Recalls – How Food and Beverage Manufacturers can Avoid this Scary Reality

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As the food supply chain has become more costly and complex, any food safety incident can have a negative impact on public health and ultimately, the economy. In June, the second World Food Safety Day will be celebrated to draw attention and inspire action to help prevent, detect and manage foodborne risks.

Product recalls in the food and beverage industry are a serious issue, and becoming more and more common. In 2019, over 500,000 pounds of pork products were recalled in the US because of being incorrectly inspected. In the same year, other major recalls included:

  • over 100,000 pounds of chicken fried rice products recalled due to contamination
  • 75,000 pounds of salad products recalled because the lettuce was contaminated.

The cost of recalls often runs into millions of dollars with insurance claims averaging US$9 million, excluding the cost of reputational and brand damage.


The new reality in the food and beverage industry

For a long time, the major concerns for food and beverage manufacturers were shelf life, inventory planning and pricing. But the situation has changed in recent years as consumer expectations have focused on issues such as health declarations and warnings, and ingredient transparency. It is now common for a consumer to take a product off the shelf and check the ingredients and expiry date on the label before even considering purchasing the product.

Because of this new reality, food and beverage manufacturers are looking to improved traceability solutions, such as those found in an ERP (Enterprise Resource Planning) software application. An ERP offers the ability to identify and respond to food safety issues quicker and more effectively than before, as well as optimizing the supply chain and reducing inventory which also reduces food wastage.

Manufacturers also have to comply with an increasingly more regulated environment that requires strict compliance with all food safety laws. These laws are now focused on prevention during processing, rather than a reaction to a food incident in the market place. This requires organizations to monitor and regularly report on food safety criteria, to demonstrate that they are complying with legislation in their procurement, production, and supply chain processes.

Food safety and traceability

To meet the requirements of the Food Safety Modernization Act and the Safe Quality Food Standards, businesses must be able to identify and trace every ingredient used in the manufacturing process, from receipt, through storage, processing, packaging, shipping and delivery to the direct customer. They also need to have detailed audit trails of all transactions to show that if necessary, they can implement a recall and recover all of the affected products successfully.

The checklist of food and beverage industry requirements when it comes to traceability includes:

  • Recording of expiry and shelf-life information
  • Track inventory movement across locations
  • Have traceability and quality data on food and packaging materials and products from procurement, stocking, inspection, manufacturing and sales including distribution
  • Maintain a history of traceable items for customer service follow-up
    • Record quality and traceability information on materials received from suppliers
    • Track and report on rejects and wastage, including safe disposal of risky products
    • Report on full or sample inspection of lots on receipt, during production, and prior to shipping
    • Track and quarantine stock which is spoiled expired or does not meet quality standards
    • Meet compliance requirements and standards during R&D and NPD
    • Have a tried and tested recall process with a complete set of process documentation
    • Be able to search backwards and forwards through the production and supply chain by stock code, lot or batch number, and transaction type
    • Archive and be able to extract traceability information for any product for the required period.

It’s no longer possible for a food or beverage manufacturer to continue to do things in the traditional way, as Gorant Chocolatier learned. All information was stored on spreadsheets and handwritten notes which wasted a lot of time and effort when they needed to extract the critical information. By moving to a modern ERP system, Gorant ensured they had an integrated inventory and manufacturing system, and if they were ever faced with a recall they could quickly and easily trace where the finished products went.

Food recalls may be on the rise, but with the correct ERP system offering the required functionality, the organization can ensure regulatory compliance, while mitigating the risk during a recall, and ultimately reducing the potential damage to the organization and brand of a recall. Check that your ERP offers this functionality.

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