Blue Ribbon Winner: IKEA


Introduction

“Extra! Extra! Read all about it!” The latest “big story” plasters across newspaper headlines and internet homepages on a daily basis. The media loves to deliver a good scandal, and the public becomes engrossed in every detail. The nature of the scandal and the danger it produces dictate the reaction and outrage; media and consumers vehemently distress over news of food safety issues. The USDA issued over sixty-three nation-wide food recalls in the year 2009, which appears to be about an average number of yearly recalls in the last decade[i] (Figure 1). In the early months of 2013, international companies, such as IKEA, issued several food recalls as DNA tests detected horsemeat in beef and pork products, and high levels of bacteria normally found in feces, in select desserts. Although safety officials and retailers issue these food recalls, the contamination and mislabeling usually occurs elsewhere within the supply chain. Retailers, suppliers, regulators, and consumers each have duties and responsibilities to each other to ensure quality control and safety of food products.

Furniture to Food

Ingvar Kamprad founded IKEA as revolutionary company in Sweden in 1943 on the basis of meeting needs at reduced prices. Original products sold include pens, wallets, picture frames, table runners, watches, jewelry, and nylon stockings. IKEA introduced furniture in 1948 and the line grew through the 1950s as showrooms and IKEA stores opened throughout Sweden. The first IKEA Restaurant opened in 1960 and accompanied the growth of IKEA stores worldwide. Today, IKEA Restaurants play an essential role in welcoming customers into IKEA stores and providing a relaxing atmosphere with a budget-friendly menu. The Swedish food market within IKEA stores provides customers with the opportunity to prepare pre-packaged foods from frozen meatballs to coffee, in their own homes.

Not Horsing Around

On January 15, 2013, the Food Safety Authority of Ireland (FSAI) announced that it found horse DNA in beef products sold in Ireland and the UK. Major retailers pulled product from the suppliers named in investigation from their shelves and the UK’s Food Standards Agency (FSA) stated, “In addition to the widespread testing we are doing, we’ve instructed the industry to urgently carry out its own tests on processed beef products to see whether horsemeat is present.”[ii] The Swedish National Food Agency set out to perform DNA testing across Sweden to crack down on suspected mislabeling of horsemeat,[iii] but it was Czech Republic authorities that first detected horsemeat in IKEA’s frozen meatballs produced by the Swedish company, Familjen Dafgard. IKEA withdrew the meatballs from the affected markets across Europe at the end of February, just two weeks after the company’s own tests did not detect horse DNA.[iv]

http://www.npr.org/player/v2/mediaPlayer.html?action=1&t=1&islist=false&id=172938174&m=172938167

According to a press release addressing the horsemeat adulteration, “IKEA Group is committed to serving and selling high quality food that is safe, healthy and produced with care for the environment. ‘The trust of our customers is of outmost importance for us’, says Anders Lennartsson, IKEA Food Services AB. ‘We do not tolerate any other ingredients than the ones stipulated in our recipes or product specifications’.”[v] IKEA reissued this statement a few weeks later when high levels of coliform bacteria were found in a shipment of Almond chocolate and butterscotch cakes to China. In answering concerns about this instance of contamination, IKEA proclaimed, “All tests show that our cakes live up to the highest safety and quality standards. There are no harmful bacteria found in any of the tests, including cakes from the batch that was destroyed by Chinese customs” over and over again.[vi] At the end of March, Belgian authorities found pork present in IKEA’s elk lasagna; the company issued a sales stop and offered a refund for the mislabeled product. Though this adulteration did not pose any health risks, IKEA has taken a position that does not tolerate “any other ingredients than the ones stipulated in our recipes or specifications” in its food products.[vii]

Ethical Supply Chain Management

The series of food adulteration, contamination, and mislabeling issues sparked public scrutiny of suppliers in the food industry. In the wake of past mad cow disease outbreaks, European nations implemented stringent labeling regulations on fresh meat. “Since 2011, labels on unprocessed beef sold in Europe have been required to identify where a cow was born, raised and slaughtered; most countries now want this requirement extended to processed beef.”[viii] This is the only mandatory traceability system currently enforced throughout a complete food chain; traceability of all other foods is essentially voluntary and not well regulated, though a few countries have introduced broad requirements.[ix] Companies have wide latitude in making ethical decisions regarding food supply issues and the complexity of these supply chains leaves opportunities for unscrupulous activity.

IKEA revolutionized supply chain management in the furniture industry with its flat-pack business model. The company realized the savings that flat-pack shipping provided over traditional furniture manufacturing methods and built its warehouse stores around that concept.

IKEA also passes along savings to customers by substituting wood composite materials for true wood and other higher cost materials, whenever possible. From a deontological perspective, if substituting lower cost goods for higher cost goods in order to save the consumer money is a universal maxim, then the horsemeat adulteration cases are actually ethical. On the other hand, suppliers purposely deceiving downstream companies like IKEA are in violation of Kant’s “respect for persons” principle.[x] If mislabeling meat content was adopted as a universal maxim, the categories of meat types would break down, and all meat would become “mystery meat” as a result of unethical practices. “The trust of our customers and co-workers is of utmost importance to us. In light of the horsemeat concerns in the food industry, it is clear that IKEA Group, despite high standards, has failed to live up to our customers’ expectations. We take this very seriously and are now making changes to further strengthening traceability throughout the entire food value chain”, says Edward Mohr, Global IKEA Food Manager.[xi] In response to the contamination issues IKEA has faced, the company seeks to bring the complexities of the food supply chain more in line with its vertically integrated furniture supply chain:

As an immediate measure, we have, together with a quality assurance company (SGS), developed a set of requirements for minced meat products. These requirements include;
• Limited number of suppliers of meat.
• Traceability back to the abattoirs.
• No meat purchased through traders.
• DNA analyses are made on both incoming raw material and on the final product. Only products showing no traces of horsemeat DNA are shipped to IKEA stores.
The requirements are valid for all minced meat products, global as well as local.
We are also developing a comprehensive standard with requirements on traceability, slaughter, deboning and processing of meat products. The standard is developed together with a quality assurance company, SGS, and is expected to be ready before the end of April 2013. The standard will be implemented during the next six months. Announced and unannounced audits together with tests and documentation will secure compliance. Our goal is traceability all the way back to the farms.[xii]

These actions can be seen as having “purity of motive” Bowie discusses, as IKEA wishes to eliminate risk to consumers and regain their trust through more stringent regulation. Rather than continue to use the lowest cost suppliers with a strict focus on the bottom line, IKEA can actually enhance its profits by simplifying and/or vertically integrating its supply chain and respecting the humanity of all of its stakeholders.

To further demonstrate IKEA’s ethical standards of supply chain management, consider the company’s focus on sustainability. The flat-pack shipping method allows more goods to be shipped in fewer trips, and the minimalist design means less material is used in fabrication, resulting in lower emissions and transportation costs. “The entire IKEA process aims at creating products that leave minimum impact on the environment,” including the company’s signature recycled honeycomb panel design.[xiii] In regard to the horsemeat scandal and recovering the recalled product referenced in Figure 1, IKEA is trying to “find a sustainable solution for the sales stopped meatballs that may contain horsemeat. There is no health risk associated with eating the meatballs. We are in dialogue with the relevant authorities to explore possibilities to take care of the sales stopped meatballs in a responsible way, in accordance with legal demands…. Landfill is not an option.”[xiv] IKEA was able to come out of this controversy with its reputation intact due to transparent addressing of ethical issues with suppliers and consumers, and a plan to improve food safety in the future.

Figure 1
Figure 1


[i] “Taking Harmful Foods Off the Shelf.” MCT Graphic Services. 2010. Global Issues In Context. Web. 8 Apr. 2013.

[ii] Food Standards Agency. FSA Statement on Horse Meat InvestigationFood Standards Agency. N.p., 8 Feb. 2013. Web. 7 Apr. 2013. <http://www.food.gov.uk/news-updates/news/2013/feb/investigation-statement#.UWLnF6vwJfo&gt;.

[iii] “Sweden to DNA Test Meat Products Nationwide.” The Local: Sweden Edition. N.p., 12 Feb. 2013. Web. 7 Apr. 2013. <http://www.thelocal.se/46150/20130212/#.UWKNWqvwJfo&gt;.

[iv] Higgins, Andrew, and Stephen Castle. “Ikea Recalls Meatballs After Detection Of Horse Meat.” New York Times 26 Feb. 2013: A4(L). Global Issues In Context. Web. 8 Apr. 2013.

[v] IKEA. IKEA Stores Resume Sales of Wiener SausagesIKEA. N.p., 6 Mar. 2013. Web. 7 Apr. 2013. <http://www.ikea.com/gb/en/about_ikea/newsitem/sales_resume_wiener_sausages&gt;.

[vi] IKEA. Bacteria in IKEA Almond Cake: Products Not Sold the UK and Ireland Stores. IKEA. N.p., 22 Mar. 2013. Web. 7 Apr. 2013. <http://www.ikea.com/gb/en/about_ikea/newsitem/almond_cake_sales&gt;.

[vii] IKEA. Statement regarding Recent Media Coverage on Our Elk LasagneIKEA. N.p., 6 Apr. 2013. Web. 7 Apr. 2013. <http://www.ikea.com/gb/en/about_ikea/newsitem/elk_lasagne&gt;.

[viii] Higgins, Andrew, and Stephen Castle. “Ikea Recalls Meatballs After Detection Of Horse Meat.” New York Times 26 Feb. 2013: A4(L). Global Issues In Context. Web. 8 Apr. 2013.

[ix] A. Regattieri, M. Gamberi, R. Manzini, Traceability of food products: General framework and experimental evidence, Journal of Food Engineering, Volume 81, Issue 2, July 2007, Pages 347-356. <http://www.sciencedirect.com/science/article/pii/S0260877406006893&gt;

[x] Frederick, Robert, ed. A companion to business ethics. Vol. 17. Wiley-Blackwell, 2008.

[xi] IKEA. Sales Start of Newly Produced MeatballsIKEA. N.p., 23 Mar. 2013. Web. 7 Apr. 2013. <http://www.ikea.com/gb/en/about_ikea/newsitem/sales_start_meatballs&gt;.

[xii] Ibid.

[xiii] VanGilder, Suzanne. “Manufacturing IKEA Style.” Surface & Panel. N.p., n.d. Web. 07 Apr. 2013. <http://www.surfaceandpanel.com/articles/cool/manufacturing-ikea-style&gt;.

[xiv] IKEA. Sales Start of Newly Produced MeatballsIKEA. N.p., 23 Mar. 2013. Web. 7 Apr. 2013. <http://www.ikea.com/gb/en/about_ikea/newsitem/sales_start_meatballs&gt;.

2 thoughts on “Blue Ribbon Winner: IKEA

  1. Look, if you are going to but ground up meat products from a store that specializes in ground up wood products, do you care if it is horse or cow?

    It is not like horse meat is poisonous….

WHAT DO YOU THINK?

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s