Risk factors explained

Food safety

The ability to provide safe, good quality food is fundamental to the business of food production, and a critical component to ensuring global food security.

Key stats

48
%
of companies were ranked ‘high risk’ on this category.
72
%
of companies did not disclose the number of product recalls issued each year.
1
st
Inner Mongolia Yili, a Chinese state-owned dairy producer, and Lerøy Seafood Group, a Norwegian aquaculture company, were the top performers in this category.

Food safety scandals and outbreaks of livestock pandemics (such as avian flu) can have significant impacts on the value of even the largest animal protein producers.

For example, the value of shares in Brazilian livestock producer BRF dropped 19% in one day when it was implicated in a major food safety scandal in Brazil in 2017. In 2015, E. coli outbreaks at a number of Chipotle Mexican Grill restaurants resulted in 177 food safety cases across ten states and led to a 35% drop in share price.

In South Africa, an outbreak of listeriosis in early 2018 led to the recall of cold cut meats and caused heavy damage to the South African pork industry. Since the scandal, the South African Meat Processors Association reported a 75% drop in the demand for processed meat products.

Other findings include: 

  • 9 companies in the Index achieved the highest scores in this category, including two Chinese companies.
  • Dairy and aquaculture were the sector’s best performing companies on food safety.
  • Companies performed relatively well on traceability systems – with 35% claiming full traceability systems – an indication that businesses tend to prioritise the management of issues that have an immediate financial impact relative to other sustainability issues.

*Companies with ‘multiple’ proteins derive significant revenues from more than one protein source.