Does BRCGS Grade Affect Buyer Decisions? What Procurement Teams Look For

BRCGS (Brand Reputation through Compliance Global Standards) certification has become a minimum benchmark for all suppliers who would like to enter retail and export supply chains. Of many different certifications that buyers use, BRCGS (Brand Reputation through Compliance Global Standards) is one of the most recognizable within the food industry. With every single BRCGS audit there is always BRCGS Grade, and this BRCGS Grade is one of the first criteria procurement teams consider before approving or continuing to deal with a supplier.

With growing complexity of global supply chains, it is no longer enough for buyers to trust informal relationships and one-time visits to their suppliers in order to ensure their food safety. The grading system becomes the means of comparison for procurement, QA and category managers for hundreds of suppliers at once. The goal of this post is to figure out how important the BRCGS Grade for buyers is and what criteria procurement teams use while evaluating a BRCGS Certified Supplier.

What Is a BRCGS Grade and Why It Matters to Buyers

A BRCGS Grade is the grade awarded to a company after the BRCGS Certification Audit, depending on the number and severity of nonconformities against the BRCGS Global Standard for Food Safety. It represents the consistency of a company in meeting the food safety, quality, and legal requirements and is included in the public or shared audit report available in the BRCGS Directory.

The buyers’ main use of the BRCGS Grade is a simple reference point. In other words, buyers do not have to read an entire audit report but can use the BRCGS Grade as a tool to understand whether this company is reliable or not. This is especially true for buyers who have many suppliers in several product categories, countries, or private label products programs. In this case, it is impossible to read all audit reports manually.

Finally, BRCGS Grade serves buyers as a simple tool to evaluate different suppliers. The fact is that suppliers can be in different countries, operate according to different legislation, and deal with various certification bodies. However, using the BRCGS scheme allows the buying organization to understand that any AA Grade, regardless of the country where it was earned, has the same meaning.

Does BRCGS Grade Affect Buyer and Retailer Purchasing Decisions

Is BRCGS grading a determining factor in purchase decision-making, or is it simply another piece of paper in the supplier’s file? The majority of retailers and suppliers with established 

supplier approval programs will take the BRCGS Grade seriously. While it is almost never the sole determinant, it is always an important element in ranking, monitoring, or even selecting a supplier.

It may not be obvious on an individual purchasing decision, but its importance emerges when one takes a holistic view of the entire lifecycle of a supplier relationship, starting from initial approval to renewal and ongoing retention. In the case of suppliers who have advanced procurement systems, the BRCGS Grade is normally integrated into risk assessments along with other elements like delivery reliability and financial stability.

A BRCGS Grade affects buyer decisions in several concrete ways:

• It directly links to the supplier scorecards of the quality assurance teams at retail organizations.
• It impacts the frequency of audits because those with poor scores are frequently audited more often.
• It is also relevant to the process of bringing in new suppliers, with many retailers having a minimum grade requirement for accepting a new supplier.
• It impacts negotiations around contracts where the buyer’s own retail customers need a minimum BRCGS Grade from the supply chain.

What Procurement Teams Look For in a BRCGS Certified Supplier

Procurement departments seldom just focus on the grade. In most cases, what procurement departments are interested in when looking at BRCGS certified companies goes beyond the grade because the grade is not all that tells you about compliance. Two companies can have the same grade, but be totally different in terms of risk.

• Current grade and trend of grade for the past two or three audit cycles.
• Certification category and scope, to ensure it aligns with the products being purchased.
• Number and nature of non-conformances, with classification into minor, major, and critical non-conformances.
• Timely closure of non-conformances following an audit.
• Type of audit—announced or unannounced. An unannounced audit is generally seen as a more rigorous measure of compliance.
• Validity period of the certification and whether the certificate is active or expired.
• Performance consistency of the facility over past audit cycles, not just the latest one.

Do Buyers Prefer Suppliers With an AA BRCGS Grade

Does the buyer have a preference for the AA grade supplier compared to the others? In most instances, yes, especially if the buyer is comparing two suppliers based on price, capability, and geographical location. The AA grade implies that there is less risk and less due diligence required.

However, the AA grading cannot be the sole determinant. The cost effectiveness, production capability, consistency of deliveries, and buyer’s existing relations matter too, so a supplier with a B grading may get business provided there are no issues on other parameters.

In competitive sectors with many certified suppliers, the AA grade can serve as a tie-breaker instead of the initial screening mechanism. Purchasing agents that are sourcing for private label programs or export markets with rigid retailer standards will pay more attention to the grade than those purchasing in less stringent domestic markets, so the significance of the AA grade depends on the market sector and final consumer demand.

How Important Is a BRCGS Grade When Selecting a Food Supplier

What is the significance of BRCGS grading while choosing a food supplier against the various criteria for choosing suppliers such as cost, capacity, and lead time? In any standard procurement process, the BRCGS Grade works more as a qualifying criterion than as the decisive criterion.

• It is used as a pass/fail barrier prior to any business negotiations taking place.
• After meeting the minimum grading level, other considerations such as price and logistics become relevant in the decision-making process.
• A falling trend in the grade may override an acceptable grade because it indicates that the systems of the supplier to ensure food safety are deteriorating.
• Private label or export customers usually have no choice when it comes to the grade of the product.

If suppliers comprehend this process, they can develop their certification process in accordance with that. Suppliers should not see the audit process as an annual task but treat BRCGS Audit Grades as a commercial asset, because in such a way a supplier will remain within the list of buyers with certification criteria as a prerequisite.

BRCGS Audit Grades and the Supplier Approval Process

The BRCGS Audit Grades usually become part of the official BRCGS Supplier Approval process, employed by procurement and quality departments. In contrast to a certificate which is checked only once, the most common approval processes include re-checking the grade each time it is renewed.

• The new vendors will be reviewed in terms of a minimum grade for inclusion on the approved vendor list.
• Current vendors will be reviewed every audit cycle, and a downgrade of the grade will result in a supplier review meeting.
• Suppliers with multiple sites will be graded individually as the grades are facility based, not company-wide.
• Sometimes, the procurement departments will consider the BRCGS Grade as part of the overall supplier risk profile along with other certifications and audit grades.

Being a food supplier and having Food Supplier Certification at a high grade is more than merely passing an audit. Being a food supplier and having Food Supplier Certification at a high grade is being noticed and competitive in buyer approval systems, which require standardized comparable data to be available from the suppliers. With growing digitalization of scorecards of the buyers, connected with BRCGS Directory, the grade changes take place much faster now than before, and there is little chance of outdated information remaining unnoticed.

How Suppliers Can Strengthen Their BRCGS Grade for Buyer Confidence

Suppliers who want to increase the perception of their buyers need to consider the BRCGS Grade as a performance indicator throughout the year and not just at the time of one annual audit. The better grade is more often the outcome of good practices within the company.

• Identify non-conformities from past audits and close out corrective actions sufficiently before the new audit period commences.
• Conduct periodic internal audits according to the BRCGS checklist to identify deficiencies ahead of time and not after being identified by the certifying agency.
• Ensure that documentation, traceability documents, and HACCP plans are up-to-date all year round to be ready for any audit at any time.
• Train employees constantly on food safety culture as employee behavior is the cause of non-conformities in many cases.
• Inform key customers about grade improvements and closure of corrective actions.

Those suppliers who take the process of maintaining their certifications as an ongoing one rather than a sporadic process of complying with the requirements generally receive consistent marks. This very consistency distinguishes the preferred BRCGS Certified Supplier from the supplier which is just barely passing the requirements of certification.

Key Takeaways

• BRCGS Grade is one of the very first filters that procurement teams apply in the process of evaluating and ranking their suppliers.
• The higher the grade is, especially AA grade, the faster the approval process will be and there won’t be any additional screening for the onboarding process.
• When evaluating potential suppliers, the procurement team takes into account much more than just the BRCGS grade of the organization.
• Usually, BRCGS Grade serves as a qualifying filter but not as a decisive element in the process of choosing suppliers.