The FDA has consistently fallen short of its FSMA inspection goals since 2018, resulting in a significant number of high-risk food facilities – approximately 26% – going uninspected for three consecutive years, as revealed in a 2025 federal evaluation.
This inspection shortfall has far-reaching implications for food manufacturers, particularly those that supply major retailers like Walmart and Costco, which impose their own annual audit requirements, separate from FDA inspections, that directly impact a supplier’s revenue stream.
Retailers Drive the Audit Process
In contrast to the FDA, which reaches about one in seven food facilities a year, retailers such as Walmart and Costco dictate the terms of annual audits, emphasizing that FDA or USDA inspections do not satisfy this requirement, as explicitly stated by Walmart. For plants selling into major retail, the customer audit is the one that recurs every year, and it’s linked directly to revenue.
Audit Readiness as a Revenue Factor
Given the direct link between customer audits and revenue, audit readiness is now a continuous process requiring dedicated oversight, ongoing evidence collection, and proactive management of corrective actions.
A failed customer audit can have severe repercussions, including loss of business and vendor deactivation, with retailers like Costco expecting the re-audit done inside 60 days of the first one and Walmart noting that failing to keep an annual, approved audit “may result in loss of business and deactivation of your vendor number.”
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In 2023, 22,414 domestic food facilities were due for FDA inspection, yet only 7,590 received inspections, highlighting the significant gap in regulatory oversight.
Congress is weighing a bigger role for private audits.
Utilizing Audits for Sales Growth
Retail buyers tie every supplying site to a current, approved audit, with the audit history following the supplier into every sales pitch, whether for a new item, region, or first listing, and quality teams from other brands also request this paperwork.
A multiyear record of clean audits, closed corrective actions, and successful unannounced visits provides buyers with fewer reasons to hesitate, making this record as valuable as a reference account, which took years to establish and can be jeopardized by a single failed visit.
Maintaining Audit Readiness
To stay audit-ready, designate a single owner for the customer audit calendar, incorporating every major customer’s audit cycle and status, and choose someone with the authority to allocate resources when needed.
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Build an evidence pack for each top customer, starting with what that customer’s auditor asked for last time, such as sanitation records, environmental monitoring results, supplier approvals, allergen controls, and training sign-offs. Refresh it monthly so an unannounced visit becomes a retrieval job.
Maintain a standing corrective action log, recording every finding from customer audits, internal audits, and regulatory visits with an owner, root cause, fix, and verification date, allowing for swift reporting when a 24-hour notice is given.
Conduct a quarterly mock audit against your biggest buyer’s checklist, scoring it as the auditor would, to ensure compliance with the certification standard and the buyer’s addendum or GMP checklist.
Audit Readiness Strategies for Retail Suppliers
Retailers like Costco conduct unannounced audits with strict timelines, such as a 24-hour notice and a 60-day re-audit window. This requires continuous readiness, as corrective actions may involve capital repairs, revalidated procedures, or retraining. By centralizing audit cycles, schemes, and statuses on a single calendar, facilities can prioritize resources and respond swiftly to findings.
Most audit-reviewed data is already in the plant’s systems or spreadsheets, including temperature logs, sanitation verifications, and supplier certificates, which can be continuously monitored to flag missed checks or expiring certificates.
