For proof of that statement, look no further than the recall of cumin, along with products that contain it, that occurred in the first quarter of this year. The spice was found to contain undeclared peanut proteins, threatening the health, and even life, of those with an allergy to any form of peanut products.
The issue turned out to be responsible for 95 percent of all food recalls in the first quarter of 2015, according to Todd Harris, vice president of recalls with Stericycle, Inc. During that period, the U.S. Food and Drug Administration had more than 19 million food units recalled, a 40-percent increase over the first quarter of 2014.
The other major health crisis for food products in the first quarter was listeria, bacteria found in soil, water, decaying vegetation and even some animals. There were roughly 60 incidents of listeria contamination in all of 2014, Harris says, and 24 in the first quarter of this year alone. One listeria-related apple recall during that period affected some 15.25 million people across the U.S. and Canada, resulting in seven deaths, 13 hospitalizations, three pediatric illnesses, three premature births and one fetal loss, according to the Centers for Disease Control and Prevention.
More recently, listeria showed up in ice cream, frozen yogurt and other products made by Blue Bell Creameries, which has been participating in a voluntary recall of items sold in multiple states. As of early May, there were at least three deaths and 10 hospitalizations attributed to the contamination of Blue Bell products.
Even the smallest incident can have a major effect on the retail and restaurant food supply chain. Harris speaks of “the multiplier effect,” which begins with a single item or raw material, then spreads throughout hundreds of products.
The first-quarter spice recall provides a typical example of that phenomenon. It started with one product, then spread to 14 companies, 100 brands, 153 products and a total of 769 products with different packages. “When the same supplier, ingredient or component is utilized across multiple companies and products, the overall impact of a recall is staggering,” says Stericycle’s Recall Index for the first quarter of 2015.
According to figures from Asthma and Allergy Foundation of America, an estimated 200 people die each year from food allergies. Undeclared allergens, resulting from errors or omissions in product labeling and packaging, account for a big part of those deaths. What’s more, approximately 15 million Americans have some form of food allergy. For producers, retailer and distributors, it’s very much a supply-chain issue.
Food, of course, is only one area of concern when it comes to product recalls. There are roughly two per day in the automotive sector, says Harris. The number of automotive recalls in the first quarter was actually down from 2014, but the incidents were no less serious in their potential impact on consumers. Top causes, according to the Stericycle Recall Index, were faulty airbags, electrical systems, latches and locks, structural issues and steering systems.
The recall of airbags made by the Japanese manufacturer Takata Corp. over the last few months has grown to affect some 34 million vehicles in the U.S., made by 10 automakers. The products are said to be in danger of exploding, causing injury or death to drivers and passengers. As of early June, six fatalities and more than 100 injuries had been attributed to the faulty airbags. Stericycle says airbags were responsible for 41 percent of recalls by the National Highway Traffic Safety Administration in the first quarter.
The category of medical devices has also weathered some serious incidents, with the number of recalled units in the first quarter nearly four times that of the fourth quarter of 2014, Harris says. A single manufacturer’s recalled units amounted to 50 million units. In all, says Stericycle, there were 252 medical-device recalls in the first quarter, up 15 percent from the prior quarter.
Beyond their obvious threat to public safety, recalls are a huge drain on corporations’ profits, and can seriously harm or even destroy a brand. Meanwhile, governments are cracking down on producers. FDA’s Food Safety Modernization Act, signed into law by President Obama in January 2011, was considered the most sweeping reform of food-safety laws in 70 years. It places a strong emphasis on the prevention of food contamination, and producers have been forced to impose expensive new controls in response to the law.
Stericycle says manufacturers must work closely with government officials and industry experts to stay on top of changes in the law. “Proactive enforcement of policies to further validate supplier quality, as well as internal quality procedures, will go a long way in helping manufacturers ensure their products meet all regulatory and brand standards,” it says.
Ensuring supplier quality forms the very heart of a good risk-management program. Harris says companies should become intimately familiar with their vendors, and know exactly what each one is doing. Executives need to develop detailed response plans before issues occur. They’ll have to move quickly to inform regulators and the public, determine exactly where affected product is being made and sold, and shut down supply.
The lack of a plan “can have a lasting effect on the brand for years to come,” says Harris. “And you need to test that plan routinely.”
Sounds good on paper, but the rash of recent incidents suggests that many companies have yet to adopt these basic measures. There’s plenty of work to be done.
Next: How to keep track of product quality in the supply chain.
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