The failure to keep food safe has had a devastating impact in the US, and to borrow a phrase, one that has a negative triple-bottom-line effect as it lowers consumer confidence in food manufacturing, diminishes profits and affects the food industry's reputation.
No wonder the 2011 Food Safety Modernization Act (FSMA) was passed. For the first time, the US FDA is authorized to help prevent rather than simply respond to outbreaks of foodborne illness. This enhanced inspection role and long-sought authority to order mandatory recalls was labeled "a sea change" by The New York Times.
This year, the FDA is continuing its emphasis on food safety by holding a series of public meetings and issuing proposed rules, seeking industry and public feedback along the way. In early May, the agency released draft guidance for the industry on mandatory food recalls, so now is the time for food and beverage companies to share their thoughts about proposed regulations. Soon, these documents will be finalized.
Food Industry Standards Voluntarily Higher
Interestingly, many of the 2011 FSMA regulatory changes lag behind the food industry's self-imposed standards, where leading companies have embraced proactive approaches to protecting consumers. Employing food protection standards is not only conscientious given the instantaneous and lingering damage product recalls can inflict on a brand's reputation, it's a smart posture to protect bottom lines.
Out of 93 FDA-documented 2014 U.S. food recalls, 63 were categorized the most serious "Class I" variety. Some 18.7 million pounds of products were involved, at a cost impossible to tally for producers and retailers, who rarely recover losses. But the price of wasted product isn't the biggest concern for food companies: It's the reputational hit that impacts their brands and the potential loss of shelf space and market share common with product recalls.
For example, the damage after a 2009 salmonella outbreak in peanut butter cost US producers an estimated $1bn, according to "Capturing Recall Costs," a report from the Grocery Manufacturers Association. Though the recalled products came from a single Georgia processing plant, a lingering 25% nationwide sales drop in peanut butter resulted as spooked shoppers skipped PB&Js and reached for alternatives, noted The New York Times.
Transparency A New Force
In addition to internal concerns about recall costs and reputation, external drivers of enhanced food protection and transparency continue to broaden spurred by today's consumer trends. Eating local, urban farming, clean labels, ethical sourcing, natural ingredients and concerns about quality, additives and preservatives motivate consumers to seek supply chain transparency.
Given these new demands, at Tetra Pak, we know traceability is a critical objective for many brands. As an early innovator in this area, we know reliable and readily available information adds speed and precision to manufacturers' efforts to limit or keep tainted food from reaching consumers through pinpoint accuracy to identify and locate products. Our integrated Tetra PlantMaster technology allows customers to collect and share traceability data and information easily and readily not only with government regulators but consumers.
For example, Brazilian dairy Aurora invites consumers to track milk from farm-to-shelf through an on-package code and a Tetra PlantMaster-enabled website interface. This level of transparency answers questions about food origins and is a powerful driver for many consumers, charmed by provenance stories or committed to buying local.
Strengthening The Triple Bottom Line
In line with our mission at Tetra Pak to "make food safe and available everywhere," we have always taken a proactive role in industry product safety discussions. Our work on traceability is just one example of our approach to this critical mission. By honing our efforts to enable food safety, we are protecting and saving food from external dangers, which helps reduce contamination risks and protects the food supply for consumers.
Others companies are doing the same; GE is touting its industry technology addressing food safety, while IBM has partnered with Mars in the ‘Consortium for Sequencing the Food Supply Chain’, a project to harvest and sequence the DNA and RNA of simple food samples to determine where anomaly and mutations occur when paired with common organisms or genes, toxins and heavy metals. The resulting index produced will be a gold standard for food and health officials globally to understand what triggers contamination and the spread of disease and may ultimately limit related food waste.
Efforts by businesses are key to changing the face of food safety. It is exciting to see the industry actively developing tools to prevent future issues, as well as isolate and eliminate future failures. And all this defines a new triple bottom line in food safety: higher consumer confidence, improved profits and a stronger industry reputation. Now that is simply good business.’