FDA Recalls and Their Consequences

No restaurant or business intends for a foodborne illness to happen, but unfortunately today, they’re very prevalent.  Major food distributors and businesses alike cringe when they hear their products are responsible for an outbreak.

Take the recent FDA report on a farm linked to a major egg recall. A farm in North Carolina linked to a multi-state outbreak of eggs contaminated with salmonella is being criticized across numerous news outlets for the conditions they let fester within their facility.

Rose Acre Farms, much to their chagrin, recently recalled 207 million eggs produced on their farm due to the risk of salmonella. Thus far, the outbreak has been linked to 23 illnesses and 6 hospitalizations.

FDA inspectors recorded violations such as:

  • Condensation dripping from ceilings, pipes, and walls onto production equipment
  • Accumulated grime and food debris on equipment
  • Contaminated steel wool utilized to scrub equipment
  • Numerous observations of employees’ unsanitary behavior

Granted operations of egg production are large in scale, but we must ask ourselves what the potential consequences of these outbreaks are for a business?

1.  Media Attention

Due to the reach of media today, notice of foodborne outbreaks have become prevalent. If you are in the business of handling food as a restaurant owner, grocer, farmer, distributor, or seller, the guaranteed media attention is enough to care about food safety in order to avoid bad publicity that will cause irreparable harm to your reputation. Repairing your brand image is a lengthy process that can take away from other aspects of your business, while allowing prospects to choose competitors over your brand.

2. Millions of Dollars Are at Stake

If pressure from the media or federal government isn’t enough to reconsider your food safety standards, this will—the Grocery Manufacturers Association surveyed three dozen companies in 2011 and more than half reported being impacted by a food recall during the previous five years.

Of this contingent, 18 percent lost between $30-$90 million because of the recall and lost sales, and an additional 5 percent said the financial impact was $100 million or more. These numbers don’t take into account the overall damage to their brand and missed future earnings, as well as any lost revenue due to lawsuits and fines.

3. Wasted Food

While improper execution of the best practices above can lead to FDA imposed sanctions and profit loss, it also perpetuates the problem of food waste globally. This issue has become an epidemic and one that greatly affects the lives of many.

In a recent National Geographic article, The Food and Agriculture Organization (FAO) suggests that:

  • One-third of food produced for human consumption worldwide is annually lost or wasted along the supply chain
  • Which equates to 2.8 trillion pounds of food lost each year
  • That is enough to feed 3-billion people per year

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