Mike Coupe: Values and provenance provide critical points of competitive advantage

Mike Coupe: Values and provenance provide critical points of competitive advantage

18 January 2014

It's hard to believe that a year has now passed since the Irish FSA found horsemeat in some frozen beef burgers. Whilst Sainsbury's wasn't directly affected, we and our whole industry have been profoundly changed by the horsemeat scandal.

In an economy where value is an imperative, we must not forget our values.

Quite rightly we all faced intense scrutiny from the media and politicians, and most importantly from our customers. Most worrying was the fact that the consumer trust which underpins our industry was dealt a severe blow. But just like the householder who rechecks his locks when his neighbour’s house is broken into, we have boosted our investment in testing, expanded our in-house food laboratory and enhanced our supplier checks and controls.

So what have all the parties – farmers, processors, retailers, brands, restaurants and government – actually learned? Why were some companies affected while others weren’t? Was it the level of testing? The number of audits carried out? Or supplier relationships that made the difference? In short, what has been done, and where do we still need to focus?

Well, one thing we learned was that complacency is never an option. At Sainsbury’s it never was – we have conducted isotope testing on foods for 20 years, and DNA testing for 10 years, all to guarantee provenance. But we have nonetheless significantly boosted our investment in testing, expanded our company food testing laboratory and enhanced our system of supplier checks and controls.

We have increased the number of unannounced supplier audits, examined risks in the food supply chain and developed tools to help us predict where the risks will be greatest. We have also introduced a system of centralised annual tests on every product we sell.

We are not alone in raising our game and we are happy to provide leadership where we can, but no single player has a monopoly on the answers, and it is vitally important that we continue to share information and analysis on risks and fraud prevention.

Because the horsemeat scandal showed we need greater collaboration to best the type of fraud that lay at its heart.  So we welcomed the interim Elliott Report, and many of us have given evidence on audits and product testing to Professor Elliott’s team. But the type of collaboration that began to crystallise in the immediate wake of the crisis must continue - and it must encompass us all with everyone playing their part.

This doesn't mean we stop competing. Quite the contrary, I believe values and provenance provide critical points of competitive advantage. And this is particularly the case when times are tough and people are managing tight budgets. People who have less don't care less.

That's why this week we have relaunched our basics range focusing on the values that make them different as part of our #ValueOfValues campaign.

And this is perhaps the most important lesson of all. In an economy where value is an imperative, we must not forget our values.