Recipes - Beverage Industry
If you go online and Google, “cost of a food recall,” you get a canned response of, “The average cost of a recall to a food company is $10 Million in direct costs, in addition to brand damage and lost sales” according to a joint industry study by the Food Marketing Institute and the Grocery Manufacturers Association.
What does that impact look like in a real-life scenario?
Paul Kruse, CEO and President of Blue Bell Creameries knows all too well. He informed investors last year that the company needed $125 Million or it would close, four years after a Listeria outbreak that made national headlines. The outbreak, linked to ten illnesses and three deaths, cost Blue Bell $255.2 Million from 2014 to 2017. Ouch!
A recall can deeply affect a company financially in the immediate aftermath, but there is a sinister long-term financial problem associated with a recall. Immediately after a recall, a company will likely face a dramatic loss of direct sales, the costs of FDA and USDA compliance penalties, possible lawsuits and litigations, and insurance impacts. These costs, while extremely high, can be survivable. I would argue that the hardest issue can continue to plague a company long after the publicity of the recall fades from the headlines.
That issue is brand tarnishment and deterioration.
A company’s brand is its badge of quality and purity. The general consumer makes certain assumptions when it comes to purchasing and eating food. First and foremost is that all food is safe to eat until told otherwise. Even if the company can sustain the immediate astronomical costs of a recall, the loss of consumer confidence in the brand can ultimately destroy a company. The brutal truth about a recall is that a single outbreak can be the ‘kiss of death’ to a manufacturer.
What is the takeaway from this story? How can the devastating costs of an outbreak be prevented?
A program of rigorous, routine aseptic sampling may seem like a luxury item to some producers, but it can serve as a company’s first line of defense against the ravaging effects of a recall. Strategically placed samplers can detect bacteria early on and catch outbreaks before products leave the plant and are placed on retail shelves.
Is rigorous, routine sampling worth the expense? Given the costs of a food recall, perhaps a better question is, can you afford not to do rigorous, routine sampling?
As this busy year ends, my shoulders can finally start to relax. It’s a very natural time to reflect on the year’s activities and look ahead to 2020.
For me personally, the year encompassed completing my MBA in May, followed shortly thereafter with my wedding in June. With no time for a deep breath, I then moved to Norway, complete with its own set of work and visa related technicalities and set up an international office in my new hometown of Stavanger.
This was the first time in the 35 years that QualiTru has led a concentrated effort in building our international presence. We brought on new partners in Italy, Belgium, Germany, Denmark, Poland and solidified collaboration in the Netherlands, Belgium, Ireland, Japan, Australia and Canada.
Additionally, we participated in studies for line sampling for US and Argentinian farms, supported the development of international sampling guidelines and truck sampling trials in Ireland. It was a very productive year.
While these efforts are certainly worth celebrating, the biggest accomplishment for me was developing the comfort in humility and drive to ask for help.
As a small, family business that fills a niche in the food safety industry, it is no simple task to find partners that are driven by the same values. Then add in the cultural dimensions and regionally unique regulatory requirements of the international market.
There is no way we would have connected with our new partners without asking for constant feedback and referrals. I have been humbled by the support we’ve received from new partners seeking to develop new port configurations to support expanding our presence in new markets. I am also thankful to our internal team back in the US for their support in taking tariff and international shipping courses.
One of the year’s surprises has been how small the European network is. We have Scandinavian distributors sharing colleagues contact information for new regions to represent and engineering companies making introductions to new networks. A simple question leads to multiple introductions and new sampling applications.
Looking ahead to next year, there are another five regions where we hope to make new connections. Luckily, we now have a strong network and an internal team that is expanding its skills. At this time next year, it is hard to know what the biggest accomplishments will be, but we can be confident that we are asking the right questions with some great partners.
The first year of a concerted effort in the international market has been a growing and learning experience. The support of partners has made my work a real blessing and confirms that the company I represent is really making a positive impact.
Any given company can head to the Internet and read a plethora of articles about how to create a food quality culture. The Food Safety Moderation Act (FSMA) has laid the groundwork in sterile detail about what the Food and Drug Administration (FDA) requires from a fundamental standpoint. Tier one quality systems like Safe Quality Food (SQF) provide an organization a checklist of tasks which, if followed, will protect the company and consumers from physical adulteration and defend production procedures or processes. Validation and verification track and trace activities create a log, which in the event of an outbreak can be traced back to a specific action. But the question remains. What elements create a true quality culture?
Dairy farms and beverage companies understand that the number one contributor to production issues is the humans doing the tasks. A task can be an impersonal checked box on a clipboard, but a practical understanding of what the work represents is the key to changing a culture. Employees who have a list of tasks are prone to have an increased tendency to error, but when tasks are coupled with a genuine belief in the safety and the protection of consumers, the employees become advocates. In a short time, employee advocates become empowered front-line defenders of the company and public.
Investing in the development of the newly minted employee advocates is the road to excellence for a food producer or manufacturer. Farm and food processing employees see disconnects that may be oblivious to upper management. They are the eyes and ears of the production process on a granular level and have insights that may save the company from a recall in the future. A task driven employee will take a sample from silo via an un-sanitized petcock. An empowered employee advocate will recommend installing an aseptic access point to avoid possibly contaminating the product.
When you empower and train your staff to make quality-related decisions based on macro-level thinking and understanding, you can genuinely say that you have a quality culture where everyone wins.