By Duncan Moir, senior principal product manager at Epicor.
In the last ten years or so, the world has become more health and safety conscious with much greater focus on the nutritional and allergen content of our food. As a result, legislation on traceability and product labelling has become more complex and onerous.
There are lots of European Union (EU) regulations related to food hygiene, production and labelling, however, the key one, 178/2002—General Food Law Regulation, governs food imports and exports, safety, traceability, labelling, and product withdrawals and recalls. The UK is expected to continue to adopt this regulation after Brexit too.
All suppliers must now be able to identify and document information on materials and products one step forward and one step back in the food chain. In addition, the BRC Global Standard for Food Safety states that full traceability must be achievable in four hours.
Failure to comply with these regulations can have a drastic effect on food producers, not only in the risk to human life, but also to the ongoing viability of their businesses. For these reasons traceability and compliance are top of the agenda in the boardrooms of all food businesses.
A recall can result in fines from the supermarkets, a reduction in revenues, damage to reputation, and potential exclusion from future range reviews. Most food producers operate on low margins so any recall and replacement can result in significant losses or even the failure of the business.
In 1990 Perrier was the dominant brand in the bottled water market when a contaminated product was recalled. It was withdrawn for four months and over the next three years Perrier saw sales drop by 50 percent and they lost £70 million. They have never regained their market share.
In 2006 Cadbury-Schweppes recalled a million chocolate bars due to suspected salmonella poisoning at a cost of £20 million pounds and saw a drop in chocolate sales of 14 percent. While the initial costs were high the management of the recall was dealt with swiftly and openly stating the extent of the recall and the small percentage of product impacted. As a result there was no long term impact on the business.
You only have to look at the UK government website food.gov.uk to see that the volume of food and allergen related recalls shows no sign of reducing. 51 recalls have been made since the beginning of April 2018 and over 88 percent of those were due to food safety, allergen and labelling issues. It is almost certain that food producers will face a recall at some point due to circumstances that may be beyond their control, so it is vital that they are prepared.
Six steps food producers can take to reduce these risks
- Being more involved with suppliers is key to understanding the risks involved in materials purchased. This will become more important should Britain be excluded from the Rapid Alert Systems (RAPEX and RASFF) following its exit from the European Union.
- Quality check throughout a process to pick up on any out of specification materials from goods-in to despatch, before they affect a customer.
- Bar code all materials and products and capture all material movements in real time through bar code scanning. Tracking material movements also enables any cross-contamination issues to be easily identified and is vital to accurate traceability.
- Make traceability a part of the standard automated processes and remove the need for paper-based recording or separate tracking. This will remove any re-keying errors and will ensure that traceability information is accurate and can be accessed quickly.
- Simulate recalls regularly to test the process and readiness.
- Perform regular audits in addition to those imposed by customers and other agencies. It is always better for you to find issues before they do. It generates confidence in your abilities as a good supplier.
The key to successfully navigating a product recall is in the implementation of robust standard procedures. These need to be supported by fully integrated computer systems which minimise the cost of capturing traceability information and can provide the ability to pinpoint those impacted by the problem in seconds.
The earlier a problem is identified, the faster it can be acted on to minimise the risk to life and the impact on reputation.
While complying with traceability legislation is important, it is only one part of a food producers' business. Embracing traceability as an integral part of business process will remove significant risk and support the running of a profitable business.
Epicor Tropos is an ERP system specifically designed for the process industry. It has quality management and traceability functionality embedded in all purchasing, production, and despatch activities with real time capture of data through touchscreen and mobile devices. If you ever have the misfortune of having to recall a product then in seconds Epicor Tropos can highlight the impact of the problem thus minimising the impact of the recall and the loss of reputation, helping you focus on getting fit for business growth.