No food or drink manufacturer worth its salt ever wants to see its products subjected to a recall, whatever the cause might be.
Yet the issue is becoming more acute due to tightening legislation driving tighter controls and additional processes, but also because of the competitive pressures placed on global supply chains, which are becoming increasingly complex.
This means contaminated products can spread worldwide rapidly before a problem is identified.
Any recall then becomes a very costly exercise for the manufacturer involved – not only from a financial point of view, but also from the reputational damage that such an incident can cause.
The direct costs of removing and collecting the product from the market, along with storage, disposal and the necessary PR response can be substantial. However, the potential indirect costs associated with loss of reputation, cancellation or the reduction of existing contracts or orders is much harder to determine. One estimate based on the feedback from product recall insurers Lockton suggests 80% of the total cost of a recall is attributed to these indirect costs.
The Food Standards Agency recorded 71 recalls and withdrawals in the year from October 2018 to September 2019, plus a further 125 allergy-related recalls in the same period. These compare with 65 and 98 respectively in the previous comparable period. In one instance during 2018, a listeria recall cost a frozen food firm over £4m in total outlay and resulted in the company going from a profit of over £5m in 2018 to a net loss in 2019, so the impact can prove devastating.
The main issues contributing to a recall include biological contamination, resulting from contaminated water or food handling techniques, the inclusion of potentially harmful allergens through poor ingredient control or cross-contamination, and the inclusion of undetected foreign objects, such as plastics or metal.
So how can a food or drink manufacturer best protect itself from the damaging impacts, both financially and reputationally, of a recall?
Simon Noakes, small and medium business director at Columbus A/S, reckons that companies need to embrace a complete ‘field to fork’ traceability approach with a focus on prevention rather than cure. The initial starting point, he says, should be a risk assessment of the various stages in the supply chain process to understand where the prime focus is needed, based on levels of risk and occurrence. “Initially, the focus should be on what processes and steps are needed to reduce levels of risk. Simply throwing money at systems will not help if there isn’t sufficient clarity on what needs to be done and how.”
A food or drink manufacturer’s traceability system should be robust and include quality assessments and collation of data for supplies, ingredients and materials, with the ability to track and validate from production through delivery, storage, processing, distribution and consumption, he explains.
So, to avoid a recall, food manufacturers should:
• conduct a risk assessment across the supply chain processes to identify key focus areas, rather than adopting a ‘scatter gun’ approach. This ensures that they do not invest time and cost in areas that yield less value;
• from a prevention perspective, introduce internal controls, records of which can be digitised to enable wider transparency;
• ensure all relevant test equipment is checked and calibrated regularly to ensure accuracy;
• ensure robust segmentation and detection controls are in place across relevant processes;
• simplify and standardise checking procedures to ensure they are adhered to and owned;
• review the implementation of proactive measures for key equipment to avoid possible contamination of foreign bodies rather than relying on the pure auditing or detection approach;
• and ensure the capture of relevant documentation, including test procedures and labelling across the whole supply chain, with transparency to enable quick and easy validation.
A question of trust
“Today’s consumers have to trust the food they are eating is safe and rely on food producers to deliver that trust,” says Noakes. “Even when robust quality standards are in place, errors can occur, and it is the impact of those errors that needs to be tightly managed to maintain that trust.”
This could arise from a specific ingredient quality concern or an issue in the production process, such as possible contamination for a specified period of time or associated with specified batches.
“By being able to pinpoint the product lots affected and track those both internally or externally to determine where they are, the scope – and hence cost – of any disposal or recall can be minimised and dealt with quickly, potentially even before the product enters the wider supply chain, thus protecting both the consumer and the brand,” says Noakes.
In general, improving lot traceability will help producers to provide more robust systems to manage products in the supply chain when issues occur, enabling a faster, more efficient approach, minimising cost and reputational damage. “There is no substitute for prevention, but when errors do occur, an effective traceability solution will reduce the impact,” he adds.
However, he emphasises that an effective control or tracking system is key to preventing instances occurring, identifying the source and location of affected products and managing any returns. And this is where the appropriate technology can have a significant impact on the effectiveness of a food or drink manufacturer’s track or trace system.
Columbus A/S offers several solutions to food and drink manufacturers keen to implement a robust track and trace system across their supply chains, including serialised box and lot tracking. To find out more, click here.
For more insight on recall, track and trace, click on the link and register today for the Columbus-sponsored webinar, Product recalls: prevention and cost management, held on 17 March at 3pm GMT on this website.