FoodSure, the food labelling verification company, says that counting the cost of food product recalls is the stuff of nightmares and that the future reputation of a food company involved in a product recall lies squarely in how well it handles the crisis and, of course, upon how it mitigates against repeat failures in its operational procedures.
Back in the early ‘90s, US fast food chain, Jack in the Box sold hamburgers contaminated with E. coli and soon hundreds of people were sick and four children died. Despite a product recall that recovered around 20% of the contaminated stock, and while the company offered to cover all related medical bills, class action suits ensued and Foodmaker Inc had to fork out tens of millions of dollars in individual pay-outs. It is estimated that the company lost US$160-million and 30% off its stock market value.
In 2007, consumers were warned against buying and eating the popular Peter Pan brand of peanut butter when an apparent outbreak of salmonella had been linked to the product. Manufacturer, ConAgra, then engaged in a rare and massive 100-percent recall of the product. The product had caused more than 600 cases of salmonella but, fortunately, no deaths and ConAgra spent around US$78-million on the recalls [source: Nash]. These funds were spent not only on finding and getting rid of the products, but also on notifying customers and implementing a toll-free hotline for consumers to call. On top of this cost, the company incurred approximately $55 million in lost sales [source: Hughlett].
Closer to home, some other operational gaps have been made evident in two recent cases. One saw Tiger Brands having to recall around 17 000 of its Tastic ‘Simply Delicious’ cooking sauces and rice products after tests found traces of potentially carcinogenic ingredients. Tiger Brands reported it had found traces of the colourants methyl yellow and Sudan 1 in some of the products made between June and July of this year at a factory in India. While the full cost of the recall is unknown, Tiger Brand’s share value took a slight knock at the time.
The jury is still out on retailer Woolworths surrounding three recent food issues. First a dead frog was found in a Woolworths lettuce pack; then a roach was found in a pack of its own-label noodles; and then a live frog was found in a pack of lettuce. Woolworths is claiming sabotage but as MD of FoodSure Amanda Rogaly says: “Whether it’s sabotage or a fault in the food processes used by the retailer, what we still have here are operational gaps and this is where FoodSure can help. While food retailers and manufacturers are doing all they can to comply with necessary food standards, they cannot always be aware of the weaknesses in their operational procedures.”
FoodSure carries out a number of services that are specifically designed to identify and seal operational gaps so that food crises may be averted. The company works with the industry to provide independent testing and evaluation through its accredited lab partners; random testing of products; retailer and manufacturer training and input on label accuracy via hand-picked expert food consultants; in-store and product audits an online label verification platform for customers to check if their label has been tested.
FoodSure is working with Ronel Arnold, a leading consultant in South Africa. “There are some food companies which are very serious about how they operate although in South Africa, we do tend to have a ‘wait and see’ attitude. We’re waiting to see which company will be hit the hardest by a food scare and perhaps not taking enough preventative action now. I think there is commitment from many of the larger companies here to do the right thing but what FoodSure has done is to see what’s needed to close the gaps and I am proud to be working with the first company in this country that is putting proper measures in place – across the entire food industry spectrum – in order to meet that requirement.”
FoodSure’s Rogaly adds: “We provide a real double check system and give the food industry peace of mind. FoodSure is also a form of self-regulation so that everyone in the food supply chain is compliant. This ‘compliance’ can, in turn, be conveyed to the consumer so that the implicit trust in food and retail brands may be upheld and not compromised.”
FoodSure is the food label verification company that provides independent checks and balances for retailers and manufacturers to reduce the risk associated with non-compliance. Companies can reduce the potential consequences of reputational damage through more robust quality and safety measures. FoodSure closes the operational gaps in quality and safety management, so that retailers and manufacturers are confident in the products they put on shelf and consumers are confident in what they buy.