What’s driving changes in Costco audit requirements—and how processors should respond, by Maggie Smith

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Automobile manufacturers change the look of their respective models to keep up with either trends, government mandates or new technologies. The changes are either well-received, such as those by Toyota, or the model tends to fade away quietly (see: Ford Edsel). It’s the same with food brands when it comes to updating audit requirements—although those tend not to fade away.

Costco Wholesale is the latest brand to update audit requirements. The changes include the timing of the audit, the audit type, and updates or new inclusions to the audit requirements. Processors should familiarize themselves with the published documents and seek to ensure all Costco-producing sites within their companies are on the same page with regard to documentation and, especially, scheduling.

A Costco addendum has long been conducted in conjunction with a GFSI audit. The warehouse club now requires all audits to be unannounced. This can be achieved in a couple of ways; the site can opt for an unannounced GFSI audit every year, and a Costco addendum will be conducted in conjunction with this audit; or if it has an announced GFSI audit, the site will be required to have an unannounced one-day  Costco Food Safety Audit within 45 days before or after the audit anniversary date.

The Costco Food Safety & Quality Audit Expectations requirements went into effect April 1; those for the addendum go live May 1. Sites with an audit or addendum scheduled before April 1 are grandfathered in for the rest of 2023 and audits will be undertaken in the same manner as prior audits. Those who qualify as small suppliers are exempt from these requirements. Audits, or the addendum if the site has an unannounced GFSI audit, are required annually. A site may provide blackout dates for non-production days only for the Costco Food Safety Audit.

Costco requires all finished products to pass through an X-ray, except whole-muscle meat and packaging products. The site will need to maintain good manufacturing practices and prerequisite programs to mitigate foreign material contamination. X-rays and metal detection devices must have a rejection mechanism that segregates suspect products. These must be physically controlled and access-restricted until evaluation by designated personnel is completed.

Sites must conduct two traceability exercises annually, completing each within two hours for 100% effectiveness. One exercise must test raw materials/ingredients and the other must test primary packaging. During the audit, the auditor will also have the site conduct a traceability exercise.

Sites producing high-risk, ready-to-eat products are subject to, and required to conduct, environmental  testing per the Costco “Finished Goods Microbial Test and Hold Program.” If pathogen testing (product contact, zone 1) is conducted, the sites shall operate under a positive release program. A documented finished goods microbiological test and hold program is also required. This applies to high-risk items and Kirkland signature products where pathogens are listed in the specification.

Whole muscle dog treats and all styles of imported dog treats shall be irradiated.  Exceptions are made for products that are extruded, chopped, formed and cooked to the appropriate temperature under a verified preventive measures plan.

Costco continues its “no bare hands” policy and includes requirements for gloves including verification documentation of usage. Sanitation effectiveness shall not rely solely on visual checks for verification. Other changes (verbiage or requirements) include general audit requirements, re-audit criteria, critical findings, CAPAs (corrective action/preventative action), HACCP/Preventive Controls, supplier approval program, allergen control, and fresh and frozen ground meat requirements.

Costco anticipates the addendum will take one to two hours when part of an unannounced GFSI audit, with the time spent 50:50 between the processing environment and documentation. The cost of the addendum will be at the discretion of the certification body. The addendum will be a separate document from the GFSI audit and will have no bearing on the score. If the site fails a GFSI audit, it will be considered to have not complied with Costco requirements.

While this article provides a brief glimpse into the updated expectations, more details for Costco requirements can be found in the full document, “Food Safety & Quality Expectations for Costco Suppliers (Version 2.0, effective April 1, 2023).”

For more information on these requirements as well as additional requirements and checklists, contact your certification body or your Costco representative. However, the certification body should send the above-mentioned document, the additional Costco requirements, and the self-assessment tool to the site before the audit.

2023 comes with changes to some of the GFSI schemes as well as to some customer audit expectations. Read carefully and ensure you understand the requirements and expectations. If you have questions, ask your CB or the customer. Good luck, and wishing you a successful audit year!

Maggie R. Smith, MS, is founder and owner of Viand Group, LLC.