Product Recall and its Types

Product recalls are inevitable reality of working in food industry which can be frightening for both food processers as well as for consumers due to the harm and fear they cause among them. People generally focus on its negative side only, but they are very essential and must happen regularly as they can prevent serious damages to the consumer’s health. Recently, a very well-known potato chips brand had to voluntarily pulled out its product from western market due to presence of undeclared milk allergen in it. Due to huge spike in the number of cases of food product recalls presents devasting effect on the image of food industry. But the good news is that there are measures available for food industries, which can apply for reducing/preventing its number.

  1. Definition

Food recall is essential component of national food control system that is used for the management of risks in response to food safety events and emergencies. Product Recall is action of removing food products from the market at any stage of the food chain which may pose a safety risk to consumers. A food recall may be initiated because of a report or complaint from a variety of sources − manufacturers, wholesalers, retailers, government agencies and consumers. It may also occur as a result of a food business’s internal testing and/or auditing. Recalls are conducted by food businesses for protecting their consumers from any kind of severe health consequences like injury, illness or even death.

  1. Reasons of Product Recall

Food recalls may happen for many reasons, including but not limited to:

  1. Discovery of pathogenic organisms, including bacteria such as Salmonella or parasites such as Cyclospora.
  2. Discovery of objectionable foreign objects such as broken piece of glass, metal, or plastic.
  3. Discovery of a major allergen that does not appear on the product label.
  4. Discovery of a harmful chemical compound which is either not allowed to be used in food products or is present in the concentration higher than its acceptable limits. Example: MSG, pesticide residues, antibiotics etc.

 

  1. Types of Recall

3.1. Trade Level Recall

A trade recall is conducted when the food has not been sold directly to consumers. It involves recovery of the product from distribution centers and wholesalers. It may also involve recovery of product from hospitals, restaurants, and other catering establishments.

3.2. Consumer Level Recall

A consumer recall is the most extensive type of recall. It involves recovery of the food product from all points in the production and distribution chain including recovery of product in the possession of consumers.

  1. Food withdrawal Vs Product Recall

Many professionals often use the term food withdrawal and product recall interchangeably, but there is a huge difference between them. Withdrawal of food product from the market is the action of removing food from the supply chain where there is no public health and safety issue associated with it. A withdrawal may occur in two circumstances:

  • when the food product has a quality defect (e.g., color or texture), is underweight or has labelling irregularities that do not pose a potential risk to public health and safety.
  • as a precaution, pending further investigation of a potential public health and safety risk. However, if a risk to public health and safety is established, the food must be recalled.
  1. Risk Associated with Product Recall

5.1. Increase in Direct Costs for Company:

The direct costs of the actual recall generally include:

  • Notifying retailers and regulatory bodies
  • Pulling products, also known as reverse logistics
  • Storing and disposing of contaminated or mislabeled products
  • Any additional labor needed to carry out these tasks and investigate the source of the problem.

5.2. Lost Sales:

Any recalled products a manufacturer has to pull from shelves represent lost revenue opportunities. Retailers might shut off entire SKUs if manufacturers are not yet sure which batches are impacted, which could mean extra and unnecessary lost sales opportunities. And if the manufacturer shuts down production, regardless of whether it’s voluntarily or by mandate, the shutdown leads to still more missed revenue opportunities.

5.3. Damage to Brand Name:

Product Recall can damage a brand or company’s reputation and level of trust in the eyes of consumers. If a manufacturer is fully transparent and proactive about handling the recall, that can minimize the damage.

At first instance food recalls are seen as public health issue, but they are also responsible for significant economic issues also. According to findings of one reputed survey, the average cost of a recall to a food company is around $10M for direct costs, in addition to brand damage and lost sales. However, the costs for larger brands may be significantly higher based on the preliminary recall costs reported by firms of some recent recalls. Thus, it can be one of the biggest threat to profitability if not managed properly.

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