Trace One, the supplier of e-collaborative solutions to accelerate the development and ensure quality and safety of food and non-food products, considers the retailer implications of product recalls in the light of the recent horse meat scandal in Europe
Over the last few months it seemed as though there wasn’t a day that went by that didn’t involve another revelation regarding contamination with horse meat in the processed meat industry. As the scandal engulfed Europe, consumer confidence in the food industry hit rock bottom and retailers have been left to pick up the pieces as their products, profits and brands take a battering.
More than anything else the scandal has thrown a spotlight on the sheer scale and complexity of the food supply chain. Currently food retailers work with multiple suppliers, across multiple territories with multiple jurisdictions. This has made it increasingly difficult for retailers and manufacturers to manage every facet of the process, especially where trust has to play a part, and to ensure information on products on the shelf is transparent and readily available. It has also shown where there is commercial pressure, there will always be an incentive for ‘creative’ and potentially illegal means of cutting costs to increase profits.
The recurring problem
In 2005 the contamination of Worcester sauce with the illegal dye Sudan 1 brought about the largest ever product recall in the UK. Once this scandal was dealt with, the food industry took decisive steps to prevent a situation like this from ever occurring again. In recent years the E Coli outbreak and now the horse meat scandal have shown product recalls are occurrences the food industry will always have to deal with, especially if, like the horse meat scandal, it is the result of fraudulent actions. Smaller scale, less publicised product recalls are part of the common list of problems a retailer needs to deal with, and this is a trend that is not going to change. As the accuracy of detection methods improves and food production becomes increasingly international, the odds of a product being found with unexpected contents will increase exponentially. It is therefore crucial for retailers and suppliers to use effective traceability solutions to manage product recalls. In turn this will enable them to mitigate any potential risk to the public and to the reputation of the company.
The role of traceability
Traceability is central to effectively managing product recalls. When the horse meat contamination first emerged it was crucial to know what products on the shelves could be potentially contaminated and who the suppliers were. In situations like this it is still possible to be made aware of the contamination before the news hits the media and take the necessary action. For some retailers, once they were alerted to the fact their products could potentially be affected they were able to conduct a database search, discover exactly which products were at risk and contact their suppliers directly for assurances within an hour. In situations where the public health is at risk, such as the Sudan 1 or E coli contaminations, initiating product recalls within an hour rather than days or weeks can be potentially life-saving. Even though some have blamed “labelling” inaccuracies during the horse meat crisis, retailers cannot risk gambling with consumer confidence through inaction and waiting for information on the exact source of the contamination to slowly emerge.
Knowledge is power
When it comes to the effective management of product recalls, knowledge is power. Being able to quickly identify which products have potentially been affected is the first step in taking decisive action. However, this isn’t worth much unless you are able to communicate this information quickly to your partners and remove products from the food chain. The ideal situation is one in which there is advanced warning on potentially contaminated products before the problem becomes widespread; however this it is not always the case. When a contamination scandal is unfolding and being increasingly scrutinised under the public eye, the most effective strategy for retailers is to keep the public informed of progress and developments throughout the crisis. Only then can consumers regain any confidence that the retailers can be relied on to correct the situation as quickly as possible.
Lessons to be learned
Following a large scale contamination scandal like the horse meat crisis, often the resulting public outcry leads to calls for the Government, FSA and other regulatory bodies to introduce new measures to prevent or at least limit the chance of another such situation from re-occurring. What suppliers and retailers can expect to see as a result of the horse meat contamination is an increase in demand for DNA testing of meat products. Unfortunately this is easier said than done as you can only determine what DNA is present by looking for that specific animal. The industry is going to need to be practical and determine a manageable list of DNA strains that are to be tested for. As a direct result of this, retailers and suppliers are going to have to bear the extra costs which will inevitably be passed on to consumers. While retailers cannot avoid this, they can ensure any new changes to product packaging imposed as a result of new measures are implemented quickly and across their entire product ranges to minimise disruption.
Moving forward retailers and suppliers may take proactive measures to try and limit the damage from product recalls by horizon scanning. An example of this will be when the issue first broke in the UK, retailers on the continent were prompted to look at their products and seek out assurances their products containing minced beef were not affected. Some may argue retailers weren’t to know the adulteration of products with horse meat was not a one-off occurrence in Ireland. However, the cost of the fallout of the product recall of this scale far outweighs the time and effort it takes to communicate with a supplier to get assurance.
Betting on the future
What the long term impact of the the horse meat scandal will be is anyone’s guess, especially with the BBQ season, or at least an approximation of it, fast approaching. We are yet to learn how the prospect of contamination will impact consumers’ purchasing decisions for processed foods such as hamburgers. However, in the meantime retailers and suppliers can take steps to make sure their houses are in order. Having more information available on the product supply chain and also ensuring the products contain exactly what they say on the label is crucial. As it will enable retailers to restore consumer confidence and making sure that next time a crisis like this occurs retailers and their suppliers are able to act as efficiently as possible.