The cost of recalling products in the food industry
21 Sep

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Having to recall food products can be hugely embarrassing for a company, causing massive disruption and possible harm to consumers. It can also be incredibly costly.

We’ve done some research into recalling products within the food industry, finding out the most common reasons and just how much it costs food companies to do so.

In 2016, 84 food products were recalled in the UK

Common causes:

Biological contamination 44%

Foreign matter contamination 27%

Mislabelling 13%

Product defects 7%

Unapproved ingredient 5%

Hygiene issues 4%

Types of food product recalls:

Fruit and veg 27%

Dairy 19%

Baked goods 12%

Meat 11%

Nuts and sweets 10%

Spices and teas 6%

Fish 6%

Drink 6%

Other 6%

Pasta, noodles and grains 3%

Supplements 3%

Sauces and dips 2%

The cost of recall

There are four distinct areas that incur costs when dealing with a product recall:

  1. Assembling a crisis team
  2. Removal of product from the market
  3. Investigating and addressing the cause
  4. Managing the PR

But there are also indirect costs to factor in, these can include:

  1. Stock decline
  2. Legal fees
  3. Loss of sales
  4. Negative brand reputation

Consumer views

55% of people would switch brands following a recall, even if only temporarily

21% of those surveyed stated that they’d actively avoid the full product range made by the manufacturer at a centre of a recall, not just the recalled product itself

15% of them would never purchase the recalled product again

Prevention rather than cure

200 industry employees and executives were surveyed and 42% said cost-cutting in the production process was to blame for the increase in the number of recalls.

26% of businesses claimed it would take up to 6 months to recover from a product recall.

67% of businesses said the recall of a key product would cost them more than £30,000.

It’s clear from the findings that it’s worth investing in prevention rather than having to deal with the cost of the cure.

Cost-effective ways to prevent product recalls

Segregate different production lines to avoid cross contamination

Manipulate manufacturing schedules to minimise the potential for contamination

Create a barrier between lines in operation and lines being routinely cleaned

Provide dedicated air conditioning and extraction systems to minimise the risk of cross contamination

Provide colour coding on equipment and clear labelling

Find out how Flexiwall and Flexicurtain can help within the food manufacturing industry.

Sources:

packagingeurope.com
www.newfoodmagazine.com
www.foodmanufacture.co.uk