A simple labeling error can cause quite a stir in the food supply chain these days. CNN reported that the U.S. Department of Food Safety and Inspection Service said Truitt Brother is recalling 1.77 pounds of Velveeta Cheesy Skillets Singles Ultimate Cheeseburger Mac. The recall is due to labeling that fails to mention hydrolyzed soy protein and dried soy sauce as ingredients on some of the packaging.
The soy products are allergens, however, Kraft Food Spokeswoman Joyce Hodel told CNN that the product is otherwise safe and those without a soy allergy can consume it. The recall highlights the need for traceability in the supply chain as government oversight and consumer concerns about food products expand.
Many Companies Ill-Prepared to Meet Recall Demands
According to RFgen's white paper, "The Food Traceability Survival Guide," a study reported that only 52 percent of organizations can execute a recall in a matter of hours. The white paper suggests that this could be due to the high number of companies that still use paper-based or only partly automated data collection systems.
The costs of recalling and destroying food products can range greatly and some examples show expenses of nearly $1 billion. According to the website Reliable Plant, Topps Meat Company was forced out of business in 2007 after a recall of 21.7 million pounds of ground beef. Health officials said it was possible the meat was tainted with E. coli. According to RFgen's white paper, the cost of that recall was $17 million.
Maintaining a Positive Brand Reputation
While no company wants to go through a recall, the financial cost of the process is only one consideration. Even if the organization survives the economic impact, brand degradation from an improperly managed situation can cause a considerable loss in profits long after the product has been successfully removed. If the parent company has multiple brands associated with it, negative publicity could even trickle down to other products.
Automated Data Collection in The Food Supply Chain
Effective traceability requires a company to trace food from field to fork and track lot, batch and serial numbers. While existing ERP systems help log important information about a company's food supply, if employees still have to manually input data due to a paper-based collection system, they are not prepared.
Automated data collection can reduce errors and the time it takes to create an accurate model of food traceability, hastening the recall, reducing costs and maintaining brand integrity. In real time, employees can capture data regarding aspects of food products that could lead to compliance issues, such as date of harvest and provenance.
Furthermore, the 2011 Food Modernization and Safety Act gave the Food and Drug Administration authority to require mandatory recalls and establish a food-tracing system. Companies without automated data collection could not only find themselves in a precarious situation with consumers, but also operating outside of government compliance regulations. Solutions provided by RFgen can help companies improve their food traceability and mitigate the negative impact of a recall.