The Five Biggest Mistakes a Company Can Make in a Food Recall

Food recalls are more common than most people realize. But for good reason—most aren’t widely publicized, because the food products involved do not pose a threat to public health. Nevertheless, as recent notorious recalls of romaine lettuce and peanuts can only remind us, contaminated and defective food products do regularly enter the market with the potential to cause serious adverse effects. When this happens, food companies, working closely with U.S. federal regulatory agencies, must take steps to ensure that consumers are safe.

That’s why a food recall—removing a product from distributor inventories, grocery shelves and home kitchens —is the most effective means for protecting the public. While this process can, and often does, minimize the harm done to consumers, a recall is an unfortunate last resort for a food safety management system (FSMS) that has broken down. Food recalls inevitably impact business negatively—sometimes minimally, sometimes significantly—most often because of financial setbacks due to lawsuits, product waste, and decreased sales, as well as a damaged brand reputation.

In our three-part series about food recalls, we’ll take a close look at the ways they negatively affect the food industry, as well as best practices for responding to them—and better yet, preventing them in the first place. In this post, we provide a general overview of who and what is involved.

Phase 1: First Alert

A food recall occurs when there is good reason to believe that a food product released into the supply chain is likely to cause an outbreak of foodborne illness. Most often, manufacturers, suppliers, and distributors recall problematic products voluntarily, while at other times, a government agency raises concerns of its own.

The Food and Drug Administration (FDA) oversees recalls involving all food products except for poultry, meat and certain egg products, which are handled by the U.S. Department of Agriculture (USDA). In every case, the FDA and USDA work together with the Centers for Disease Control and Prevention (CDC) and the Food Safety and Inspection Service (FSIS) to help the liable companies implement the recall.

The FDA and USDA first hear about a problematic food product in several ways:

• A company discovers a food safety issue and contacts the agency directly.
• Inspection of a facility by the FDA or FSIS reveals a potential cause for recall.
• A food product fails tests carried out through the FDA or FSIS sampling programs.
• In the case of illness associated with a specific geographic location, individual state health departments contact CDC, which in turn contacts the FDA or FSIS.

Phase 2: Recall Classification

The major causes of food recalls are contamination, adulteration, and misbranding:

• Detection of a pathogen, such as salmonella or E. coli, within the product
• Detection of an allergen, such as nuts, often introduced by multi-purpose processing equipment
• Discovery of foreign materials such as glass, metal, uneviscerated fish, or undeclared sulfites
• The accidental omission of a potential allergen from the packaging label’s list of ingredients (the leading cause of recalls since the Food Allergen Labeling and Consumer Protection Act went into effect in 2004).

Once a manufacturer, supplier, or distributor initiates a food recall for any one of these reasons, either the FDA or the FSIS evaluates the severity of the recall and ensures that all reasonable efforts to remove or correct the problem are effectively handled by the responsible parties.

Recalls are classified according to the following system:

• Class I: Indicates a reasonable probability that consuming the food will cause health problems or death
• Class II: Indicates a remote probability of adverse health consequences
• Class III: Indicates no probability of adverse health consequences, although the food product violates FDA labeling or manufacturing laws

Of the nearly 3,000 food recalls reported by the FDA in 2017, 16.5% were Class I.

Phase 3: Notifying the Public

The FDA seeks publicity about a recall only when the agency believes the public must be alerted to a serious hazard. The news media is the most effective way to reach large populations, usually via press conferences and press releases.

The FDA also posts updates to its website daily, which is the most reliable and timely method of notification. Although not all recalls are announced in the media, each one must be recorded into the FDA weekly Enforcement Report. This document lists each recall according to classification, with the specific action taken by the recalling firm.

The number of food recalls in the U.S. from 2013 to 2018. Source: https://www.statista.com/chart/16735/the-total-number-of-food-recalls-in-the-us/

Phase 4: Disposal and Effectiveness Checks

The final phase of the recall process begins with removing the contaminated food products from the supply chain and disposing of them. If a product is recalled while it's still stored in company warehouses, this phase is easier to implement, but if it’s already been delivered to thousands of stores across the country, the recalling company must pay the costs for each of those products to be disposed of, replaced, and — if necessary — shipped back to them.

The FDA or the FSIS evaluates whether the company has made all reasonable efforts to remove a product. In the event that the responsible company does not respond to agency requests for recall, the FDA can initiate legal action. Under the Food Safety Modernization Act (FSMA), federal agents now have the power to shut down operations at food production facilities posing a significant threat to public health. The FDA exercised this authority for the first time in 2012, when it shuttered the Sunland, Inc. peanut-processing facility in New Mexico.

A recall is considered complete only after all of the company's corrective actions are reviewed by FDA or FSIS and deemed appropriate. Once a reasonably expected amount of the offending food product has been recovered, the product can be classified as safe. The acting agency then sends written notification to the recalling company that the recall has ended.

How well do recalls work?

A 2004 report by the U.S. Government Accountability Office declared, "the USDA and the FDA do not know how promptly and completely the recalling companies and their distributors and other customers are carrying out recalls, and neither agency is using its data systems to effectively track and manage its recall programs."

Although new digital technologies have been developed in the last 15 years to better track products through the supply chain from raw materials to consumers, many small manufacturers and distributors have not yet adopted them. For this reason, public notification, rather than traceability, still remains the most effective method to help contain the purchase of recalled foods.

One innovative notification method takes advantage of supermarket chain loyalty cards. For example, Costco, Ralphs, Sam's Club, and Walmart all use their marketing databases to send out notices of any recalled products sold in stores. Whether the loyalty program targets customers based on their actual tracked purchase history or issues general notifications globally to the entire database is another matter. Though a general notification may be better than none, with the increase in recalls we’ve seen recently, consumers could suffer from information fatigue and ignore the notifications altogether.

Or worse—the loyalty program could backfire. In 2014, customers brought a class-action lawsuit against Safeway for the company's failure to notify them of recalled foods through its system. Which only goes to show that recalls are always better prevented than responded to after they occur. In our next post, we’ll go into more detail about how seriously food recalls can, and do indeed, damage company profits and reputation.

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