New food safety rules may cost small and mid-sized businesses big money

A newly published study by researchers at the University of Massachusetts Amherst estimates that it can cost small and mid-sized food producers tens of thousands of dollars to meet new food safety standards that prescribe proactive measures to ensure the safety of the U.S. food supply. The research is the first to assign an estimated dollar amount to compliance.

The Preventive Controls for Human Food Rule (PCHF), the first phases of which took effect starting in 2016, lays out the steps that large producers must take to comply with requirements related to everything from sanitation and food-allergen controls to recordkeeping and hazard identification. Smaller producers are exempt from some requirements but not others.

This ambiguity has left producers that are too small to have a dedicated compliance unit with little information about costs associated with PCHF, and in some cases, even about the requirements themselves.

Working with 81 small and mid-sized food producers in the Northeast, the research team modified existing food safety training materials to include supplemental information about planning, implementation and management costs associated with adopting the new standards.

The study found that initial costs averaged $21,932 per business, followed by ongoing costs of nearly $8,000 per year, and that even modest efforts to fill the content gap can reduce cost barriers for businesses seeking to follow the new rules. The paper is published in PLOS ONE.

“Small food manufacturers are passionate about what they do and want to have the safest products possible, but the complexity of these new standards has bogged some of them down,” says Jill Ann Fitzsimmons, research assistant professor in the Department of Resource Economics at UMass Amherst, who co-authored the study.

Food safety is not a one-size-fits-all decision for businesses, adds co-author Amanda Kinchla, extension professor at UMass Amherst. “My hope is that this research motivates processors to take the thoughtful investment of time and effort in identifying the true risks associated with their food and implement a management plan to address them.”

In response to the significant growth in local and regional food systems, the U.S. Department of Agriculture recently decided to invest in Food Business Centers across the country to support small food businesses. The centers will use the latest research to help small food businesses be successful.

Fitzsimmons and Kinchla say their work illustrates that the centers can play a key role in helping small businesses understand food safety costs, particularly considering that businesses seeking to grow may wish to comply with standards imposed by supermarkets and other outlets for their products, even if they are exempt from parts of PCHF.

“If you want to scale up and sell to Whole Foods or a regional supermarket chain, they have their own sets of standards and you’re probably going to have to implement these same rules—not for the federal government, but to get your products on retailers’ shelves,” Fitzsimmons adds.

“Demystifying the costs associated with the rule empowers producers to embrace food safety as part of their business culture,” says Kate Minifie, food entrepreneurship program manager with the Western Massachusetts Food Processing Center, which participated in the study. The nonprofit food business incubator works with 50–60 clients annually to bring their products to market, ranging from organic produce to hot fudge.

Training materials from the study are now posted online to help businesses navigate the new standards.