Product recalls have cost billions over the last five years, spanning over many sectors, not only unique to the food and beverage industry. Alarmingly, it is more than just bad luck. Industry reports show record spikes of food and product recalls, highlighting the problem is likely a result of poor training, poor control, a lack of accountability, or worse — a subpar organisational safety culture.
A product recall is possibly the most risk-laden situation a company can face. Whether you’re in manufacturing, retailing or wholesaling, the risk is increasing as supply chains grow more complex and the regulatory landscape becomes more robust. With this, scrutiny continues to escalate with the rising influence of social media, and then there are the awful and malicious product tampering incidents posing an increasing threat to product safety recalls. Yet businesses can often underestimate the impact of a product safety recall and the irreparable damage it can have to a company’s reputation and financial loss. Below we list five major signs a business may struggle in a product safety recall in the food and beverage industry.
Failing to keep foods at the correct temperature
A recent report still finds that food businesses are failing in managing basic temperature controls. Storing, moving or displaying foods at unsafe temperatures can encourage pathogens already present in some foods to grow, with potentially deadly consequences. This results in major penalties and product recall.
Cross-contamination can introduce pathogens like salmonella and E. coli onto ready-to-eat products or undeclared allergens like nuts or shellfish. This can lead to diseases such as the recent coronavirus outbreak in Australia. Many businesses have been fined thousands of dollars for storing, moving or displaying raw meat, poultry, seafood or eggs alongside ready-to-eat foods. This can be easily avoided with correct barrier proofing, storage controls, adequate cleaning and training.
The consequences of mislabelling food can be fatal. Recently, a child in Australia had an anaphylactic reaction after consuming a drink that was wrongly labelled “dairy-free”. Incorrect food labels can impact the accuracy of expiry dates too as these foods can have increased pathogens or can form toxins, rendering it unsafe to eat, all incidents involving severe penalties not limited to recalls.
Failing to remove pests
Major penalties have been handed to food businesses for failing to take reasonable measures to eradicate pests from their facilities. Pests can get into food packaging to contaminate equipment. Rats and mice can transmit bacterial diseases, like salmonellosis and leptospirosis, and cockroaches can transmit gastroenteritis and hepatitis A.
Lack of prevention and planning
Taking a proactive approach is the best way to be prepared to mitigate against any recall loss.It is vital never to underestimate the value of good risk management practices aimed at preventing or minimising product safety recalls. Industry experts say being prepared for a recall involves a number of steps. Companies should have a system in place that actively monitors for potential problems. They also should take time to establish a framework for making a recall decision, determining the principles they will follow and appropriate regulatory requirements. Next, they should have a plan for executing a recall of inventory stock if it becomes necessary.
What can be done?
Companies that plan to mitigate product recall risks have processes and systems in place that can clearly understand their inventory stock by having product traceability systems, as well as knowing where their inventory stock is being shipped. This means if a recall is on the agenda, they can do a very focused and effective recall, compared to companies that have very little or manual processes in place, that ultimately end up recalling everything incurring greater losses.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.