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Frozen toaster waffles, smoked salmon, green onions and a growing concern over listeria outbreaks are just some of the gamut of recalls and market withdrawals that the FDA has put out in recent weeks.
It’s a wake up call for food companies that need to have a proper plan in place when potential health concerns and subsequent recalls affect their supply chains, according to Roger Hancock, CEO of Recall InfoLink, which offers recall management software to companies.
The origins of recalls can vary greatly, according to Hancock.
“Some come from consumer complaints, some can start from regulatory testing. Some can start from data review internally on a product line,” he said.
Prioritizing being proactive
Once faced with a recall, companies should have a step-by-step game plan already set up, including who they will communicate to first, according to Hancock.The best way to be prepared, said Hancock, is to act as both a company and a supply chain.
That’s only half the battle though, said Hancock. “Once you understand where your products come from, you need to be able to effectively communicate the tides of sale.” Trying to minimize the recall will only worsen the reputation of a brand.
According to Hancock, effective communication and preparation involves three things:
- Ensuring all parties understand the urgency
- Removing recalled products from the supply chain
- Report the incident to consumers with clarity to maintain the reputation of your brand
Because recalls are typically reactive, companies should first collect as much information about the situation as they can and then share that information per their specific policy.
“If you’re a supplier, you want to get information about production runs, cleaning cycles, documented packaging, complaints that have come in, then share that with you crisis or executive teams to evaluate the information,” said Hancock.
When considering issues as a supplier, it’s important to ask questions including, “Is this a health hazard?” or “Is this related to product quality?” The answers to these questions will help you determine who to speak with first, according to Hancock.
Sometimes the first line of communication companies should take is with the media, customers, labs or regulators.
Food executives should also always be thinking about how they would tackle a recall with their trading partners, so that an existing plan between is in place, he said.
“By far, the biggest gap that slows recalls down, on average, is knowing how to get a hold of who you need to get a hold of,” said Hancock.
Boiling it down to principles, a company needs to:
- Collect information quickly to make a prudent and timely decision
- Make decisions in a process not a vacuum
- Communicate appropriately for the sake of prompting the needed action to be taken
- Take action
How to mitigate costs
With recalls, there are a few direct costs that companies can easily anticipate — reimbursing people for products not sold, disposing of products and communicating with people regarding recalls.
“Indirect costs get in the mix during the recovery side of a recall,” said Hancock. “Marketing activities, communicating and rebuilding trust with consumers — the better job you do on the front side of a recall, the lower your indirect costs will be.”
The general characteristics of a company that handles a recall well, he said, is consistent and communicative. “Confusion is the enemy of a well processed recall,” he said.
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