The regulatory breakthrough led by Starbucks

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On October 25, 2017 the new “Shanghai Open coffee-roasting production license review rules” entered into force.

These rules apply to food production licenses for coffee-roasting in open way, which is basically coffee-roasting activity conducted in areas within retail or food-service stores, defined as “…processing way which enables consumers to see the roasted coffee production facilities and production process, meanwhile, there is transparent protective facilities between the non-production area and the production area to prevent entrance of no-production person to the producing area”.

Just a couple of month after, the new famous Starbucks flagship store (Starbucks Reserve Roastery) was open –first ever in China to host a coffee-roasting site within a Starbucks coffee shop. Authorities officially declared that approval of this new regulation has indeed been sparkled by Starbucks opening; a long technical cooperation between Starbucks and FDA has been required in order to agree on the food safety requirements for this regulation.

Main content of this regulation

Analyzing the regulation, it appears that the open-roasting area shall comply with the ordinary requirements for food-production sites. We are therefore really talking about having a factory-degree facility within a restaurant: required equipment includes for instance magnetic screening equipment, raw materials cleaning equipment, roaster with automatic temperature recorder, removal machine able to remove foreign material with density higher than 0.8g /ml, cooling plate, metal detector or X-ray quality detector automatic control able to detect the foreign bodies with diameter ≥ 2mm.

Moreover, production area shall be duly equipped with:

  • Primary and secondary air purification system facilities and equipment are required in the production area;
  • Video-surveillance system to monitor the whole production area and equipment;
  • Equipment for temperature and humidity control.

The feeding-mouth for raw coffee beans shall be at least 45 cm far from the floor, and it shall be covered with special protection. Special protection – to prevent any foreign body – shall also be placed upon the coffee-bean cooling plate.

The two different areas (production and non-production) must be totally separated one from another to avoid cross-contamination risk. For example:

  • Production area and the non-production areas shall be separated with non-interrupted transparent wall not lower than 1.05m;
  • Dressing areas shall be provided at the entrance of production area and equipped with facilities for changing dress, shoes (shoe covers shall be worn inside the production area) and disinfecting facilities. Work clothes shall be placed separately from personal clothing and other articles.
  • At the entrance of the production area, non-manual hand-washing, dry-hand and disinfection facilities should be set up in proportionate amount with the number of production and processing staff.

Why this was required

Coffee-roasting is considered food-production activity.

In general, although there is no clear legal definition for “food production”, the transformation of raw materials/ingredient into a finished food is considered belonging to food production whenever industrial equipment is used.

With specific referral to coffee-roasting, this is one of the various (32) sub-categories of food production licenses provided under Measures for the Administration of Food Production Licensing.

In order to be legally allowed to roast coffee-beans, the entity of the Starbucks Reserve Roastery (i.e. Starbucks (Shanghai) Coffee Co., Ltd/星巴克(上海)咖啡有限公司) has a business scope including –  amongst others: “food production and sale (excluded grains); food addictive production; services and relevant services to restaurant; wholesale, importation and exportation, retail (including online retailing), commission agency (auction is excluded), and providing relevant services and storage service for: foods and relevant materials (grains excluded), coffee manufacturing machine…”.

The existing implementing regulation for coffee-roasting production license has been conceived for production activity conducted in factories, not in areas within restaurants or retail stores. Therefore, without a new regulation tailored on the “open space” way of production, it would have been impossible for Starbucks to obtain such a license.

Why this is a milestone

This is a milestone because it shows how – through communication, commitment and technical effort – Chinese authority can effectively open regulatory doors in order to meet business players requests. As declared by FDA officers, when Starbucks discussed its intention to launch this new project – which merges into one same facility food production, food service and food retail – FDA feared that, due to lack of regulatory grounds, the project would have been unfeasible. Nevertheless, deep commitment from both side, along with one-year long technical discussion, cleared way to this important regulatory and business achievement.

Of course, Starbuck great status in China (where it is a major food player) along with the low-food safety risk in coffee-roasting compared with other food production activities has definitely helped.

However, this shall from one side help existing business which de-facto already host food production in their food-service facilities (think of urban breweries, for instance, which rather often need to rely on duly-licenses third parties) to adjust their business model; on the other side, it may clear the regulatory-way to new creative food business models (totally-automated restaurants, etc…).

Maybe not everybody will be able to afford such full-steam coopearion by FDA, or to meet high-standard industrial production requirements; however, the door in China seems once again – open…

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