The word audit may bring to mind officials in suits digging through piles of paperwork trying to find unknown violations. The thought of a long, confusing process can intimidate any business owner.
In reality, audits are a helpful and strategic way to grow your business. They can identify gaps, risks, and opportunities. They also make sure you meet the requirements for important industry certifications.
You don’t have to navigate the audit process alone. An expert consultant can guide you through the process, double-check you’re meeting all necessary qualifications, and help your business shine when it comes time for the audit.
What is a third-party audit?
Receiving industry-recognized certifications is important to remain competitive for those in the consumer packaged goods industry. To become certified, you will need to complete a third-party audit. You’ve likely heard of first, second, and third-party audits so it’s important to understand the difference.
First-party audits, also known as internal audits, are done by your own company to ensure you’re meeting your own requirements. The auditor will provide an unbiased assessment to senior management.
A second-party audit assesses a partner or supplier so you can continue to work together. For example, an audit would verify your supplier is using approved materials listed in your contract. Your customers can also audit you for the same reason.
Third-party audits are done by an independent party to see if you meet industry standards like ANAB (ANSI National Accreditation Board). Third-party audits are often used to grant certifications, registrations, awards, and approvals.
The Third-Party Audit Process
The specific details of your third-party audit will be shared with you when you start your auditing process. Depending on the reason for your audit, the auditor will follow a series of steps:
- Discuss expectations with management.
- Review documentation and records to understand company operations.
- Check facilities and supply chain against documentation and standards.
- Assess conditions of facilities and speak with management or employees as needed.
- Provide scores and findings to management.
- Verify standards are met for certification.
Third-party audits are nothing to fear. If you receive a score to become certified you can still uncover areas for improvement. If you don’t meet the requirements, your auditor will be able to share what you need to change to become certified.
Why are third-party audits important to customers?
Conscious consumers are becoming more aware of industry standards and expect you to meet them. For consumer packaged goods brands, this means receiving certifications for product safety and quality. 85% of consumers trust product claims verified by independent, third-party certification organizations.
Going through an audit to receive certifications can also help you increase sales. Up to 78% of customers will pay more for products with certifications.
Important Certifications in the CPG Industry
GFSI stands for Global Food Safety Initiative. GFSI doesn’t certify but has developed a single set of food safety standards and certifications you can choose from.
Once you receive your GSFI certification you’ll be able to sell in more markets. The certification proves you’ve met strict requirements and won’t be subject to more audits. Becoming certified also improves food safety practices and employee food safety knowledge.
Additional certification schemes that fall under GFSI include:
- Safe Quality Food or SQF Certification is the most common scheme within GFSI. It helps businesses meet requirements for food safety and quality within the supply chain. SQF Certification will cover the entire supply chain from the farm supplier to the retail stores.
- Food and Safety System Certification 22000 (FSSC 22000) is a certification for auditing Food Safety Management Systems. They have international and independent standards, including specific technical specifications.
- Brand Reputation Compliance Global Standards (BRCGS) (formerly BRC) is a certification recognized by GSFI certification. The standards of BRCGS include product safety, documentation, and supplier approval. It also checks for complaint handling, traceability, training, and more. Certification means you can prove the quality and safety of your production against global standards.
- PrimusGFS is a certification available for products in the produce sector. This includes everything from the ranches and farms, to cold storage, and packaging and processing plants.
GRMA Certification
The GRMA Certification or Global Retailer and Manufacturer Alliance ensures the quality and safety of health and wellness products. This includes cosmetics, over-the-counter drugs, and dietary supplements.
Depending on product category, standards include production, packaging, labelling, storage, or shipping requirements.
B Corp Certification
B Corp Certification is considered the gold standard for sustainable and ethical good when it comes to running any business, not just a consumer-packaged good business. This certification’s standards include an examination of the materials in your product, supply chain, finances, and more.
B Corp standards are also regularly changing, so be sure to review their certification requirement updates before you get started.
Consumer Packaged Goods Product Certifications
Consumers make buying decisions in as little as 13 seconds. To capture their sale, you’ll want to have recognized certifications on your labels. Certifications like USDA Certified Organic or Certified Gluten-Free make it easy for your customer to shop. Finding products that meet their needs builds brand loyalty.
Each certification has unique standards that will need to be audited. For example, to be certified as organic, you’ll need to have your farm suppliers inspected and make sure your supply chain is compliant.
Product certification will be an important part of business growth in the future. 87% of millennials feel company success should be measured by environmental and social impact, not just financials.
Receiving product certifications helps build trust with your consumer. Certifications on labels share your values like ethical sourcing or being cruelty-free.
Certification Process for CPG Brands
For most certifications, you’ll follow a standard process to become certified:
- Select the appropriate certification or standard.
- Complete training on certification requirements.
- Apply new management systems required by the standard.
- Document your processes.
- Begin employee training.
- Conduct a third-party audit.
- Receive your certification.
The timeline to become certified can take 6-12 months. Time will depend on how accurate your documentation is and what processes you have in place. Once certified you will be evaluated regularly to ensure you remain compliant.
There is a cost to become certified and it will vary depending on how your business operates. You can get an estimate from certification bodies before you begin the process. Be prepared to include the cost of staff time (training on systems), consultants, software, and audits.
How can an expert consultant help you pass your next audit?
The process of becoming certified can feel complex and overwhelming. From choosing the right certification to preparing for your audit, consider getting help from an expert consultant. The right consultant has experience helping businesses like yours receive accreditation, or pass audits. They’ll come with a tool kit and wealth of knowledge to help you expedite your auditing process.
Nothing is worse than working so hard to pass an audit and receive a certification, sometimes for years, only to find out you missed something or weren’t thinking about a step correctly. Don’t let that be your business.
JIT Expert Hive Consultants can help you determine which audit could help you return the highest return on investment, and prepare your business and employees to pass. The time you’ll avoid from a failed audit will be well worth the investment.
If you’d like to become certified and need some guidance, fill out our contact form for help from one of our expert consumer packaged goods consultants.