
awareness of
requirements
Highcostof
developmentand
implementation
Certication provides assurance
that good safety practices are
being followed
(Escanciano and Santos-Vijande 2014a)
16 WHOalsoreportthatover70%ofrespondentswerecertiedtomorethanonestandard.
17 https://www.iso.org/iso-9001-quality-management.html

13 © Frenz Lambert 2021
Table3:Outcomesofcerticationtofoodsafetystandards
5.3.4 DERIVED INDICATORS
Someofthesurveyedpapershaveappliedexploratoryfactoranalysistotheirdatainordertogeneratesummary
indicators.Thesecanbeinterpretedasthemorefundamentaldimensionsoffoodbusiness’purposesandoutcomesfrom
certication.
Thespecicquestionsinthesurveyscanthenbeunderstoodasthefacetsorbuildingblocksofthesecoreconceptsof
theeectsofcerticationtoastandard.Oneexampleisthederivationofsummaryindicatorsbyfactoranalysisfrom120
responsestoasurveyofUKFoodManufacturers(MensahandJulien2011).
NearlyallofthesewerecertiedtotheBRCGSstandard.Factor1concernsengagementwithinternalandexternal
stakeholders-employees,governmentand‘learningcentres’.Factor2isaboutupgradingsystemsandstaand
BRCGS
(Spadonietal.2014)
TheHACCPsystem
ismoreecient
Astrongcommitment
was necessary for
thetrainingand
qualicationofthe
personnel
Intensicationand
better interpretation
ofmonitoring
procedures on
chemicalandphysical
contamination,GMO
andallergens
Anenhancement
ofimageand
anincreasingof
reputation towards
customers occurred
Also important:
TheBRCGS
approachisalso
eectiveduringthe
publicbodiesaudits
Internalauditsystem
(asdescribedinthe
BRCGSstandard)
hasalloweda
self-evaluationmore
eective
ISO 22000
(Casolani,Liberatore,
andPsomas2018)
Improvingcapacityto
access domestic and
internationalmarkets
Improvingproduct
safety
Improvingtraceability
Demonstration of
improved safety
ISO 22000
(TeixeiraandSampaio
2013)
Improved
methodologiesand
practices
Improved customer
satisfaction
Improved consumer
condence
Improved food safety
ISO 22000
(Escancianoand
Santos-Vijande
2014a)
Bettermanagement/
controloffood
hazards
Improvedimagein
themarket
Facilitates
compliancewithfood
safetylegislation
Betteremergency
response
BRCGS
(MensahandJulien
2011)
Increased customer
satisfaction
Improvedinternal
procedures
Improved product
quality
Compliance
withregulatory
requirements

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standardprocessesandmakingthisacontinualpartofthebusinessprocess.Factor3includestrainingoftheirownsta
andsuppliermanagement.Thenalfactoristopmanagementcommitment,whichissuggestedtobeaprecursortothe
restandisanessentialpartofmostofthestandards.
Anotherexampleoffactoranalysiswasappliedtoanachievedsampleof192agri-foodbusinessesinItalywhowere
BRCGScertied(Spadonietal.2014).Thesurveygenerated28variables,whichwerereducedto8summaryvariables
byusingfactoranalysis.Thesearelabelledbytheresearchersas:
• Compliance;
• Teaminvolvement;
• Resourcemanagement;
• Managementofinspection;
• Relationshipmanagement;
• Reducedautonomy;
• Auditeciency.
Thelasttwoofthesemakesmallcontributionstotheexplanatoryeectoftheanalysis.Thepapertakesthefurtherstep
ofderiving,byclusteranalysis,vegroupsofbusinesseswithsimilarpatternsoffactorscores.
Theseareinterpretedas:
• Conformers-Themajority(nearly50%)whoadoptedthestandardasacustomerrequirement,butfeltittobe 
 somewhatofaconstraintontheirfreedomofaction.
• Opportunists-Agroupwhichfoundbenetsmainlyinimprovedexternalrelationshipsincludingmarketing,butdidnot
 considerthatthestandardhadbeenimposed.
• Unconcerned-Athirdclusteridentiedasnotperceivingsignicantbenetsthemselvesbutobligedbycustomersto
 gaincertication.
• Unaware-Aclusterwhondthestandardenhancesteamwork,supportedbytraining.Buttheydonotseemtohave
 exploitedtheopportunitythuscreatedtoenhancetheirmarketposition.
• Consolidated–Asmallclusterthatndthestandardhelpfulforteaminvolvement,buildingonexistingoperating 
 strengthsandintegratingotherqualitymanagementsystems.Thisgroupiscomposedbycompaniesthatingeneral
 didnotperceiveanyspecicimpactoftheBRCGSimplementationbuttheystronglyagreeontheeectsof 
 BRCGSintermsofteaminvolvementandauditeciency.
Insummary,thesecategoriesimplyarelativelypassiveattitude,withlimiteduseofcerticationstatuspro-activelyto
achievemarketorcommercialadvantage.Butthegroupsidentieddisplayaplausiblerangeofattitudes.
Astudyof192foodbusinessesinSpaincertiedtoISO22000(EscancianoandSantos-Vijande2014)alsoderivedtwo
setsoffactorssummarisingproblemsandbenets.Thisisalimitinguseofthetechniquesinceitmaintainsthehardand
fastdistinctionunderlyingthesurveyquestions.Poolingthedatafromasurveyenablestheidenticationofmorecomplex
interactionsandpatternsofcommonalityacrosstheinitialcategories.
Problems
• “organizationalresistance”includingemployeeattitudes
• “bureaucracyandcost”similarlytostudiesofimplementingothermanagementsystemsandstandards.
• “unfamiliarity”-limitedawarenessofimplicationsofthestandards.
Benets
• “improvedfoodsafety”
• “commercialbenets”especiallyaccesstointernationalmarkets.
• “internaleciency”involvingimprovedcommunicationsandresourcemanagement
• “improvedcompetitiveposition”

15 © Frenz Lambert 2021
• “improvedcommunication”
• “technologicalimprovement”-betterpremisesetc.
Therearesome,butlimited,similaritiesbetweenthesummaryindicatorsderivedbythesestudies,mainlyaroundinternal
teamsandtheirdevelopment,externalrelationshipsandmanagementofresources.Communicationsandimproved
competitivepositionalsoemergedasunderlyingaspectsofcertication.

16
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6 EMPIRICAL RESEARCH
Amajorpartofthiseconomicresearchprojectisasurveyoffoodcompanies(FBOs)certiedtoBRCGSstandards.
Thissectionpresentsthemainndingsfromthesurveyandputstheseinthecontextsoftheotherfacetsofthestudy,
includingthereviewofrelevantpublicationsandinsightsprovidedbyinterviewswithbrandrepresentatives.
EarlierresearchemphasisedthemotivesforFBOsinseekingthird-partycertication.Asthesestandardshavedeveloped
mainlythroughtheleadershipofmajorbrands,whoarethedirectcustomersofFBOs,itisnotsurprisingthattheneed
tomeettherequirementsofthesecustomers,enshrinedinthestandards,hasbeenaprimarydriveroffoodcompanies’
adoptionofthestandardsandthecerticationprocessthatgoeswiththem.Thesestudiesdidnotcitetheimpactson
sales,costsandprots,andonmarketaccessandcompetitivenessrelatedmotivations.
Acoreobjectiveofthisstudyhasthereforebeentoexploreinmoredetailthemarketandcommercialaspectsofthird-
partystandards,includinghowtheyenterFBOs’objectivesforseekingcertication.So,thecurrentsurveyinstruments
havefocusedmoreonthebusinessdimensions,aswellasincludingfoodsafetyaspects.
Atotalof451businessesrespondedtothesurveyfromawiderangeofgeographiclocationsacrossEurope,North
America,SouthAmerica,AsiaPacictheMiddleEastandAfrica.Respondentscoveredawiderangeofproductsand
standards,includingnon-food.Afullbreakdownofterritory,businesstypeandsizeisavailableinAnnex1.
Thendingsaresetoutundertheheadingsofi)motivations/objectivesforcertication;(ii)thebusinessactionstakento
achievecerticationand(iii)themajorimpactsonrmperformanceofcerticationandtheassociatedbusinessactions.
6.1 MOTIVATIONS AND OBJECTIVES FOR CERTIFICATION
Figure1:Theneedtoprovidesafefoodasamotivationforcertication
Similarlytotheresultsofearlierresearch,over80%ofrespondentsseeensuringthattheirproductsaresafeasahighly
importantreasonforcertication.
0
MOST IMPORTANT
HIGHLY IMPORTANT
SOME IMPORTANCE
NEITHER IMPORTANT OR UNIMPORTANT
NO IMPORTANCE
NOT APPLICABLE/DON’T KNOW
5045403530252015105
Percentage of respondents (%)
Over 80% of respondents see
ensuring that their products
are safe as a highly important
reason for certication.

17 © Frenz Lambert 2021
0
MOST IMPORTANT
HIGHLY IMPORTANT
SOME IMPORTANCE
NEITHER IMPORTANT OR UNIMPORTANT
NO IMPORTANCE
NOT APPLICABLE/DON’T KNOW
302010
Percentage of respondents (%)
5040 0
MOST IMPORTANT
HIGHLY IMPORTANT
SOME IMPORTANCE
NEITHER IMPORTANT OR UNIMPORTANT
NO IMPORTANCE
NOT APPLICABLE/DON’T KNOW
302010
Percentage of respondents (%)
5040
Figure2:Theneedtomeetexistingcustomerrequirements Figure3:Theneedtomeetpotentialcustomer
asamotivationforcertication    requirementsasamotivationforcertication
Inlinewithpreviousstudies,over85%reportedtherequirementsofcurrentcustomersashighlyimportantmotives
forcertication.Asimilarnumberofrespondentsreporttherequirementsofpotentialcustomersasahighlyimportant
motivation.
Figure4:Theneedtoincreasecompetitivenessinthe Figure5:Theneedtoimprovecompetitivenessinexport
domesticmarketasamotivationforcertication  marketsasamotivationforcertication
Enhancingmarketcompetitivenessalsoemergesasamajordriver,withover50%citinghomemarketcompetitiveness.
61%ofbusinessesreportcompetitivenessinexportmarketsasahighlyimportantfactorinseekingcertication.Food
companiesperceivethatcerticationtoathird-partystandardactsasacompetitiveweaponinseekingtowidenand
deepentheircustomerbase.
Respondingtocompetitors’certicationwasalsoafactorformanyFBOsbutonly40%sawitashighlyimportant.
Figure6:Theneedtorespondtocompetitor’scerticationasamotivationforcertication
0
MOST IMPORTANT
HIGHLY IMPORTANT
SOME IMPORTANCE
NEITHER IMPORTANT OR UNIMPORTANT
NO IMPORTANCE
NOT APPLICABLE/DON’T KNOW
302010
Percentage of respondents (%)
5040 0
MOST IMPORTANT
HIGHLY IMPORTANT
SOME IMPORTANCE
NEITHER IMPORTANT OR UNIMPORTANT
NO IMPORTANCE
NOT APPLICABLE/DON’T KNOW
302010
Percentage of respondents (%)
5040
0
MOST IMPORTANT
HIGHLY IMPORTANT
SOME IMPORTANCE
NEITHER IMPORTANT OR UNIMPORTANT
NO IMPORTANCE
NOT APPLICABLE/DON’T KNOW
252015105
Percentage of respondents (%)
30

18
© Frenz Lambert 2021
Seekingcerticationinordertogaincompetitiveadvantagecanbeseenasapro-activeuseofthestandardssystem.This
issimilartothewaysinwhichtechnicalandotherstandardspublishedbyISOandnationalstandardsbodiesareusedas
knowledgeinputsbyinnovativebusinesses(egTempleetal,2005).
6.2 IMPACTS OF CERTIFICATION ON BUSINESS OPERATIONS
WenextturntothesurveydataonFBOimplementationofbusinessactionstomeettherequirementsofBRCGS
standards.Theseincludedexpenditureonenhancingthecapabilitiesoftherm’sdaytodayoperations,aswellas
investmentsincapacityanddevelopmenttopresentamorecompetitiveoeringtothemaincurrentandpotential
customers.RespondentsalsoreportedontheirviewofthedirectcostsofacquiringandmaintainingtheirBRCGS
standards,andonthecostsofpaperworkandreportingassociatedwithcertication.Thesetoocanberegardedas
aformofinvestmentingainingthemarketcredibilitythatcomeswithcerticationtooneoftheleadingfoodsafety
standards.Thedataalsoincludesasetofperformanceoutcomescoveringgrowthinsales,exportsandprotability.
Themainpurposeoffoodsafetycerticationistoreducetheriskstoconsumersfromunsafefoodenteringthesupply
chain.Fromthatperspective,improvementsinbusinessperformanceareinsomerespectsanunanticipatedbonus,and
theappropriatebenchmarkforassessingtheirscaleiszero.Theextensiveandintensiverangeofimpactsreportedinthe
followingsectionscanthusbeseenasimpressiveandasexceptionalbenetsforBRCGScertiedFBOs.
6.2.1 MODERNISATION
AsonedimensionofthemultiplewaysofmeetingtherequirementsoftheBRCGSstandards,asubstantialshareofthe
FBOsrespondingtothesurveyhadundertakenchangesinbusinesspracticeorintheirproductionresourcesthatcan
bestbeinterpretedasmodernisation.Aspectsofthishaveincluded:
• Improvingthestockofphysicalcapitalthroughneworupgradedplantandequipmentwascitedby50%of 
 respondents.Betterproductionfacilitiesshouldcontributetoachievingthegoalsoffoodsafetyaswellasproductivity
 andcompetitiveness.Around27%hadupdatedtheirinformationtechnology.
• Changestotheproductdevelopmentprocesswerereportedby28%ofbusinesses.
Figure7:Businessmodernisation(Source:owncalculations)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
UPDATE PHYSICAL
CAPITAL
AGREE
NEUTRAL
DISAGREE
UPDATE IT CHANGE PRODUCT
DEVELOPMENT
PROCESS

19 © Frenz Lambert 2021
6.2.2 EFFICIENCY AND INVESTMENT
Thecerticationprocesshasbeenaspurtoarangeofinvestmentandmanagerialchangesthatarelikelytohaveraised
thelevelofeciencyandopenedexpansionopportunities.Examplesoftheseinclude:
• Changesinorganisationhasbeenespeciallywidespread,withnearly70%ofrespondentsinagreementthatthiswas
 oneoftheeects.Itisplausiblethatexternalscrutinyoftheiroperationsandtheavailabilityofacodiedsummaryof
 goodpracticeinproducingfoodsafelywerehelpfulinputstoFBOswillingtomakechangestotheiroperations.
• Nearly50%ofrespondentsagreethattheyhaveinvestedinnewtechnology,whichshouldfurtherenable  
 consistentlysafeandhigh-qualityfoodproductionanddistribution.
• Aswellaseciencygains,thecerticationprocesshasbeenassociatedwithincreasesinproductinnovationfor30%
 ofrespondents.Thisisastrikingresultastheinitiativeinnewproductdevelopmentmightbeexpectedtolielargelywith
 majorbrands,ratherthanFBOs.
Themajorityofthosenotreportingeciencyandinvestmentgainswereneutral,withonlylowsharesbeingsurethat
thesechangeshadnotoccurredintheirbusiness.
Figure8:Eciencyandinvestment(source:owncalculations)
6.2.3 OPERATIONS
Aswellastheinvestmentincapital,ITandorganisationalchange,thevastmajority–85%ofrespondentshaveenhanced
theiremployeeshumancapitalbyinvestingintrainingaspartoftheiradoptionofBRCGScertication.Theskilland
commitmentofstaisacrucialelementinachievingandmaintaininghighqualityproductionandcontributingtoan
environmentthatconsistentlysuppliessafefood.Trainingalsoenhancesthefutureemploymentprospectsofstaand
helpstoraisethelevelofskillsfortheindustryasawhole.
Investmentsinoperationalchangearealsoassociatedwithbetterqualityproducts,withmorethan63%ofrespondents
reportingimprovements,whiletheeectsonfoodsafetyareevidencedasaround40%ofrespondentsreportfewer
productrecallsandwithdrawals,sinceachievingBRCGScertication.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
BETTER
ORGANISATIONAL
OF PRODUCTION
AGREE
NEUTRAL
DISAGREE
INVESTMENT IN NEW
TECHNOLOGY
INCREASE IN
PRODUCT
INNOVATION

20
© Frenz Lambert 2021
Figure9:Operations:training,productqualityandrecalls(Source:owncalculations)
6.3 IMPACT ON BUSINESS PERFORMANCE
6.3.1 COMPETITIVENESS
WehaveseenthatenhancingtheircompetitiveedgewasanimportantobjectiveformanyFBOs.Thissectionreportson
theextenttowhichsurveyrespondentsconsiderthattheyhaveachievedimprovementsincompetitivenessinvarious
marketsandhowthesehavebeentranslatedintogrowthandprotability.
Over50%ofrespondentsreportanimprovementincompetitivenessintheirhomemarket,while60%reportimproved
competitivenessinexportmarkets.Takentogether,over70%hadincreasedcompetitivenessinoneorbothofhomeand
exportmarkets.
Thereisevidencefromthesurveythatcerticationopensmarketopportunitiesasitprovidesaclearandobjective
indicatorofsafetyinproductionandinproductquality.Similarsharesofrespondentstothosereportingcompetitiveness
gainsfoundthattheyhadaccesstolargermarketsbothathomeandinoverseasmarkets.Again,lowsharesof
respondentswerecertainthattherehadnotbeengainsincompetitiveness.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
TRAINING
AGREE
NEUTRAL
DISAGREE
PRODUCT QUALITY FEWER RECALLS
Over 70% of
respondents had increased
competitiveness in one or both of
home and export markets.

21 © Frenz Lambert 2021
Figure10:Competitiveness(Source:owncalculations)
6.3.2 GROWTH IN SALES IN HOME MARKETS AND ABROAD
Somestrikingcommercialresultsowedfromthegainsineciency,operationalimprovementsandcompetitiveness
associatedwithcertication.Theresultswereparticularlyextensiveingainingnewcustomersandinexportmarkets,with
certicationprovidingassurancetopotentialcustomersthatFBOscansupplysafeandhigh-qualityfoods.
Growthinsalestotheirestablishedcustomerbasewasexperiencedbynearly40%ofrespondents,whileexpansion
ofsalesvolumestonewlygainedcustomerswasreportedby55%.Certicationoerscurrentandespeciallypotential
customersahigherprobabilityofpurchasingsafeandhigher-qualityproductsandhelpsFBOstopenetratenewmarkets.
Similarly,around55%ofrespondentsagreethattheyhaveincreasedsalesinthehomeorexportmarketsorboth.
Somewhatunexpectedly,animpressiveshareofrespondentswereabletoproviderangequanticationofsalesgrowth.
Therangesinthequestionwereincreasesinsalesof:
• 0-5%
• 5-10%
• Over10%
Itispossibletosummarisethisdataintoasinglegureontheworkingassumptionsthattherangescanberepresented
bytheirmidpoints.Fortheupperrangeofover10%theassumptionusedhereisthatthiscanbecappedat20%,witha
mid-pointof15%followingthelogicthatthetopofeachrangeisdoublethebottom.
• 0-5%=2.5%
• 5-10%=7.5%
• Over10%=15%
Ontheseassumptions,theweightedmeanincreaseinsalesforthose(43%ofrespondents)givingapositiveresponse
was 7.5%.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
INCREASED
COMPETITIVENESS IN
HOME MARKET
AGREE
NEUTRAL
DISAGREE
INCREASED
COMPETITIVENESS IN
EXPORT MARKET
ACCESS TO LARGER
HOME MARKET
ACCESS TO LARGER
EXPORT MARKET

22
© Frenz Lambert 2021
6.3.3 INTERNATIONAL TRADE
Someoftheresearchcitedintheliteraturereviewhasfoundasignicantassociationbetweentheshareoffood
businessesholdingcerticatesfromoneoftheCPOsandthevolumeofinternationaltradebetweenthenations
concerned.Consistentlywiththeseresults,thepresentstudyhasfoundthatover45%ofrespondentshaveseensales
growthinexportmarkets,reectingthegainsininternationalcompetitivenessnotedabove.Ingeneral,thestimulus
togrowthofcerticationtotheBRCGSstandardislargerforexportsthanfordomesticsales,althoughthelatterare
substantial.
Figure11:Growthinhomemarketsandabroad(Source:owncalculations)
6.3.4 OTHER COMMERCIAL EFFECTS
ThesurveyreportedonarangeofothercommercialimpactsfromBRCGScertication,namelycosts,protabilityand
number of audits.
Onlyasmallproportion–lessthan17%-attributeoperatingcostreductionstocertication,whereasover50%disagree
withthisproposition.Thereismuchmoreofatendencytoincurcoststomeettherequirementsofthestandard,although
someoftheoutlaysseemlikelytogiverisetootherbusinessbenets,suchasenhancedphysicalandhumancapital.
Justunder30%ofrespondentsagreewiththeideaofincreasedprotability,butitisperhapsstrikingthatsucha
substantialsharecanidentifyprotabilitygains.
Interestingly,nearlyhalfofrespondentsndthatcerticationisassociatedwithfewerauditsbytheircustomers–one
oftheleadingrationalesforthedevelopmentofthird-partyfoodsafetystandards.Andtheinterviewswithbrand
representativessuggeststhat,withtheavailabilityofthird-partystandards,suchasthoseoftheBRCGS,theirown
auditingismoreconcernedwiththeunderlyingcapabilitiesofsuppliersandthebrands’specicrequirementsand
representaddedknowledgeforthem,andnotmainlyundertakenasdoublecheckingonthethird-partyaudits.
BRCGS certication has been associated with a
wide range of changes in business processes and
investments.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
EXISTING
CUSTOMERS
AGREE
NEUTRAL
DISAGREE
NEW CUSTOMERS HOME MARKET EXPORT MARKETS

23 © Frenz Lambert 2021
Figure12:Othercommercialeects(Source:owncalculations)
6.3.5 PROFITABILITY
OursurveyhasdiscoveredthatacquiringandmaintainingBRCGScerticationhasbeenassociatedwithawiderange
ofchangesinbusinessprocessesandinvestmentsinthedevelopmentofresources.Inturn,largeproportionsofFBOs
haveachievedimprovementsinbusinessperformance,includingoutputgrowth,especiallyexports.Comparedwiththe
limitedevidenceonnancialimpactsofcerticationfoundinpreviousresearch,ourdatashowedthataroundonethirdof
respondentswereabletoreportenhancedprotabilityandwerealsoabletoprovidesomequanticationofthis.
Althoughinresponsetothequalitativequestionaround27%ofrespondentsagreethatBRCGScerticationisassociated
withanincreaseinprotability,butrespondingtothequestionaboutquantifyingprotabilityincrease,over34%of
respondentsagreethattheyhaveincreasedprotabilityinarangefrom0toover10%.
Somewhatunexpectedly,animpressiveshareofrespondentswereabletoproviderangequanticationofprotability
growth.Therangesinthequestionwereincreasesinprotabilityof:
• 0-5%
• 5-10%
• Over10%
Itispossibletosummarisethisdataintoasinglegureontheworkingassumptionsthattherangescanberepresented
bytheirmidpoints.Fortheupperrangeofover10%theassumptionusedhereisthatthiscanbecappedat20%,witha
mid-pointof15%followingthelogicthatthetopofeachrangeisdoublethebottom.
• 0-5%=2.5%
• 5-10%=7.5%
• Over10%=15%
Ontheseassumptions,theweightedmeanincreaseinprotabilityforthose(34%ofrespondents)givingapositive
response was 6%.
Closeranalysisindicatesahighcorrelationbetweenthequantiedincreasesinsalesandinprotability,whichimplies
thatsalesgrowthataroughlyconstantmarginwasthemaindeterminantofhigherprotability.Thisisconsistentwith
thesurveydatashowingthatonly17%ofrespondentsagreedthattheyhadachievedcostsavingsasaresultof
implementingthirdpartyfoodstandards.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
REDUCTION IN COSTS
AGREE
NEUTRAL
DISAGREE
INCREASED
PROFITABILITY
FEWER AUDITS BY
CUSTOMERS

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© Frenz Lambert 2021
6.3.6 CERTIFICATION TO OTHER STANDARDS
ThestandardsoeredbyBRCGSarebenchmarkedagainstseveralothersbytheGFSI.Aswellasthisgroup,foodsafety
standardscanbesetbyindividualbrands,toensurethatsuppliersmeettheirveryspecicrequirements.Anothersource
istheISO22000standardpublishedbytheInternationalStandardsOrganisation.ThisisoutsidetheGFSIgroupasit
doesnotitselfentailtheuseofpre-requisiteprogrammesbyfoodcompanies.Butitisanoptionalrouteforthem,onits
ownoralongsideGFSIstandards.
InordertotrytoplacetheBRCGSstandardsinthewiderfoodstandardscontext,thesurveyforthisprojectaskedafew
questionsabouttheimpactonfoodcompaniesoftheircerticationtootherstandards,inadditiontothoseofBRCGS.
Inpractice,thevastmajorityofrespondentsarecertiedtomultiplestandards,with425of450questionnairereturns
providinginformationabouttheimpactontheirbusinessofotherstandards.Theextentofmultiplecerticationsislikelyto
bearesultoftheneedforfoodcompanies,eventheverysmall,todiversifytheircustomerbaseandminimisetheriskthat
losingonecustomerjeopardisesthebusiness.Brandshavecorrespondingimperativestodiversifysuppliers,tominimise
therisksofdependenceonafew.Thequestionnairedidnotrequestinformationonwhichstandards,anditislikelythat
theresponsesrepresentamixofotherGFSIandperhapsnon-GFSIstandards.
Themainndingsareshowningure13.
Figure13:TheimpactonbusinessperformanceofBRCGScerticationcomparedtoothercerticationstandards
• Around35%ofrespondentswithcerticatestostandardsinadditiontoBRCGSreportedanincreaseinsalesto 
 existingcustomersfollowingfromcertication.Thisresultissimilarto,butsomewhatlowerthan,forBRCGS 
 certication.
• 55%ofrespondentsexperiencedincreasedsaleshavinggainedcerticationtoBRCGS.Only44%ofrespondentswith
 othercerticationstandardsreportedincreasedsales.
• 26%ofrespondentsagreedthatsalesintheirhomemarkethadincreased,comparedto30%ofBRCGS
 certicatedrespondents.
• 46%ofrespondentswithBRCGScerticationreportedincreasedsalesinexportmarkets,comparedwithalowergure
 of42%forothercerticationstandards.
0
FEWER CUSTOMER AUDITS
FOLLOWING CERTIFICATION
INCREASE IN PROFITABILITY
FOLLOWING CERTIFICATION
SALES INCREASE IN EXPORT MARKETS
FOLLOWING CERTIFICATION
SALES INCREASE IN DOMESTIC MARKET
FOLLOWING CERTIFICATION
SALES TO NEW CUSTOMERS
FOLLOWING CERTIFICATION
SALES TO EXISTING CUSTOMERS
FOLLOWING CERTIFICATION
5040302010
Percentage of respondents (%)
60
BRCGS
OTHER

25 © Frenz Lambert 2021
• SimilarlytoBRCGScertiedrms,around29%ofrespondentsagreedthatprotabilityhadincreased.
• Over40%ofrespondentsagreedthattherearefewercustomerauditsaftercerticationtoanotherthird-partystandard.
 Thiscompareswith48%withBRCGScertication.
TheresultsshowthatbusinesseswithBRGCScerticationexperienceamodestextentofgreaterpositiveimpacton
performance,acrossmostofthecommonindicators.Itisperhapsnotsurprisingthatthereisbroadsimilarityofimpacts,
sincethemajorityoffoodsafetystandardsarebenchmarkedbytheGFSIinordertoensuresimilarqualityandreliability.
Andourdatacomesfrombusinesseswhoaremultiplecertiedandregularlyauditedagainstseveralstandards,solarge-
scaledivergencesintheimpactsofthevariousstandardsseemunlikely.
6.4 RESPONSES BY SUB-GROUP
Thissectionshowstheresultsofcomparingthepatternofresponsestothequestionsonbusinessbehaviourbetween
themembersofsamplesub-groups.Thesub-groupsare:FBOsbygeographicallocation(region);FBOsbysizeof
business(employment);andFBOsgroupedaccordingtothelengthoftimethebusinesshasbeencertiedtoaBRCGS
standard.Weidentiedthosesub-groupvariationsthatarestatisticallysignicant,wherethetestofsignicanceisthe
probabilitythatthereisnorelationship,generatedbythechisquaretest,usinga5%threshold.Atableoftheindicators
exhibitingsignicantvariationbysub-groupsisinAnnex1.Belowwesummarisethemainndings.
6.4.1 REGION
Responsestothesurveyexhibitsomestrongpatternsbygeographicallocation.Outof48indicators,30showsignicant
dierencesbetweentheregions,withthemajorityofthesedrivenbyhigherthanexpectedsharesof“agreement”
responsesintheMiddleEastorAsiaPacic.
6.4.2 SIZE
Wefoundthat6indicatorsshowedsignicantvariationbysizeofbusiness,mostlyasaresultofahigherthanexpected
shareofsmallrmsinagreementwiththestatementsinthesurvey.
6.4.3 LENGTH OF CERTIFICATION
Only5indicatorsshowedsignicantdierencesbylengthofcertication,thesevariationsweremainlydrivenbyahigher
thanexpectedshareofthosecerticatedfor1-5yearsinagreementwiththestatementsoered.
6.5 RESPONDENT COMMENTS
Thesurveyquestionnaireprovidedanumberofopportunitiesforrespondentstoaddtheirownthoughtsandcomments
onindividualquestionsandontheaimsofthesurveyoverall.
Insummary,thesewereslightelaborationsonthebasicquestionnaireresponsesanddidnotprovidemajoradditional
insightsintotheattitudesofrespondents.
Overalltherewere112Comments(72inEnglish).Thesewerespreadacrossthequestions,withthemajorityinthe
generalcommentssectionattheendofthesurvey.OfthoseinEnglish,asubjectiveinterpretationandsummaryofthe
balanceofthecommentsisasfollows.
• 24werepositive,inthesensethattheymadespecicremarkspointingtoimprovementsinthebusinessasaresultof
 adoptingtheBRCGSstandard.
• 20werenegative,inthesenseofspecicallycriticalontheBRCGSstandards,mainlythedirectcostsofcertication,
 saidtobehigherthanalternatives.
• 21wereneutral,inthesensetheymadegeneralremarksaboutfoodsafetyandcertication,withoutavaluejudgement
 onBRCGS.
• 7concernedCustomerAudits,withcomplaintsthatholdingtheBRCGSstandarddidnotpreventcustomersfrom
 carryingouttheirownaudits.Overall,aroundhalfofrespondentsindicatedthatBRCGScerticationhadledtofewer
 customeraudits.Thisissuewasalsohighlightedinpreviousresearch.

26
© Frenz Lambert 2021
6.6 STORY LINES AND A TYPOLOGY OF CERTIFICATION USE
SomeearlierresearchbasedonsurveysofusersofsafetystandardshasdevelopedsometypologiesbasedonFBOs’
motivationsforcerticationandontheimportancetheyhaveattachedtothereportedusestheymakeandtheimpactson
themofbeingcertied(e.g.MensahandJulien,2011,Spadonietal.2013).Inthissection,wereportonsimilarexercises
inmodellingthepatternsofapproachestoobtainingandapplyingcerticationtoBRCGSstandards.Inthiswehavethe
advantageofaratherlargersurveydatasetthanthoseavailabletoearlierresearchers.
ThesurveyofBRCGScustomershasgeneratedalargeamountofdataforaround450businesses.Thisdataenablesthe
calculationofindicatorsofhowgroupsofthesebusinessesapproachqualifyingfortheBRCGSstandardsandusingtheir
certicationtoincreasetheircompetitivenessininternationalmarketsanddevelopingandimprovingtheirproducts.Inthis
sectionwereportontheresultsofapplyingsomewell-establishedstatisticaltechniques,knownasfactorandclusteranalysis,
toderiveasmallsetofindicatorsthatsummarisethelargeamountofdatafromthesurvey.Wecanthinkoftheseasthe“story
lines”thatexplain,insuccinctterms,howthesurveyrespondentscombinethevariousaspectsoftheiradaptationtoand
applicationoftherequirementsoftheBRCGSstandards.Theseindicatorscan,inturn,beusedasexplanatoryvariablesin
regressionequationsthatpredictthequantitativeindicatorsofrateofgrowthinsalesandrateofincreaseinprotability.
Therststageintheanalysisistoestimateasetof“factors”thatreducethewiderangeofvariablesfromthesurveytoa
fewthatrepresenttheunderlyingdatabutaremoreapproachableandabletobeinterpretedasstrategiclevelbusiness
practicesthatintegratethevarietyofmorespecicactivitiescoveredinthesurvey.
Throughtheapplicationofthistechnique,wehaveidentied5factorsorplausiblestorylinesabouttheimpactsof
certicationtoBRCGSstandards.Thesecanbeinterpretedasthemorefundamentaldimensionsoffoodrms’purposes
andoutcomesfromcertication.Thespecicquestionsinthesurveyscanthenbeunderstoodasthefacetsorbuilding
blocksofthesecoreconceptsoftheeectsofcerticationtoastandard.
6.6.1 FACTOR ANALYSIS
Toarriveatthetypologyofcertication–thestoryline–weuse39surveyinstruments(questions)coveringthefollowing
broadareas:(i)agreementwiththeimportanceofasetofobjectivesforcerticationconsistingofsixindividualquestions;
(ii)agreementwithnancialcostsandotherchallenges(10questions),(iii)choiceofBRCGS(4questions);(iv)agreement
withasetofoperationaloutcomes(8questions);(v)agreementwithspecicmarketoutcomes(4questions);and(vi)
agreementwithasetofcommercialoutcomes(7questions).TheresultsarepresentedinAnnex2.Thesurveyresponses
canusefullybereducedintovefactors,typesofcerticationuseorFBOsstrategicorientations.
• Type 1 Product and process innovation.Thisfactorexplainsthelargestshareofvariationinthedataandpullstogether
 issuesaroundimprovingproductqualityandproductsafety,togetherwithinvestmentintrainingandnewtechnology.It
 alsoscoreshighlyonthechoiceforaBRCGSstandardandincreasedprotability.
• Type 2 Competitiveness led growth in the home market.Thisstrategicorientationsummarisesresponsesconnected
 withincreasedsalesinthehomemarketlinkedwithincreasedprotability.
• Type 3 Competitiveness led growth in export markets.Thisstrategicorientationpullstogetherapatternofresponses
 forexportmarketgrowthandcompetitiveness.
• Type 4 Costs of certication and investment.Drawstogetherresponsepatternsaroundthepossiblecostsofattaining
 andutilisingcertication.
• Type 5 Customer requirement for certication.Bringstogetherallquestionsrelatedtothepullforcerticationvia 
 customerrequirements.Thistypealsodrawsincostsaspectsofthecerticationprocess.
Type1,whichwetermed“productandprocessinnovation”,hasconsiderablesimilaritytosomeoftheconceptsusedin
measurementofbroadinnovation–includingmanagerialchange–forpublicpolicypurposes.Innovationmeasuredinthis
wayhasbeenshowntobesignicantlystimulatedbytheavailabilityoftechnicalandmanagerialstandards.(Forashort
summaryoftheliteratureseeSwann,G.andLambert,R.(2017).Asfarasweknow,thereisnopreviousresearchon
howfarprivatefoodsafetystandardshavesuchimpacts.The well determined nding from this research project,
that BRCGS food safety standards, which do not in themselves include innovation as a purpose, also act as a
determinant of broad-based innovation is a particularly unexpected and impressive result.
Fromthefactorsa“score”canbederivedforeachsurveyrespondent,thatisaquantitativeindicatorofhowstrongly
theyfavourthatfactor.Thesefactorscoresareusedintwofurthermodellingexercises-regressionequationsandcluster
analysis.

27 © Frenz Lambert 2021
6.6.2 REGRESSION
Regressionequationsareestimatedinordertoshowwhichofthe5indicators–factorsandstrategicorientations–are
importantindeterminingtheimpressiveratesofgrowthinsalesandinprotabilityreportedinSection6.3.
AbasicOLSregressionandanorderedlogitregressionrevealthatTypes1,2,3and5aresignicantinexplaining
thequantumofgrowthinsales;whileTypes1,2and3arealsosignicantinexplainingthequantumofincreasesin
protability.
6.6.3 CLUSTERS
Wethenuseclusteranalysis–atechniquethatgroupstheFBOsbytheirsimilaritiesanddierencesacrossthevetypes
ofcerticationuse–bytheirstrategicorientationtowardscertication.Table4liststheveresultinggroupsofFBOs
(clusters)andtheircharacteristics–highorloworientation-withregardstothevetypesofcerticationuse:productand
processinnovation;competitivenessledgrowthinthehomemarket;competitivenessledgrowthinexportmarkets;costs
ofcerticationandinvestment;andcustomerrequirementforcertication.
Table4GroupingsofFBOsbytypeofcerticationuse(strategicorientation)
Source:owncalculations.HierarchicalclusteranalysisusingWardlinkages.5clustersolutionwasselectedfollowinginspectionoftheDendrogram
(clustertree).N=425.Thevariablesfeedingintotheclusteranalysisarethesavedstandardizedfactorscores.Therefore,anegativevalueisindicative
ofascorebelowtheaverageonatypeandapositivevalueofascoreaboveaverage.Scoresgreaterthan+/-1deviatealotfromtheaverage.Put
dierently,68%percentofallobservationsfallwithintheintervalof[-1;1].
Thecharacteristics–intermsoftheirstrategicorientationtowardscertication–ofeachgroupofFBOs–Groups1to5–
areintherowsofTable4.
Group 1–Exportorientedinnovatorsisthesecondlargestclustercontaining114FBOsandcharacterisedbyanabove
averageagreementwiththeoutcomeofimprovedproductquality,safetyandinnovationandalowagreementwithhaving
experiencedcostorotherchallengesandlowagreementontherequirementofcerticationbycustomers.
Group 2–Requirementdrivenisthesmallestclusterofjustunder30sites.Thesecompaniesagreethattheirmain
objectiveforcerticationiscustomerrequirement.Thisclusterisalsoexperiencingnogrowthinthehomemarket.
Group 3–Exportorientedmodernisersisthelargestcluster(199sites).TheseFBOsagreedwiththeincurredcostsand
otherchallenges.Thereissomeindicationofagreementwithgrowthinhomeandexportmarkets.So,theyareveryaware
ofcostsofimplementationbutalsothatadaptingtheirresourcesandbusinesspracticesisassociatedwithenhanced
marketopportunities.
Group 4–Homemarketorientedinnovatorsisasmallgroupofbusinesses(40)whichshowhighagreementonthevalue
ofcerticationinproductquality,safetyandinnovationandwhoatthesametimeshowverylowinternationalorientation.
Butasscoringhighlyonproductqualityandinnovationtheyarelikelytoachieveenhancedprotability. 
Group 5–Passiverespondersisalsoasmallclusterofsites(45)thatdonotagreethatcerticationledtoanimprovement
GROUPS OF FBOS
1. Export oriented
innovators
2.Requirementdriven
3. Export oriented
modernisers
4.Homemarketoriented
innovators
5.PassiveResponders
NO. OF
FBOS
CUSTOMER
REQUIREMENT OF
CERTIFICATION
COSTS OF
CERTIFICATION
AND
INVESTMENT
COMPETITIVENESS
LED GROWTH IN
EXPORT MARKETS
COMPETITIVENESS
LED GROWTH IN
THE HOME
MARKET
PRODUCT
AND PROCESS
INNOVATION
114
27
199
40
45
0.4
0.3
0.0
0.8
-1.9
0.1
-1.8
0.2
-0.3
0.1
0.3
0.2
0.3
-2.0
-0.5
-0.6
-0.9
0.6
0.3
-0.6
-0.8
0.9
0.2
-0.1
0.7

28
© Frenz Lambert 2021
inproductqualityandsafetyorinvestments.Thesesitestendtobecertiedbecauseofkeycustomers’requirements.
Theydierfromgroup2innotperceivingexportmarketbenetsfromcerticationandinalowscoreoninnovation.
InthefollowingwecomparethecharacteristicsofthevegroupsofFBOsintermsofsize,location,timesincecertied,
theirproductsandtypeofcerticatesheld.
Table5GroupsofFBOsbysize
Source:owncalculation.Cellcontentpercentages.N=424
Groups4and5,bothfocussedontheirhomemarkets,containalargeproportionofsmallenterprises.Whilegroups1
and2containalargershareoflargeenterpriseswith500andmoreemployees.
ThereisnosignicantdierenceacrossthegroupswithreferencetothetimesinceFBOswererstcertied.Notableis
presented.
Table6GroupsofFBOsbylocation
Source:owncalculation.Cellcontentpercentages.N=424.
Group5,asmallergroupof45FBOs,containsproportionallyalargershareofUKbasedFBOs.Group5isalsomost
criticalintermsofthebenetsofcerticationonproductquality,safety,andinnovation.Groups1and2haveahigher
proportionofFBOslocatedintheMiddleEasternandAsiaPacicregions.(Aswithsizegroup3isdistributedinasimilar
patterntoallresponses).
ThereisnosignicantpatternacrosstheproducttypesofFBOs.Thereis,however,adierenceacrossgroupswith
respecttothecerticatetypeheld.
GROUPS OF FBOS
1. Export oriented innovators
2.Requirementdriven
3. Export oriented modernisers
4.Homemarketorientedinnovators
5. Passive responders
Total
MORE THAN
1,500
501-1,50051-5001-50
EMPLOYEES
25
22
33
45
47
33
58
56
61
55
44
57
13
11
5
0
7
7
4
11
2
0
2
3
GROUPS OF FBOS
1. Export oriented innovators
2.Requirementdriven
3. Export oriented modernisers
4.Homemarketorientedinnovators
5. Passive responders
Total
NORTH
AMERICA
EUROPEUK
2
4
14
18
51
14
35
37
40
35
27
37
8
7
8
28
9
10
7
4
10
3
0
7
SOUTH
AMERICA
MIDDLE
EAST
ASIA
PACIFIC
15
19
11
3
4
11
33
30
18
15
9
21

29 © Frenz Lambert 2021
Table7GroupsofFBOsbycerticatetype
Source:owncalculation.Cellcontentpercentages.N=425.
Group2containsrelativemoreFBOscertiedforfoodprocessing.Itisthesmallestgroupwithonly27FBOs.Group5,
containing45FBOs,hasrelativelymoreFBOscertiedforstorageanddistribution,andagentsandbrokersandfewer
businesseswithfoodprocessingcerticates.
Table8FBOgroupsandchangeinsalesandprots
Source:owncalculation.Cellcontentpercentages.N=309.Columns2and3arepercentagesofFBOsreportinggrowthinsalesandprots.
Inthesurvey59percentagreedthattheirsalesgrewowingtocerticationand48percentagreedthatprotsgrewowing
tocertication.
Inparticulargroups1and3–theexport-orientedinnovatorsandmodernisers–reportedaboveaveragesalesandprot
growths.ThesetwogroupsofFBOscontainbyfarthelargestnumberofbusinesses(313outof425businesses).
GROUPS OF FBOS
1. Export oriented innovators
2.Requirementdriven
3. Export oriented modernisers
4.Homemarketorientedinnovators
5. Passive responders
Total
FOOD
PROCESSING
51
74
60
53
22
54
27
15
28
20
16
25
8
7
7
15
29
10
4
0
3
8
29
6
6
0
2
3
2
3
4
4
1
3
2
2
PACKAGING STORAGE AND
DISTRIBUTION
AGENTS AND
BROKERS
CONSUMER
PRODUCTS
OTHER
GROUPS OF FBOS
1. Export oriented innovators
2.Requirementdriven
3. Export oriented modernisers
4.Homemarketorientedinnovators
5. Passive responders
Total
60
54
68
35
35
59
59
50
52
27
14
48
SALES GROWTH GROWTH IN PROFITS

30
© Frenz Lambert 2021
7 CONCLUSIONS
Thisreporthasbuiltontheevidenceandinsightsfrompreviousresearch,whichmostlyfocussedonthemotivationsfor
foodsupplierstobecomecertied,andontheinternationaltradeeectsofthedisseminationofthird-partycertications.
However,thisstudyhasaddedmateriallytotheevidencebase,particularlyonFBOperformanceeects.
Throughdiscussionswithrepresentativesof“brands”-theproximatedemandsideoffoodmarkets-andthroughan
extensivesurveyofcerticatedusersoftheBRCGSstandards,wehavebeenabletoevidencetheFBOperformance
eectsofimplementingBRCGScertication.Thesehadbeensuspectedbuthavenowbeendemonstratedand
quantied.
Thisstudyhasdemonstratedthewidespreadeectsandreachonmultipleaspectsoftheirbusinessoperationsand
performancewithnearlyallFBOrespondentshavingatleastonepositiveimpactfromBRCGScertication.
Althoughoftenaninitialresponsetoarequirementofexistingcustomers,theattainmentofBRCGScerticationopensup
marketopportunities,especiallyinexportmarketsandwithnewcustomers.
ThestudyhasshownthatBRCGScertication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certicationalsodeliverspositive“bottomline”eectsformanyFBOs,whichwerepreviouslyun-observed.These
canbecalculatedasanaverageof7.5%salesgrowthand6%protabilitygrowthforthe30to40%ofrespondents
reportingthesequanta.
ThestudyshowsthatBRCGSstandardshavesimilarpositiveimpactstoISOtechnicalandmanagementstandards,
inrelationtoenablingproductandprocessinnovation,andthusgrowthinoutputandproductivity.However,BRCGS
certication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).
ThestudyidentiedhowBRCGScerticationisplacedinthewiderfoodstandardscontext.Whiletherearebroad
similaritiesinimpact,FBOswithBRCGScerticationexperienceamarginallygreaterimpactonperformanceacrossmost
indicators.
This study has shown the
widespread eects of BRCGS
certication on multiple aspects
of business operations and
performance.

31 © Frenz Lambert 2021
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33 © Frenz Lambert 2021
ANNEX 1. BASIC STATISTICS
Thisannexpresentsthebasicdatafromthesitesurvey.Theformatissimpletabulationsofthenumber(frequency),
percentagebreakdownandcumulativepercentagesofresponseswithshortbulletnotesdrawingoutthemost
salientpoints.
Interestingndingsinclude:
Prole
• Responsescoverarangeofgeographiclocations.
• ButthenumberfromtheUKisrelativelylow.
• Theycoverarangeofproductsandstandards,includingnon-foods.
• Whilethemostfrequentreasonsforseekingcerticationwerethepreferencesofcurrentandpotentialcustomers, 
 improvingcompetitiveness,especiallyinexportmarkets,wasimportantforaround80%.
Costs
• Afairlymodestshareofaround50%agreedthatBRCGSandAuditorchargeswerehigh.
• TherehasbeenextensiveupgradingofphysicalequipmentandITwhile65%hadtrainedsta.Thecerticationprocess
 hasstimulatedmodernisationofbusinesses’physicalandhumancapital.
• Only30%reportedthatstawereresistanttochange-thiswasseenasamoremajorissueinsomeacademic 
 research.
• AnotherissueraisedinsomeearlierresearchwasofFBOsinsmallerorlessdevelopedcountriesfacinglocal 
 infrastructurelimitations,suchasaccesstoauditors.Butonly20%reportedsuchissuesinthissurvey.
• Over54%agreedthatpaperworkcostshadbeenincurred-againperhapslessthanexpected.
Why BRCGS
• ThemostfrequentlyreportedreasonforthechoiceofaBRCGSstandardwaslargercustomerrequirement.
• ButtheBRCGScoverageofthebusiness’soperationswasalsoimportantforover80%,whiletherewasalsoextensive
 satisfactionwiththequalityofauditing.
• Around50%agreedthatBRCGSprovidedthebestvalueformoney.
Operational Outcomes
• Morethan63%ofrespondentsreportedimprovementsinproductquality.
• VeryhighproportionsofFBOshadmodernisedorenhancedtheirrealandhumanassetswithover70%improvingthe
 organisationofproductionwhile80%hadinvestedinstatraining.
Market and commercial outcomes
• ImplementingBRCGSstandardsstimulatedcompetitivenesswithover50%ofrespondentsreportinganimprovement
 intheircompetitivenessintheirhomemarketand60%inexportmarkets.
• Alargeproportionofrmshadachievedsalesgrowth,especiallytonewcustomers–nearly55%–andin
 exportmarkets.

34
© Frenz Lambert 2021
RESPONDENT PROFILE
Language
Languages-Summary
• ThegreatmajoritycompletedthesurveyinEnglish.
• ButreasonablenumberstookadvantageoftheopportunitytocompleteinMandarin,SpanishorTurkish.
Location
Location-Summary
• TheresponseratefromtheUKisrelativelylow.
• ThelargestgrouparerespondentsfromEurope.
• Butotherregionsshowausefulnumberofresponses,notablyAsia-Pacic.
Size
Size-Summary
• Themajorityofrespondents(90%)areinthesmallormediumcategories.
• Ausefulsharearethoughlargeorverylarge.
USER LANGUAGE
332
59
26
34
451
74
13
6
8
100
FREQ. PERCENT CUM.
74
87
92
100
English
Spanish
Turkish
Mandarin
Total
WHERE ARE YOU LOCATED?
67
162
44
31
49
97
450
15
36
10
7
11
22
100
FREQ. PERCENT CUM.
15
51
61
68
78
100
UK
Europe
NorthAmerica
SouthAmerica
MiddleEastandAfrica
AsiaPaciccountries
Total
HOW MANY EMPLOYEES DOES YOUR SITE HAVE?
143
261
33
14
451
32
58
7
3
100
FREQ. PERCENT CUM.
32
90
97
100
Lessthan50
51-500
501-1,500
Morethan1,500
Total

35 © Frenz Lambert 2021
Years certied
YearsCertied-Summary
• ThereisgoodrepresentationofFBOswithshorterandlongerperiodscertiedtoBRCGSstandards.
• Some60%havebeencertiedforbetween1and10years.
Products certied
Productscertied-Summary
• Respondentscoverarangeofproducttypes,includingnon-foods.
Certications
Certications-Summary
• Thelargestgroupofcerticatesheldareforfood.
• Butpackagingandstoragearealsowellrepresented.
HOW LONG HAVE YOU BEEN CERTIFIED?
61
140
128
79
43
451
14
31
28
18
10
100
FREQ. PERCENT CUM.
14
45
73
90
100
Lessthan1year
1-5years
6-10years
11-15years
Morethan15years
Total
CERTIFIED PRODUCTS
34
76
12
92
92
144
450
8
17
3
20
20
32
100
FREQ. PERCENT CUM.
8
24
27
48
68
100
Bread
Fruit
Dairy
Meat
Non-food
Other
Total
CERTIFICATES HELD
242
110
47
29
15
9
452
54
24
10
6
3
2
100
FREQ. PERCENT CUM.
54
78
88
95
98
100
Food
Packaging
Storage
Agents
ConsumerProducts
Other
Total

36
© Frenz Lambert 2021
REASONS FOR CERTIFICATION
Current customers
Currentcustomers-Summary
• Currentcustomerrequirementisimportantinseekingcerticationfor95%ofrespondents
• Thevastmajorityoftheseregarditashighlyormostimportant
Potential customers
Potentialcustomers-Summary
• Similarlytoexistingcustomers,potentialcustomerrequirementforcerticationareadriverfor95%ofrespondents.
• Thisfactorisrankedslightlylowerinimportancethantheneedsofexistingcustomers.
Domestic competitiveness
CERTIFICATION IS REQUIRED BY CURRENT CUSTOMERS
7
5
13
45
207
174
451
2
1
3
10
46
39
100
FREQ. PERCENT CUM.
2
3
6
16
61
100
Notapplicable/don’tknow
No importance
Neitherimportantorunimportant
Some importance
Highlyimportant
Most important
Total
CERTIFICATION IS REQUIRED BY POTENTIAL CUSTOMERS
7
7
9
72
238
118
451
2
2
2
16
53
26
100
FREQ. PERCENT CUM.
2
3
5
21
74
100
Notapplicable/don’tknow
No importance
Neitherimportantorunimportant
Some importance
Highlyimportant
Most important
Total
INCREASE COMPETITIVENESS IN HOME MARKET
21
43
36
130
161
56
447
5
10
8
29
36
13
100
FREQ. PERCENT CUM.
5
14
22
51
87
100
Notapplicable/don’tknow
No importance
Neitherimportantorunimportant
Some importance
Highlyimportant
Most important
Total

37 © Frenz Lambert 2021
Domesticcompetitiveness-Summary
• CerticationisalsoimportanttoFBOsbecauseitcanbeusedtopromotetheiroeringtodomesticcustomersor 
 potentialcustomers.
• Nearly80%regardgainingdomesticcompetitivenessasimportant.
• Closeto50%regardasofhighormostimportance.
Export competitiveness
Exportcompetitiveness-Summary
• Aslightlyhigherproportion-83%,seecerticationasimportantforcompetinginexportmarkets.
• Similarly,ahighershare-over60%-nditofhighormostimportance.
Safe products
Safeproducts-Summary
• Over80%ofrespondentsregardsafeproductsasahighlyimportantreasonforcerticationtoastandard.
• Afurther11%seeitasofsomeimportance.
INCREASE COMPETITIVENESS IN EXPORT MARKETS
23
26
28
92
200
77
446
5
6
6
21
45
17
100
FREQ. PERCENT CUM.
5
11
17
38
83
100
Notapplicable/don’tknow
No importance
Neitherimportantorunimportant
Some importance
Highlyimportant
Most important
Total
NEED TO SUPPLY SAFE PRODUCTS
4
19
13
50
157
206
449
1
4
3
11
35
46
100
FREQ. PERCENT CUM.
1
5
8
19
54
100
Notapplicable/don’tknow
No importance
Neitherimportantorunimportant
Some importance
Highlyimportant
Most important
Total

38
© Frenz Lambert 2021
Competitor certied
Competitorcertied-Summary
• Nearly70%ofrespondentsseesomeneedtomatchcompetitorsuseofcertication
• And40%seeitashighlyormostimportant..
COSTS AND CHALLENGES
BRCGS Charges
BRCGSCharges-Summary
• Over50%ofrespondentndBRCGSchargestobeveryhigh.
• But11%disagree
• And36%areneutral
• Theoverallbalanceofresponsesisclosetoneutral-perhapssurprisingly.
COMPETITOR HAS CERTIFICATION
33
52
57
119
115
68
444
7
12
13
27
26
15
100
FREQ. PERCENT CUM.
1
5
8
19
54
100
Notapplicable/don’tknow
No importance
Neitherimportantorunimportant
Some importance
Highlyimportant
Most important
Total
BRCGS SPECIFIC CHARGES ARE VERY HIGH
13
9
30
166
179
54
451
3
2
7
37
40
12
100
FREQ. PERCENT CUM.
3
5
12
48
88
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

39 © Frenz Lambert 2021
Auditor charges
Auditorcharges
• AhigherproportionofrespondentsagreethatauditchargesarehighthanBRCGScharges.
• Butover40%disagreeorareneutral.
Training
Training-Summary
• Some65%ofrespondentshavespentontraining.
• Only15%disagreethattheyhavedoneso.
Recruitment
AUDIT CHARGES ARE VERY HIGH
8
10
31
136
205
61
451
2
2
7
30
45
14
100
FREQ. PERCENT CUM.
2
4
11
41
86
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
COSTS HAVE BEEN INCURRED FOR TRAINING OF STAFF
TO MEET CERTIFICATION REQUIREMENT
10
14
47
87
238
54
450
2
3
10
19
53
12
100
FREQ. PERCENT CUM.
2
5
16
35
88
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
COSTS HAVE BEEN INCURRED FOR RECRUITMENT OF
STAFF TO MEET CERTIFICATION REQUIREMENT
27
20
109
106
160
28
450
6
4.44
24.22
23.56
35.56
6.22
100
FREQ. PERCENT CUM.
6
10.44
34.67
58.22
93.78
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

40
© Frenz Lambert 2021
Recruitment-Summary
• Over40%ofrespondentshavespentmoneyonrecruitingstatomeettheneedsofcertication.
• But28%havenothadthatexperience,while24%areneutral.
• Recruitmentofnewstacangeneratebenetsthroughincreasedcapabilityandresponsivenesstocustomersand
 markets.
Employee resistance
Employeeresistance-Summary
• Thelargestgroupofrespondents-over44%-disagreethatemployeesareresistanttochange.
• Over20%areneutral.
• Some30%feelthatthereissuchresistance.
• Thebalanceofresponsessuggestthatthisisnotanextensiveproblem.
Modernisation of capital
Modernisationofcapital-Summary
• Around50%ofrespondentshaveincurredexpenditureonup-datingequipment.
• Only23%disagreethatthisactionwastaken
• While25%wereneutral.
• Modernisationcanbenetthebusinessthroughecienciesandcustomersthroughimprovedproductsandservices.
EMPLOYEES ARE RESISTANT TO CHANGE
20
51
148
99
109
23
450
4
11
33
22
24
5
100
FREQ. PERCENT CUM.
4
16
49
71
95
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
COSTS HAVE BEEN INCURRED FOR NEW OR UPGRADED
MACHINERY AND EQUIPMENT
38
18
89
80
181
42
448
8
4
20
18
40
9
100
FREQ. PERCENT CUM.
8
13
32
50
91
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

41 © Frenz Lambert 2021
Modernisation of IT
ModernisationofIT-Summary
• Over27%ofrespondentshadspentonmodernisingtheirIT.
• Butnearly40%hadnot.
• Aroundonethirdwereneutral.
• ThebalanceofresponsesindicatesthatupgradingproductionequipmentwasmorewidelyadoptedthanimprovingIT
provision.
Infrastructure
Infrastructure-Summary
• Only20%overallofrespondentsagreedthatcerticationfacedlocalinfrastructureproblems.
• Over50%didnotseesuchproblems.
• Some25%wereneutral.
• Thebalanceofresponsesdoesnotindicatewidespreadinfrastructureissues-althoughparticularlocationsmightshow
 ahigherincidence.
COSTS HAVE BEEN INCURRED FOR NEW/UPGRADED IT
42
33
140
106
111
12
444
9
7
32
24
25
3
100
FREQ. PERCENT CUM.
9
17
48
72
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
LOCAL INFRASTRUCTURE PROBLEMS SUCH AS
ACCESS TO AUDITORS
39
72
170
75
72
20
448
9
16
38
17
16
4
100
FREQ. PERCENT CUM.
9
25
63
79
96
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

42
© Frenz Lambert 2021
Product development
Productdevelopment-Summary
• Morerespondents-33%disagreedthatthesecostswereincurred.
• Some28%agreed.
• Over38%wereneutral.
Cost of bureaucracy
Costofbureaucracy-Summary
• Around54%agreedthatsuchcostswereincurred.
• Only24%disagreed.
COSTS HAVE BEEN INCURRED FOR CHANGES TO
PRODUCT DEVELOPMENT
61
24
124
113
111
15
448
14
5
28
25
25
3
100
FREQ. PERCENT CUM.
14
19
47
72
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
COSTS HAVE BEEN INCURRED DUE TO INCREASED
PAPERWORK AND DOCUMENTATION
8
29
78
93
188
50
446
2
7
17
21
42
11
100
FREQ. PERCENT CUM.
2
8
26
47
89
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

43 © Frenz Lambert 2021
WHY BRCGS?
Biggest customer
Biggestcustomer-Summary
• Around77%ofrespondentsagreethattheirbiggestcustomerrequiredBRCGScertication.
• Only6%hadsomedegreeofdisagreement.
• Thebalanceimpliesthatbrandsareoftenthedefacto“customer”forFoodSafetystandards.
Coverage
Coverage-Summary
• Over80%ofrespondentsagreethatthecoverageoftheiractivitiesbytheBRCGSstandardwasimportantintheir
 choiceofthatsourceofcertication.
• Veryfew(16%)disagreedorwereneutral.
REQUIRED BY BIGGEST EXISTING CUSTOMER
14
2
25
63
203
145
452
3
0
6
14
45
32
100
FREQ. PERCENT CUM.
3
4
9
23
68
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
GOOD COVERAGE OF OUR OPERATIONS
5
4
14
49
284
95
451
1
1
3
11
63
21
100
FREQ. PERCENT CUM.
1
2
5
16
79
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

44
© Frenz Lambert 2021
Auditors
Auditors-Summary
• 80%ofrespondentsagreedonthehighqualityofauditorsavailabletotestcerticationtotheBRCGSstandard.
• Under3%disagreed.
• TakentogetherwiththeirappreciationofthebreadthofcoverageoftheBRCGSstandard,thisimpliesahighlevelof
 satisfactionwiththeintegratedstandardsprovisionandcerticationsystemoeredbyBRCGS.
Value for money
Valueformoney-Summary
• LessthanhalfofrespondentsagreedthatBRCGSoeredthebestvalueformoney.
• Butonlyaround10%disagreed.
• Over45%wereneutral.
• SothereappearstobeasubstantialbutnotoverwhelmingsharewhoseegoodvalueformoneyfromBRCGS.
HIGH QUALITY OF AUDITORS
2
2
10
73
285
80
452
0
0
2
16
63
18
100
FREQ. PERCENT CUM.
0
1
3
19
82
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
BEST VALUE FOR MONEY
18
7
40
187
165
34
451
4
2
9
41
37
8
100
FREQ. PERCENT CUM.
4
6
14
56
92
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

45 © Frenz Lambert 2021
OUTCOMES
OPERATIONAL OUTCOMES
Food quality and safety
Whilethisisnotthemainfocusofthesurvey,theresponsesconrmthatfoodsafetyandqualityhasbeenvery
substantiallyenhancedbytheirBRCGScertication.
Product Recalls
Recalls-Summary
• Around40%ofrespondentsreportfoodsafetyimprovementsthroughexperiencingfewerproductrecallsand 
 withdrawals,sinceachievingBRCGScertication.
• Another40%wereneutralorlackedknowledgeontheissue
• Under20%reportednosucheects.
Quality
Quality-Summary
• Morethan63%ofrespondentsreportedimprovementsinproductquality
• Around11%weresureofnosuchimprovement
• Some25%wereneutral(notsureorperceivingnonchange).
WE HAVE EXPERIENCED FEWER PRODUCT
RECALLS/WITHDRAWALS
58
30
58
125
132
49
452
13
7
13
28
29
11
100
FREQ. PERCENT CUM.
13
19
32
60
89
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
OUR PRODUCT QUALITY HAS IMPROVED
16
10
42
97
228
63
456
4
2
9
21
50
14
100
FREQ. PERCENT CUM.
4
6
15
36
86
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

46
© Frenz Lambert 2021
Product safety
Safety-Summary
• Some80%ofrespondentsarecondentthatBRCGScerticationhasachievedisprimarypurposeofenablingsafer
food production.
• Only5%disagree.
• Around15%areneutralonthistopic.
Eciency and Investment
Surveyrespondentsextensivelyreporteciencygainsthroughorganisationofproduction,oftenwithinvestmentinnew
technology.Over80%haveinvestedinstatraining.Theseenhancementsofphysicalandhumancapitalbenetthe
suppliersandtheircustomers.Productinnovationisalsoreportedbysome30%,whichseemshigh,giventheimportance
ofcustomerspecicationsinthefoodsupplychain.
Organisation of production
Organisationofproduction-Summary
• Nearly70%ofrespondentsreportimprovementsintheirorganisationofproduction.
• Only10%denitelydidnotexperiencethiseect.
• Slightlymorethan20%werenotabletogiveanassessment.
OUR PRODUCT SAFETY HAS IMPROVED
6
5
20
59
255
110
455
1
1
4
13
56
24
100
FREQ. PERCENT CUM.
1
2
7
20
76
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
WE HAVE ACHIEVED BETTER ORGANISATION
OF PRODUCTION
29
11
36
68
256
53
453
6
2
8
15
57
12
100
FREQ. PERCENT CUM.
6
9
17
32
88
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

47 © Frenz Lambert 2021
Innovation
Innovation-Summary
• Asmallerproportionofrespondents-30%lessthanforotheroperationaloutcomesreportincreasesin
product innovation.
• Over20%areclearthatinnovationhasnotbeenincreasebycertication.
• Nearly50%cannottakeaviewonthematter.
New technology
Newtechnology-Summary
• Nearly50%ofrespondentsagreethattheyhaveundertakeninvestmentinnewtechnology,stimulatedbycertication
 totheBRCGSstandard.
• Overonethirdarenotabletosay.
• Around17%areclearthattheyhavenotsoinvested.
PRODUCT INNOVATION HAS INCREASED
51
19
73
174
111
24
452
11
4
16
39
25
5
100
FREQ. PERCENT CUM.
11
15
32
70
95
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
WE HAVE INVESTED IN NEW TECHNOLOGY
36
8
71
121
186
31
453
8
2
16
27
41
7
100
FREQ. PERCENT CUM.
8
10
25
52
93
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

48
© Frenz Lambert 2021
Training
Training-Summary
• Thevastmajority-85%ofrespondentshaveinvestedintrainingaspartoftheiradoptionofBRCGScertication.
• Around4%havenotdoneso.
• Some11%areunsure.
Integration with other standards
Integrationofstandards-Summary
• Around50%ofrespondentsagreethatthereisbetterintegrationwithothermanagementstandards.
• Some8%disagree.
• Another42%arenotsure.
WE HAVE INVESTED IN TRAINING
1
3
16
50
309
73
452
0
1
4
11
68
16
100
FREQ. PERCENT CUM.
0
1
4
15
84
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
THERE IS BETTER INTEGRATION WITH OTHER
MANAGEMENT STANDARDS (E.G. ISO 9001)
88
6
29
102
181
48
454
19
1
6
22
40
11
100
FREQ. PERCENT CUM.
19
21
27
50
89
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

49 © Frenz Lambert 2021
MARKET OUTCOMES
ForalargeproportionofBRCGScustomerswhorespondedtothesurvey,theoperationaldevelopments,aswellasan
enhancedmarketreputation,signalledbygainingcertication,haveledtoimprovedcompetitiveness,especiallyinexport
markets,whilecerticationstatushasopeneduplargermarketopportunities.Relativelysmallsharesofrespondentshave
disagreedwiththepropositionsonmarketoutcomes.
Competitiveness in home market
Competitiveness-Summary
• Over50%ofrespondentsreportanimprovementintheircompetitivenessintheirhomemarket.
• But16%donotagreethatcompetitivenesshasimproved.
• Aroundonethirdareneutral/undecided.
Competitiveness in export markets
Exportcompetitiveness-Summary
• Some60%ofrespondentshavegainedcompetitivenessinexportmarkets-ahighersharethaninhomemarkets.
• Only8%havenotfoundexportcompetitiveness.
• Again,aroundonethirdareneutralonthesubject.
WE HAVE INCREASED COMPETITIVENESS IN THE
HOME MARKET
36
20
55
114
189
40
454
8
4
12
25
42
9
100
FREQ. PERCENT CUM.
8
12
24
50
91
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
WE HAVE INCREASED COMPETITIVENESS IN
EXPORT MARKETS
41
8
30
101
207
68
455
9
2
7
22
45
15
100
FREQ. PERCENT CUM.
9
11
17
40
85
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

50
© Frenz Lambert 2021
Access to larger home market
Largerhomemarket-Summary
• Over50%ofrespondentndthattheyhaveaccesstoalargerhomemarketasaresultsofBRCGScertication
• Some15%havenotfoundthis.
• Theremaining35%areunsightedonthetopic.
Access to larger export market
Largerexportmarket-Summary
• Again,accesstolargerexportmarketsarereportedbymorerespondents-some65%,thanforhomemarkets.
• Justover5%havenotfoundlargerexportmarkets.
• Around30%areneutralonthesubject.
THERE IS ACCESS TO LARGER HOME MARKET
36
16
52
122
192
37
455
8
4
11
27
42
8
100
FREQ. PERCENT CUM.
8
11
23
50
92
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
THERE IS ACCESS TO LARGER EXPORT MARKET
40
4
22
93
220
75
454
9
1
5
20
48
17
100
FREQ. PERCENT CUM.
9
10
15
35
83
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

51 © Frenz Lambert 2021
COMMERCIAL OUTCOMES
SALES EFFECTS
BRCGScerticationisassociatedwithhighersalestoexistingcustomersfornearly40%ofrespondents.However,ithas
helpedtogainbusinesswithnewcustomersfor55%ofrespondents,conrmingtheecacyofcerticationinimproving
competitiveness.Thesharewhohavegainedsalesinexportmarketsissomewhathigherthaninhomemarkets,which
suggeststhatcerticationraisestheinternationalproleofBRCGScustomers.
Sales to existing customers
Increasedsales-Summary
• Over38%ofrespondentsagreethattheyhaveachievedincreasesintheirsalestotheirexistingcustomers,following
 certicationbyBRCGS.
• Morethan20%donotthinkthattheyhaveachievedhighersales.
• Around40%areneutral.
Sales - new customers
Increasedsalestonewcustomers-Summary
• Ahighershareofrespondents-nearly55%-reportincreasedsalestonewasopposedtoexistingcustomers.
• Only13%areclearthattherehasnotbeenanincrease.
• Again,onethirdareneutralonthequestion.
INCREASED SALES VOLUMES - EXISTING CUSTOMERS
34
19
72
150
151
20
446
8
4
16
34
34
4
100
FREQ. PERCENT CUM.
8
12
28
62
96
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
INCREASED SALES VOLUMES - NEW CUSTOMERS
32
10
49
110
215
29
445
7
2
11
25
48
7
100
FREQ. PERCENT CUM.
7
9
20
45
93
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

52
© Frenz Lambert 2021
Sales - home market
Increasedsalesinhomemarket-Summary
• Around30%ofrespondentsagreethattheyhaveincreasedsalesinthehomemarket.
• Butover22%havenotfoundthis.
• Some46%havenovieworinformationonthequestion.
Sales - export markets
Increasedsalesinexportmarkets-Summary
• Over45%ofrespondentsagreethattheyhaveseenincreasedsalesinexportmarkets,comparedto30%in
 homemarkets.
• Around13%donotagreethatexportsaleshaveincreased.
• 40%ofrespondentsremainneutralonchangesinthevolumeofexportsales.
Other commercial eects
Onlyasmallproportionattributeoperatingcostreductionstocertication,whereas50%denitelydisagreewiththe
proposition.Under30%ofrespondentsagreewiththeideaofincreasedprotability,whileaverysimilarproportion
disagree.Nearlyhalfofrespondentsndthatcerticationisassociatedwithfewerauditsbytheircustomers-oneofthe
leadingrationalesforthedevelopmentofthirdpartyfoodsafetystandards.Howevernearly30%disagree.
Quantication of commercial impacts
Over40%ofrespondentswereabletoestimatethepercentagechangeinsalesarisingfromoperatingwithBRCGS
certication.Only5%indicatedapercentageforreductionsinsales.Onprotability,35%quantiedanincreasewhile6%
quantiedsomedecline.
INCREASED SALES VOLUMES - HOME MARKETS
47
20
81
161
119
15
443
11
5
18
36
27
3
100
FREQ. PERCENT CUM.
11
15
33
70
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
INCREASED SALES VOLUMES -EXPORT MARKETS
57
9
50
125
169
36
446
13
2
11
28
38
8
100
FREQ. PERCENT CUM.
13
15
26
54
92
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

53 © Frenz Lambert 2021
Cost reduction
Reductionincosts-Summary
• Only16%ofrespondentsassociateBRCGScerticationwithloweroperatingcosts.
• Nearly48%aresurethatthereisnoreduction.
• Around35%areneutralonthisquestion.
Protability
Increaseinprotability-Summary
• Around27%ofrespondentsagreethatBRCGScerticationisassociatedwithanincreaseinprotability.
• Againaround27%donotagreethatprotabilityisincreased.
• Some42%areneutral.
REDUCTION IN OPERATING COSTS
25
48
167
130
66
8
444
6
11
38
29
15
2
100
FREQ. PERCENT CUM.
6
16
54
83
98
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
INCREASE IN PROFITABILITY
32
27
97
167
107
14
444
7
6
22
38
24
3
100
FREQ. PERCENT CUM.
7
13
35
73
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

54
© Frenz Lambert 2021
Fewer audits
Fewercustomeraudits-Summary
• Nearly48%ofrespondentsagreethattheexperiencefewerauditsbytheircustomers.
• But28%donotagreethatthisisthecase.
• Around23%areneutral.
Quantied sales growth
Percentchangeinsales-Summary
• Around43%ofrespondentsagreetheyhaveincreasedsalesintherange0toover10%.Thisisconsistentwiththe
 sharesreportingsomedegreeofincreaseinsalesinanearlierquestion.
• Some5%agreethattheyhaveexperiencedadeclineinsalesintherange0toover10%.
• Over25%reportnochangeandafurther25%areunabletoestimate.
A LOWER NUMBER OF CUSTOMER AUDITS
18
45
82
87
158
55
445
4
10
18
20
36
12
100
FREQ. PERCENT CUM.
4
14
33
52
88
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
QUANTIFIED SALES INCREASE
7
4
11
113
82
65
51
117
450
2
1
2
25
18
14
11
26
100
FREQ. PERCENT CUM.
2
2
5
30
48
63
74
100
Morethan10%decline
5to10%decline
0to5%decline
Nochange
0to5%increase
5to10%increase
Over10%increase
Don’tknow
Total

55 © Frenz Lambert 2021
Quantied protability increase
Percentagechangeinprotability-Summary
• Over34%ofrespondentsagreethattheyhaveincreasedprotabilityinarangefrom0toover10%.
• Some6%considerthattherehasbeenadeclineinprotabilityinarangefrom0toover10%.
• Nearly30%areunabletosaywhileafurther30%reportnochangeinprotability.
Comment:
Thesharereportingpositiveratesofprotabilityincreaseheredoesnotseemfullyconsistentwithanswerstothebroader
questionofwhetherprotabilityhasincreased,where27%agreedthattherehadbeensomeincreaseinprotability.
Thedivergenceislargelydue(numerically)to38respondentswhoanswered“NeitherAgreenorDisagree”tothegeneral
questiononprotabilitybut“0to5%”topercentagechangeinprotability.Afurther12indicated“5to10%”increase.
OTHER FOOD SAFETY STANDARDS
ThesurveyrepeatedafewofthecommercialoutcomequestionsbutaddressedtoFBOswhowereapplyingotherfood
safetystandardsintheiroperations.Thiswasaimedatprovidingsomeelementsofabroadercontextfortheinformation
gatheredonthosecerticatedtotheBRCGSstandard.Thequestiondidnotspecifywhatsortsofstandardtoinclude,
egnotspecicallyGFSIbenchmarkedstandards.SorespondentscouldbethinkingofISO22000orpossiblysome
customerspecicstandards.Themajorityofsurveyrespondents(425of450)completedthesequestions,suggestingthat
mostsuppliersareoperatingincompliancewithmorethanonefoodsafetystandard.
Inbroadterms,thepatternofresponsesweresimilartothoseconcernedwithBRCGSstandardsonly.Relativelylarge
dierencesthoughoccurredfor:
“Increasedsalestonewcustomers”where55%ofBRCGScertiedFBOsagreedagainst43%ofthoserespondingon
“Otherfoodsafetystandards.”
“Reductionincustomeraudits”conrmedby47%ofBRCGScertiedrespondentsagainst40%ofthosealsousingother
standards.
PROFITABILITY INCREASE
6
4
19
132
87
37
30
132
447
1
1
4
30
19
8
7
29.53
100
FREQ. PERCENT CUM.
1
2
6
36
55
64
70
100
Morethan10%decline
5to10%decline
0to5%decline
Nochange
0to5%increase
5to10%increase
Over10%increase
Don’tknow
Total

56
© Frenz Lambert 2021
Sales - existing customers
Increasedsalestoexistingcustomers-Summary
• Around35%ofrespondentswithcerticatestostandardsinadditiontoBRCGSreportedanincreaseinsalesto 
 existingcustomers.(ThisresultissimilartobutsomewhatlowerthanforBRCGScertication.)
• Some15%didnotagreethattherewasanincrease.
• Theremaining50%wereneutral.(AmuchhigherproportionthaninthecaseofBRCGSstandards,where40%
 wereneutral.)
Sales - new customers
Increasedsalestonewcustomers-Summary
• Over43%agreedthattheyexperiencedincreasedsalestonewcustomers.(Thisismarkedlylowerthanthe55%of
 BRCGScerticatedrespondents.)
• Just11%disagreedwiththeproposition.
• 45%wereneutral.
INCREASED SALES VOLUMES -EXISTING CUSTOMERS
77
11
53
133
137
14
425
18
3
12
31
32
3
100
FREQ. PERCENT CUM.
18
21
33
64
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
INCREASED SALES VOLUMES - NEW CUSTOMERS
76
7
39
118
164
22
426
18
2
9
28
39
5
100
FREQ. PERCENT CUM.
18
19
29
56
95
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

57 © Frenz Lambert 2021
Sales - home market
Increasedsalesinhomemarket-Summary
• Some26%ofrespondentsagreesthatsalesintheirhomemarkethadincreased.(Slightlylowerthanthe30%of 
 BRCGScerticatedrespondents.)
• Around15%disagreedwiththepropositionofhigherdomesticsales.
• Thelargershare-55%-wereneutral.
Sales - export markets
Increasedsalesinexportmarkets-Summary
• Morethan42%ofrespondentsexperiencedincreasedsalesinexportmarkets(slightlylessthanthe46%ofBRCGS
 certicatedrespondents).
• Some10%disagreedwiththeideaofincreasesinexportsales.
• While47%wereneutral.
INCREASED SALES VOLUMES - HOME MARKETS
92
19
60
143
99
11
424
22
4
14
34
23
3
100
FREQ. PERCENT CUM.
22
26
40
74
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
INCREASED SALES VOLUMES - EXPORT MARKETS
87
9
35
113
149
31
424
21
2
8
27
35
7
100
FREQ. PERCENT CUM.
22
26
40
74
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

58
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Cost reduction
Costreduction-Summary
• Just17%ofrespondentsagreedthatcerticationtoanotherstandardledtoloweroperatingcosts.
• But39%disagreed.
• While43%wereneutral.
Protability
Increaseinprotability-Summary
• Around29%ofrespondentsagreethatprotabilityhasincreased.
• However21%disagree.
• Butover50%areneutralonprotability.
ThispatternofresponsesisverysimilartothoseforBRCGScertication.
REDUCTION IN OPERATING COSTS
71
32
135
112
59
14
423
17
8
32
26
14
3
100
FREQ. PERCENT CUM.
22
26
40
74
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
INCREASE IN PROFITABILITY
81
15
74
133
109
11
423
19
4
17
31
26
3
100
FREQ. PERCENT CUM.
19
23
40
72
97
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total

59 © Frenz Lambert 2021
Customer audits
Fewercustomeraudits-Summary
• Over40%ofrespondentsagreethattherearefewercustomerauditsaftercerticationtoanotherthird-partystandard.
 Thiscompareswith47%onBRCGScertication.
• Some25%disagreeonthisimpact.
• While44%areneutral.
RESPONSES BY SUB-GROUPS
Thefollowingtablesreportonthetestofstatisticalsignicanceacrosssub-groupsofFBOs:byregion;size;and
timecertied.
By region
A LOWER NUMBER OF CUSTOMER AUDITS
56
30
76
88
139
35
424
13
7
18
21
33
8
100
FREQ. PERCENT CUM.
13
20
38
59
92
100
Notapplicable/don’tknow
Stronglydisagree
Disagree
Neitheragreeordisagree
Agree
Stronglyagree
Total
Export competitiveness
Competitorcertied
Employeeresistance
Upgradephysicalcapital
Coverageofoperations
Bestvalueformoney
Productrecalls
Organisation
Export competitiveness
Salestoexistingcustomers
Pearsonchi2(25)=86.6229Pr=0.000
Pearsonchi2(25)=50.9086Pr=0.002
Pearsonchi2(10)=18.1847Pr=0.052
Pearsonchi2(10)=19.9154Pr=0.030
Pearsonchi2(10)=19.7933Pr=0.031
Pearsonchi2(10)=47.8302Pr=0.000
Pearsonchi2(10)=44.9076Pr=0.000
Pearsonchi2(10)=41.4187Pr=0.000
Pearsonchi2(10)=70.8166Pr=0.000
Pearsonchi2(10)=24.1012Pr=0.007
UKlowimportance,
Europehighimportance

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By size
By time certied
BRCGScharges
Coverageofoperations
Bestvalueformoney
Homecompetitiveness
Customeraudits
Pearsonchi2(6)=13.0886Pr=0.042
Pearsonchi2(6)=13.9317Pr=0.030
Pearsonchi2(6)=15.1187Pr=0.019
Pearsonchi2(6)=17.8515Pr=0.007
Pearsonchi2(6)=15.1756Pr=0.019
1-50highagree
501-1500morellikelytoagree
1-50morelikelytoagree
Export competitiveness
Recruitment
Homecompetitiveness
Protability
Customeraudits
Pearsonchi2(20)=33.5231Pr=0.030
Pearsonchi2(8)=16.1911Pr=0.040
Pearsonchi2(8)=17.1027Pr=0.029
Pearsonchi2(8)=20.9139Pr=0.007
Pearsonchi2(8)=32.9498Pr=0.000
1-5yearshavehigherthan
averageagreement
1-5yearshighagree,over15
yearslowagree
1-5yearshighagree,over11
yearslowagree
1-5yearhighagree

61 © Frenz Lambert 2021
ANNEX 2. FACTOR, REGRESSION AND CLUSTER ANALYSES
FACTOR ANALYSIS
Toarriveatthetypologyofcerticationweuse39surveyinstruments(questions)coveringthefollowingbroadareas:(i)
agreementwiththeimportanceofasetofobjectivesforcerticationconsistingofsixindividualquestions;(ii)agreement
withnancialcostsandotherchallenges(10questions),(iii)choiceofBRCGS(4questions);(iv)agreementwithasetof
operationaloutcomes(8questions);(v)agreementwithspecicmarketoutcomes(4questions);and(vi)agreementwitha
setofcommercialoutcomes(7questions).TheresultsarepresentedintheAppendix.Thesurveyresponsescanusefully
bereducedintovefactorsortypesofcerticationuse.
• Type 1 Product and process innovation.Thisfactorexplainsthelargestshareofvariationinthedataandpullstogether
 issuesaroundimprovingproductqualityandproductsafety,togetherwithinvestmentintrainingandnewtechnology.It
 alsoscoreshighlyonthechoiceforaBRCGSstandardandincreasedprotability.
• Type 2 Competitiveness led growth in the home market.Thistypologysummarisesresponsesconnectedwith 
 increasedsalesinthehomemarketaswellasincreasedprotability.
• Type 3 Competitiveness led growth in export markets.Thistypologypullstogetherthepatternofresponsesforexport
 marketgrowthandcompetitiveness.
• Type 4 Costs of certication and investment.Drawstogetherresponsepatternsaroundthepossiblecostsofattaining
 andutilisingcertication.
•Type 5 Customer requirement for certication.Bringstogetherallquestionsrelatedtothepullforcerticationvia 
 customerrequirements.Thistypealsodrawsincostsaspectsofthecerticationprocess.
Goingacrossthetopofthetablethetypologyofcerticationuse.Determiningtherowsoftheablearethe39individual
surveyquestionsthataresummarisedintothevetypes.Thenameofeachtypologyisourowninterpretationbasedon
thevaluesinthetable.Eachcellinthetableshowshowstronglyaspecicsurveyquestioncorrelateswithorloadsup
ontoaspecictypologyandhowmuchitcontributestoitsmeaning.

62
© Frenz Lambert 2021
Table1.Factoranalysis
Source:owncalculations.N=425.
Methodology for the factor analysis
ThefactoranalysisisperformedusingaSpearmanrankcorrelationmatrix.Allvariablesfeedingintotheanalysisare
measuredona5-pointlikertscalerangingfromstronglydisagreetostronglyagree.Rotationmethodvarimax.Factor
loadingsbelow0.3arenotshown.5factorswitheigenvaluesgreaterthan1areretained.Allfactorstakentogether
explain87%ofvariationinthedata.Theresultingfactorscoresaresavedusingaregressionmethod.
Certicationisrequiredbycurrentcustomers
Certicationisrequiredbypotentialcustomers
Increasecompetitivenessinhomemarket
Increasecompetitivenessinexportmarkets.
Needtosupplysafeproducts
Competitorhascertication
BRCGSspecicchargesareveryhigh
Auditchargesareveryhigh
Costshavebeenincurredfortrainingofstatomeetcerticationrequirements
Costshavebeenincurredforrecruitmentofstatomeetcerticationrequirements
Employeesareresistanttochange
Costshavebeenincurredforneworupgradedmachineryandequipment
LocalInfrastructureproblemssuchasaccesstoauditors
Costshavebeenincurredfornew/upgradedIT
Costshavebeenincurredduetoincreasedpaperworkanddocumentation
Costshavebeenincurredforchangestoproductdevelopment
Requiredbybiggestexistingcustomer
Goodcoverageofouroperations
Highqualityofauditors
Bestvalueformoney
Wehaveexperiencedfewerproductrecalls/withdrawals
Wehaveachievedbetterorganisationofproduction
Ourproductqualityhasimproved
Ourproductsafetyhasimproved
Productinnovationhasincreased
Wehaveinvestedinnewtechnology
Wehaveinvestedintraining
ThereisbetterIntegrationwithothermanagementstandards(e.g.ISO9001)
Wehaveincreasedcompetitivenessinthehomemarket
Wehaveincreasedcompetitivenessinexportmarkets
Thereisaccesstolargerhomemarket
Thereisaccesstolargerexportmarket
Increasedsalesvolumes-existingcustomers
Increasedsalesvolumes-newcustomers
Increasedsalesvolumes-homemarkets
Increasesalesvolumes-exportmarkets
Reductioninoperatingcosts
Increaseinprotability
Alowernumberofcustomeraudits
COMPETITIVENESS LED
GROWTH IN THE HOME MARKET
PRODUCT AND PROCESS
INNOVATION
COSTS OF CERTIFICATION
AND INVESTMENT
COMPETITIVENESS LED
GROWTH IN EXPORT MARKETS
UNIQUENESS
CUSTOMER REQUIREMENT
OF CERTIFICATION
SURVEY CATEGORY
SURVEY QUESTION
IMPORTANCE OF
OBJECTIVES FOR
CERTIFICATION
FINANCIAL COSTS AND OTHER
CHALLENGES
CHOICE
OF BRCGS
OPERATIONAL OUTCOMES
MARKET
OUTCOMES
COMMERCIAL OUTCOMES
0.6
0.6
0.6
0.5
0.8
0.8
0.6
0.6
0.6
0.6
0.9
0.6
0.8
0.6
0.6
0.6
0.8
0.7
0.7
0.7
0.7
0.4
0.4
0.6
0.5
0.6
0.7
0.8
0.5
0.3
0.5
0.3
0.4
0.5
0.3
0.3
0.6
0.6
0.9
0.5
0.5
0.4
0.4
0.5
0.3
0.6
0.3
0.4
0.4
0.6
0.6
0.5
0.4
0.6
0.5
0.5
0.4
0.4
0.4
0.4
0.5
0.7
0.7
0.6
0.6
0.6
0.5
0.3
0.4
0.4
0.4
0.4
0.6
0.5
0.8
0.7
0.7
0.7
0.8
0.4
0.5
0.8
0.3

63 © Frenz Lambert 2021
REGRESSION ANALYSIS
Weperformedalinearregressiontolookatcorrelationsbetweenthefactorsandchangesinsalesandprots.
Table2Regressionresultsfortypesofcerticationandoutcomes–protsandsales
Andanorderlogitregressionwhichshoeshighlysimilarcorrelations.
VARIABLES
0.25***
(0.06)
0.22***
(0.06)
0.22***
(0.05)
-0.10*
(0.06)
-0.02
(0.07)
2.67***
(0.64)
297
10.17***
0.15
(1)
CHANGE IN PROFITS
(2)
CHANGE IN SALES
Product and process innovation
Competitivenessledgrowthinthehomemarket
Competitivenessledgrowthinexportmarkets
Costsofcerticationandinvestment
Customerrequirementofcertication
Constant
Observations
F-test
R-squared
Standarderrorsinparentheses
*** p<0.01, ** p<0.05, * p<0.1
Regressionmethods:OLS
0.21***
(0.07)
0.28***
(0.06)
0.27***
(0.06)
0.02
(0.06)
0.27***
(0.08)
0.56
(0.67)
314
13.36***
0.18

64
© Frenz Lambert 2021
Table3Regressionresultsfortypesofcerticationandoutcomes–protsandsales
CLUSTER ANALYSIS
Wethenuseclusteranalysis–atechniquethatgroupstheFBOsbytheirsimilaritiesanddierencesacrossthevetypes
ofcerticationuse.Thetablebelowliststheveresultinggroups(clusters)andtheircharacteristicswithregardstotheve
factors:Productandprocessinnovation;competitivenessledgrowthinthehomemarket;competitivenessledgrowthin
exportmarkets;costsofcerticationandinvestment;andcustomerrequirementforcertication.
Table3.GroupingsofFBOsbytypologyofcerticationuse
Source:owncalculations.
VARIABLES
0.47***
(0.11)
0.46***
(0.10)
0.43***
(0.09)
-0.19*
(0.11)
-0.09
(0.13)
-0.50
(1.15)
0.03
(1.12)
1.19
(1.09)
3.85***
(1.12)
5.36***
(1.13)
6.41***
(1.15)
63.81***
0.07
297
(1)
CHANGE IN PROFITS
(2)
CHANGE IN SALES
Product and process innovation
Competitivenessledgrowthinthehomemarket
Competitivenessledgrowthinexportmarkets
Costsofcerticationandinvestment
Customerrequirementofcertication
/cut1
/cut2
/cut3
/cut4
/cut5
/cut6
LRchi2(5)
PseudoR2
Observations
0.37***
(0.10)
0.50***
(0.10)
0.50***
(0.09)
0.02
(0.10)
0.39***
(0.12)
2.98***
(1.08)
3.46***
(1.06)
4.16***
(1.05)
6.83***
(1.10)
8.01***
(1.12)
9.25***
(1.14)
77.46***
0.08
314
CLUSTERS
Group1
Group2
Group3
Group4
Group5
NO. OF
FBOS
CUSTOMER
REQUIREMENT OF
CERTIFICATION
COSTS OF
CERTIFICATION
AND
INVESTMENT
COMPETITIVENESS
LED GROWTH IN
EXPORT MARKETS
COMPETITIVENESS
LED GROWTH IN
THE HOME
MARKET
PRODUCT
AND PROCESS
INNOVATION
114
27
199
40
45
0.4
0.3
0.0
0.8
-1.9
0.1
-1.8
0.2
-0.3
0.1
0.3
0.2
0.3
-2.0
-0.5
-0.6
-0.9
0.6
0.3
-0.6
-0.8
0.9
0.2
-0.1
0.7

65 © Frenz Lambert 2021
Thevariablesfeedingintotheclusteranalysisarethesavedstandardizedfactorscores.Therefore,anegativevalueis
indicativeofascorebelowtheaverageonatypeandapositivevalueofascoreaboveaverage.Scoresgreaterthan+/-1
deviatealotfromtheaverage.Putdierently,68%percentofallobservationsfallwithintheintervalof[-1;1].
Methodology for the cluster analysis
TheclusteranalysisusedishierarchicalclusteranalysisusingWardlinkages.5clustersolutionwasselectedfollowing
inspectionoftheclustertreebelow.N=425.
Figure1.Clustertree
0
100
200
300
400
500
G1G2G3G4G5G6G7G8G9G10G11G12G13G14G15G16G17G18G19G20G21G22G23G24G25G26G27G28G29G30G31G32G33G34G35
DISSIMILARITY MEASURE