Capstone Project Chapter One: Implementing a Behavior-Based Food Safety Program in a Food Service Organization
Food safety is increasingly important as businesses expand into new realms of food production: many companies are processing more food than ever before, and there is an increasing risk of cross-contamination and other problems that are sometimes associated with food handling (Fone, 2007). Most companies in the food service and food production industry recognize that food safety is of paramount importance: however, merely recognizing the importance of food safety is not enough to develop a cohesive and coherent food safety program.
One of the most significant problems for many large-scale food service organizations is the problem of the human component. Human beings are prone to making mistakes and are also prone to cutting corners; part of the discussion regarding the development of food service and food safety programs is how to develop a cohesive structure that will protect consumers and encourage all employees to follow the appropriate standards of care (Fone, 2007; Yiannas, 2009; Fone, 2012). Developing solutions is difficult and organizational environments are not changed overnight. However, the structures used to create an environment of food safety within an organization present a series of opportunities to an organization that is willing to go through the trouble to implement these strategies (Food and Drug Administration, 2014). Organizational structures take significant time to change, so understanding the initial structure of the organization—and how this organization is likely to respond to changes—is of fundamental importance when considering implementing a behavior-based food safety program for a food service organization like Roundy’s, Incorporated—especially because this organization has so many varied holdings and subsidiaries (Food and Drug Administration, 2014; Fone, 2007; Fone, 2012).
II. Description of the Organization
Roundy’s, Inc. is a leading Midwest supermarket founded in 1872 as a privately-owned food wholesaling company. In 1952, the company was sold to some of its wholesale customers and until 2002 operated under the Roundy’s corporate name as a retailer owned cooperative, with food wholesaling operations largely focused in Wisconsin. Roundy’s opened its first Pick ’n Save store in 1975 and built a base of company-owned and operated retail stores throughout the 1980s and 1990s. In June 2002, the company was acquired by an investor group. This group, led by Willis Stein and its management team, instituted a number of changes to the organization . At that time, Roundy’s derived more than 50% of its sales from food wholesaling operations and the remainder from the company-operated retail stores. Following the acquisition, Roundy’s accelerated its strategy of expanding its retail store base through acquisitions and growth, while divesting its wholesale operations (Roundy’s Investor Relations, 2015).
As of today, Roundy’s retail consists of more than 21,000 employees operating in its 150 grocery stores, two distribution centers, and commissary in both Wisconsin and Illinois. The Roundy’s owned stores offer all of the products and services found in a conventional supermarket, including nationally branded food products and own-brand products. In addition, the stores feature expansive meat, produce, deli and other perishable products and specialty and prepared foods departments, which represent higher growth and margin categories. Roundy’s also offers a broad line of health and beauty care products and a large selection of seasonal merchandise to maximize the conveniences offered to customers. Substantially all stores have full-service deli, meat, seafood and bakery departments, and 97 stores feature full-service pharmacies (Roundy’s Investor Relations, 2015).
The Pick ’n Save and Copps retail banners in Wisconsin are operated as high volume, value oriented supermarkets that seek to offer attractive prices and the best value among conventional food retailers in a given market. The value price strategy in these stores is complemented by weekly promotions, a broad assortment of high quality fresh produce and other perishable products, as well as a focus on providing a high level of customer service and conveniences (Roundy’s Investor Relations, 2015).
i. Business Details
The company owns a number of subsidiary brands in addition to the Pick ‘n Save brand name. Roundy’s operates Pick ’n Save stores primarily in the Milwaukee area, as well as in certain other Wisconsin markets, including Racine, Oshkosh, Kenosha, and Fond du Lac (Roundy’s Investor Relations). Roundy’s also operates Copps stores primarily in the Madison area as well as in certain northern Wisconsin markets, including Green Bay and Appleton. Roundy’s focuses on leveraging its strong brand names, high level of customer service, high quality perishables and strategically located stores, to increase market share in Wisconsin. The company’s Mariano’s and Metro Market specialty food retail banners combine a value oriented conventional offering with an enhanced selection of full-service premium perishable and prepared food departments (Roundy’s Investor Relations, 2015).
Roundy’s is also responsible for a number of other chains in the Midwestern region of the United States. Roundy’s initially entered the Chicago market in July 2010 through the opening of its first Mariano’s store in Arlington Heights, Illinois. As of today, there are 34 stores operating under the Mariano’s banner (Roundy’s Investor Relations, 2015). Mariano’s is not the only chain that Roundy’s owns in the Midwest; Roundy’s opened its first Metro Market store in August 2004 primarily to serve downtown Milwaukee apartment and condominium residents. The Metro Market store format features an expanded variety of produce, meat and prepared food offerings, coupled with exceptional customer service. As of today, there are three additional Metro Markets operating in Brookfield, Mequon, and Madison. All Metro Market stores operate in-store pharmacies, making them excellent community shops (Roundy’s Investor Relations, 2015).
ii. Products and Services Provided by the Industry
Roundy’s operates in a highly competitive industry. The retail food industry as a whole, and in its own marketing areas in Wisconsin and Chicago, are highly competitive. The company competes with various types of retailers, including national, regional and local conventional supermarkets, national and regional supercenters, membership warehouse clubs, and other alternative food retailers, such as natural foods stores, smaller specialty stores and farmers’ markets. Principal competitors of Roundy’s include:
• Chicago: Jewel/Osco, Meijer’s, and Strack & Van Til.
Some of these competitors have attempted to increase market share by expanding their footprints in Roundy’s marketing areas. This competitor expansion creates a more difficult competitive environment for the organization. Roundy’s also faces limited competition from restaurants and fast-food chains. In addition, other established food retailers could enter in Roundy’s markets, increasing competition for market share (Roundy’s Investor Relations, 2015).
III. Impact of the Organization
Having a solid food safety culture is a choice. Ideally, the leaders at Roundy’s will choose this culture because it is the right thing to do. Food safety should be a firm value of the company. Roundy’s must choose to have a solid food safety culture because this proves that the company values its customers and employees. The leaders at Roundy’s have enough vision and foresight to know that having a strong food safety culture directly and indirectly benefits the business (Roundy’s, 2015).
A food safety program will undoubtedly bring changes to the organization. Until implementation, it is difficult to presuppose what sort of changes might occur; however, with a properly-organized food safety plan, the overall goal of bringing more effective, efficient, and coherent food safety programs to the organization as a whole is likely to be recognized (Fone, 2012; Food and Drug Administration, 2014). The Food and Drug Administration’s National Retail Food Team (2008) notes that human behavior is more likely to be the cause of contamination in food than any other potential problem in the food service industry (Food and Drug Administration National Retail Food Team, 2008).
i. Impact on People
There are a number of important groups that will be affected by the implementation of a food safety program in all locations owned by Roundy’s. The primary goal for groups like the Food and Drug Administration, which recommends the implementation of a behavior-based food safety plan, is to ensure that consumers and workers are safe in the food service environment (Food and Drug Administration National Retail Food Team, 2008). While management might experience some trouble implementing new structures within the organization, organizational changes will always come with a transitional period: the overall changes made to the organizational environment will be beneficial to the people both inside the organization and the millions served by the subsidiaries of the organization (Roundy’s, 2015; Food and Drug Administration National Retail Food Team, 2008; Fone, 2012; Food and Drug Administration, 2014).
As with all organizational changes, there will be a period of transition in which employees of the organization are uncomfortable with the changes that have been made to the organization and to their daily routines (Craig, 1996; Crandell et al., 2015). However, the implementation of changes is of fundamental importance to the organization, as compliance with food safety standards impacts the average customer and can change the customer’s perception of the organization as a whole very quickly (Roundy’s, 2015; Food and Drug Administration National Retail Food Team, 2008; Food and Drug Administration, 2014; Crandell et al., 2015).
ii. Impact on the Planet
Understanding food service through the triple-bottom-line approach is increasingly important in recent years, especially as the consumer becomes more savvy and recognizes the importance of sustainability and corporate responsibility (Crandell et al., 2015). Consumption, land use, and waste management are all important factors for food service companies; responsible farming practices can make a significant difference in the overall environmental impact of a company, for instance, and many food service companies are moving towards local and sustainable farming structures to reduce impact on the planet and the environment as a whole (Food and Drug Administration, 2014). This movement reflects the growing awareness of the average consumer, as well as the growing number of choices that the consumer has in terms of food: although Roundy’s is a large chain, there are still a number of extremely profitable chains local to Roundy’s that offer stiff competition to the organization (Roundy’s, 2015).
iii. Impact on the Company’s Profit
Profit is still a primary concern, and the profit margin for Roundy’s has been suffering in recent years (Taschler, 2013; Milwaukee Business Journal, 2015). The company has shown growing net sales in recent years, but the overall profits have fallen sharply (Taschler, 2013; Milwaukee Business Journal, 2015). The CEO of the organization has noted that Roundy’s is in a transitional phase; however, there is no real evidence to suggest that the transitional phase is coming to an end. If indeed the company is experiencing transition, then transitioning the food safety service program might be much simpler while employees are experiencing new changes in other realms as well (Taschler, 2013; Milwaukee Business Journal, 2015).
IV. Focus Problem and New Opportunity for the Organization
The opportunity to create a food safety culture already exists at Roundy’s, Inc. Ideally, the company will identify specific actions and procedures for food handlers to incorporate into their daily operations in order to attain control over foodborne illness factors. Increasing employee food safety knowledge and improving behaviors can help change behaviors within the organization and can help the organization’s leadership obtain and retain control over foodborne illness transmission (Fone, 2012). The company is in need of a training system that not only educates but changes behavior.
i. Problems and Opportunities
There is no doubt that the organization has been in transition in recent years (Milwaukee Business Journal, 2015). However, Roundy’s has taken steps to change the structural organization and the external strategies of the organization in the hopes of better fitting the needs of the market. Because the company is already in transition, another transition in food safety standards would be relatively easy to introduce to the employee population. The company has recently closed one of its packinghouses, and implementing a new food safety plan within the context of a new packinghouse is perfectly logical and acceptable for many employees. This would allow the organization to bypass many of the problems associated with implementation management in an organization (Craig, 1996). Times of transition tend to be quite stressful for employees, so the company can also use this restructuring as a time to reward employees that have been excellent employees over the years and demonstrate the desired traits for Roundy’s employees. This can also be used to encourage adherence to the food safety standards that have been implemented in the organization.
ii. Strategic Importance for Organization
The organization must develop a way to get back on track in terms of profitability in the market. The Roundy’s organization has been struggling for a number of years with the issue of profit: in some quarters, the company even saw sales increase and profits fall (Milwaukee Business Journal, 2015). Changing this general downward trend must become of primary importance to the organization as a whole, according to analysts in the industry (Milwaukee Business Journal, 2015). The company has not developed an effective method of interacting with new marketplaces yet; part of the problem could be problems associated with problems in food safety culture and efficiency, especially if the organization is switching to new models of sales and marketing for the organization as a whole (Milwaukee Business Journal, 2015; Taschler, 2013). The changes that will be made strategically will be based on the employees of the organization. These employees must be well trained and educated about the importance of food safety procedures, and the benefits of adhering to behavior-based food safety procedures in the workplace. A company like Roundy’s may have an excellent food safety program, but if the employees do not comply, there may as well be no program at all.
V. Roundy’s and Corporate Social Responsibility
Corporate social responsibility (CSR) is becoming more important for consumers, and one aspect of CSR is environmental protection (Crandell et al., 2015). Environmental protection processes are often linked to food safety programs; there are many problems with food safety and disposal in the industry, often because of problems with antibiotics (Food and Drug Administration National Retail Food Team, 2008). Corporate social responsibility goes hand in hand with environmental protection and food safety programs. Stakeholders in Roundy’s are not limited to consumers and employees; because of the massive impact than an organization like Roundy’s can have on the environment, there are tertiary stakeholders in the organization around the country as a whole. Management at Roundy’s has a responsibility to their own shareholders, but they also have a responsibility to the many other people who are impacted by the behavior of the organization.
VI. Organizational Context
A food safety culture can be viewed as how and what the employees at Roundy’s think about food safety, as well as the food safety behaviors that are routinely practiced and demonstrated in the stores operated by Roundy’s employees. In a true food safety culture, these thoughts and behaviors will be sustained over time. A food safety culture is made up of individual and group thoughts, attitudes, and behaviors (Yiannas). Each employee has a responsibility for preparing and serving safe food to Roundy’s consumers, and the company, as a whole, has a shared responsibility to ensure food safety to consumers.
In Roundy’s Mission & Guiding Principles, it is stated that Roundy’s understands the lifestyle needs of consumers better than anyone, and that the company delivers products and services in neighborhood stores that offer an engaging, interactive shopping experience on all levels, especially sight, smell and taste. The company’s guiding principles also states that Roundy’s is an innovative company that takes care of the customer, whatever it takes and they put the customer first (Roundy’s). The company knows that it wins when the customer is at the center of all. To this end, Roundy’s must create a culture where employees feel dedicated in contributing to the well being of its customers and communities.
Internally, Roundy’s is already experiencing transition within the organization (Taschler, 2013; Milwaukee Business Journal, 2015). According to the Milwaukee Business Journal (2015), “Overall, 2014 was a transition year for the company, with investments in Illinois growth and our transition out of the Twin Cities market. Each successive quarter was another building block in creating a solid foundation for the future Roundy's rolled out its Mariano's banner stores throughout 2014, closed its Stevens Point distribution facility and finalized the sale of some Minneapolis-area Rainbow stores, while closing nine others as it exited the market” (Milwaukee Business Journal, 2015). Externally, the company was in transition as well: it changed the face of its stores and experienced a variety of new markets as it moved into new parts of the American Midwest.
Craig, R. (1996). The ASTD Training and Development Handbook: A Guide to Human Resource Development 4th Edition
Crandell, P. G., O’Bryan, C. A., Neal, J. , Delery, J.E. (2015). Best Practices for Making Long-Term Changes in Behavior. Retrieved November 24, 2015 from http://www.foodsafetymagazine.com/magazine-archive1/junejuly-2015/best-practices-for-making-long-term-changes-in-behavior/
Fone, D. (2007). Behavior based food safety training helps processors create a culture of food safety.
Fone, D. (2012). Human Behavior’s Role in Food Safety. Looking out for those who misunderstand their training but have confidence in their knowledge. Retrieved November 24, 2015 from http://www.foodprocessing.com/articles/2012/human-behavior-role-in-food-safety/
Food and Drug Administration. (2014). FDA Retail Food Safety Initiative: Background Information. Retrieved November 24, 2015 from http://www.fda.gov/Food/GuidanceRegulation/RetailFoodProtection/FoodborneIllnessRiskFactorReduction/ucm230315.htm
Food and Drug Administration National Retail Food Team. (2008). FDA Trend Analysis Report on the Occurrence of Foodborne Illness Risk Factors in Selected Institutional Foodservice, Restaurant, and Retail Food Store Facility Types (1998 – 2008). Retrieved on November 24, 2015 from http://www.fda.gov/downloads/Food/GuidanceRegulation/RetailFoodProtection/FoodborneIllnessRiskFactorReduction/UCM369245.pdf
Milwaukee Business Journal,. (2015). Roundy's same-store sales, profits continue slide; CEO Mariano cites 'transition year' - Milwaukee - Milwaukee Business Journal. Retrieved 9 January 2016, from http://www.bizjournals.com/milwaukee/news/2015/03/04/roundys-same-store-sales-profits-continue-slide.html
Roundy’s (2015). Our Mission and Guiding Principles. Retrieved November 8, 2015 from http://jobs.roundys.com/modules/content/index.php?id=11
Roundy’s Investor Relations (2015). Investor Relations. Retrieved November 8, 2015 from http://phx.corporate-ir.net/phoenix.zhtml?c=251227&p=irol-IRHome
Taschler, J. (2016). Roundy's sales increase, profit declines sharply. Retrieved 9 January 2016, from http://www.jsonline.com/business/roundys-sales-increase-profit-declines-sharply-b99137307z1-231047381.html
Yiannas, F. (2009). Food Safety Culture. Creating a Behavior Based Food Safety Management System. Retrieved November 8, 2015 from www.springer.com