A food safety program boosted Belarussian retailer Rubliovsky’s revenues. © Rubliovsky
Dumplings. Potato pancakes. Pork stew. Thanks to the Rubliovsky chain of grocery stores in Belarus, people all over the country have been feasting on these ready-made, fresh, and affordable meals since 2003. Now, a new food safety system guarantees that Rubliovsky meals are also certified according to the most rigorous international safety standards.
It’s not just a question of taste: results of the first year of the food safety program’s implementation at three stores delivered impressive business results. Prepared food revenues in Rubliovsky’s pilot stores grew by 5 percent and the stores averaged cost savings of $10,000 each. Customer complaints and product returns decreased. When the company expanded the pilot to other stores, those locations also experienced growing sales, cost savings, and improved reputation.
“Several years ago, we had many complaints about our products,” said Natalia Shablinskaya, general director of Rubliovsky. “When you have 170,000 customers daily, there is a heavy responsibility to ensure the food is safe.”
So the company decided to tackle the challenge—and the development of a modern food safety management system at Rubliovsky has had an impact beyond the grocery chain itself. Competitors in the region are pressured to keep up or lose business. Suppliers must improve to comply with higher standards at retailers.
Improvements across the food supply chain open new economic opportunities for Eastern Europe and Central Asia, a region with natural resources to become leading producers and exporters of agricultural products, to contribute to greater food security.
Rubliovsky, an IFC client since 2008, is one of the biggest and most dynamic growing retail chains in Belarus. It has over 50 stores in Minsk and 20 others in areas outside the capitol city. The chain has grown thanks to affordable prices, high-quality foods, and a wide range of goods. By design, all stores are situated within walking distance from residential areas, so that elderly people and young families without cars can walk to the market. This “close to home” approach works so well that many people buy Rubliovsky’s popular, ready-to-eat meals on their way home from work.
In 2013, the company embarked on a pilot project with IFC to implement a modern food safety system at three selected stores in Minsk, adopting food safety protocols and systems certified under the internationally recognized FSSC 22000. IFC helped train Rubliovsky management so that they could educate other staff and deepen capacity to implement more stringent food safety procedures and standards.
After the first year, prepared food revenues in the pilot stores grew as those locations averaged significant cost savings, so the company introduced the program to additional stores. These have seen similar positive results. To further control and enhance food safety and quality, the company is now working with IFC on a plan for centralization of prepared food production and further assessment of food safety risks during transportation and storage.
IFC’s third and most recent investment with Rubliovsky’s parent company—a $10 million loan in 2016—demonstrates our commitment to building a foundation for better corporate agribusiness practices. In the past several years, we have also helped the company strengthen its environment and social practices, manage worker and fire safety in a more systematic manner, introduce a functional internal grievance mechanism, and address labor requirements for non-employees.
These results reflect some of IFC’s goals for agribusiness: improve business regulations in the industry, modernize agricultural supply chains, and help retailers like Rubliovsky improve competitiveness, reduce production losses and spoilage, minimize recalls, protect their brand, and build customer trust. It’s a recipe ripe for replication.
To learn more about IFC’s work in food security, visit www.ifc.org/agribusiness
Stay connected: #6DecadesOfExperience
Published in January 2017