By Linda Bryan
Chief Executive Officer
The number of food recalls over the past few weeks makes me wonder if March Madness might have missed the basketball court and landed right in the middle of the food industry.
This month, Bumble Bee voluntarily recalled some of its canned tuna products. Nestle USA did so as well for certain Digiorno Pizza, Stouffer Lasagna and Lean Cuisine items, and a California nut provider recalled pistachios after some products were linked to a salmonella outbreak.
Alarmingly, the list goes on. In fact, the increasing number of food recalls in the United States has become a virtual crisis for the food industry. According to the FDA, roughly 48 million Americans get sick every year from some form of food-borne illness, and 3,000 people actually die from it annually.
The problem seems to be getting much worse. According to a 2015 study by Associate Professor Robert Scharff at The Ohio State University, the total cost of food-borne illness nationwide could now be as high as $93.3 billion, up from $77.7 billion in 2012—an increase of nearly 19% over what it was three years ago.
How much will a food recall cost my company?
No one really knows for certain how many people get sick from food-borne pathogens—the number of misdiagnosed cases could make the figure much higher—and no one knows for sure how much a recall will actually cost a company either. But it’s a question every food company should ask.
A joint study by the Food Marketing Institute and the Grocery Manufacturers’ Association estimates the average cost of a food recall to a food company is around $10 million.
It’s a huge amount of money for any enterprise, but when you’re a small- to mid-sized food processor, a $10 million hit could literally put you out of business overnight. And even if your own food-quality standards are spotless, you’re still at risk because a food recall that involves one of your suppliers also involves you.
That’s why it’s critical for smaller companies to have a clear traceability system in place. Without traceability, there is just no way to keep the recall within its proper scope, which is the most important thing you can do to contain costs.
If you’re a small- or mid-sized food-processing firm, the question is not whether you should or shouldn’t have a clearly defined traceability system in place. The real question is how to lower the costs and maximize the benefits a customized traceability solution can offer.
Traceability isn’t a one-size-fits-all scenario. Neither are the harmful consequences of a food recall when the right traceability system is in place.