Walmart China has announced that the company will significantly increase its investment in food safety to more than USD 48.2 million till 2015. Previously, the retailer had announced investments of over USD16 million from 2013 to 2015.
“The increased investment reflects our growing commitment to enhance food safety management in the supply chain and in all our stores,” said Paul Gallemore, Chief Compliance Officer, Walmart China. He further added: “As a result, Walmart hopes to provide even greater assurance of food product quality, authenticity and safety to our customers.”
Sean Clarke, President and CEO, Walmart China, said: “Food safety is rooted in Walmart’s compliance culture. We strive for our customers to have complete trust in the products they buy from us. All our efforts are aimed to ensure the authenticity, safety and quality of food for our customers in China.”
With the increased investment, Walmart plans to focus on the following key areas to further improve food safety management over the coming years:
Increasing supplier audits and tests: The company will perform additional testing and tougher standards for suppliers in 2014, increasing DNA testing on meat products by 100 percent and facility audits and inspections of primary producers by more than 30 percent from 2013. The number of facility audits and inspections of primary producers were up 50 percent in 2013, from a year earlier.
During 2013, Walmart China performed more than 400 DNA test for meat products, close to 1,400 third party audits and inspections of farms, factories, processing centers, slaughterhouses, and more than 50,000 product tests in the company’s distribution centers.
Quality assurance through expanding fresh distribution network: Walmart now has nine fresh distribution centers across China in Shenzhen, Guangzhou, Shanghai, Beijing, Chengdu, Hangzhou, Wuhan, Shenyang, and Xiamen. The centers help improve quality control because the majority of fresh suppliers deliver once to the distribution center instead of multiple times to each store. Products are tested at the distribution center for compliance against safety and quality standards in a testing lab, ensuring consistent quality control and that unqualified products can be detected before they arrive at a store. Two additional fresh distribution centers will be added by the end of 2014, at which point Walmart distribution centers will serve every Walmart Supercenter in China. In 2013, Walmart China’s seven fresh distribution centers conducted more than 139,000 tests. In the first quarter of 2014 alone, 129,000 tests were conducted.
Global leverage to apply new technologies: Following the iPad training and mobile lab launched last year, Walmart will continue to invest and apply new technologies to improve food safety and quality control standards in stores. Later this year, Walmart is planning to introduce the “SPARK” (Sustainable Paperless Auditing and Record Keeping) system in China. The technology has been used in Walmart’s US business and provides monitoring of food storage temperatures through Temperature Measuring Devices that communicate wirelessly. The temperature and other measurements are automatically updated for analysis and monitoring.
Mobile labs, another food safety initiative by Walmart, are being ramped up as an additional effort in protecting customers. In 2013, Walmart China’s first mobile lab conducted over 35,000 tests on food in stores in Guangdong. With the second mobile lab being launched in Shanghai at the end of last year, the two labs now serve 147 stores in Guangdong, Jiangsu, Zhejiang and Shanghai, and the number of tests is expected to double this year.
Enhanced in-store food safety standards and strengthened stores auditing: Walmart has conducted food safety audits in its more than 400 stores across China based on international in-store food safety standards. These audits are conducted by third party specialist agencies monthly, checking in-store cleaning, personal hygiene of associates, food processing, cooking methods and safe storage. Moreover, the company will further improve the food safety standards at Walmart supercenters and Sam’s Clubs by optimizing the design and layout of stores, strengthening pest control, expanding and improving staff training and examination.
Stronger compliance team: Walmart has developed a professional compliance team of more than 100 retail experts and is committed to developing stronger team to support compliance management in both Hypermarkets, Sam’s Club and distribution centers. In addition, Walmart will continue investing in supplier training, helping suppliers understand and comply not only with China’s regulations, but the company’s extensive and rigorous food safety policies.
The retailer is also joining hands with China General Chamber of Commerce, suppliers and Guokr, a popular social science media outlet, to provide science information on food safety to consumers. The company will also set up interaction zones in Walmart stores in Beijing and Fuzhou to display experiments on food science so as to help customers learn more about food safety knowledge during their shopping experiences.
Wal-Mart Stores serves customers and members more than 245 million times per week under 69 different banners in 27 countries. In Asia, Walmart currently operate more than 850 stores in China, India and Japan, serving 25 million customers every week.
Walmart entered the Chinese market and opened its first Supercenter and Sam’s Club in Shenzhen in 1996. Its Global Sourcing office was set up in Shenzhen in 2002. Currently, Walmart operates two main formats in China including Supercenters and Sam’s Clubs.