• Product recalls - particularly in the agriculture industry - are one of the greatest risks to your business, product, and consumer loyalty.
• Due to the complex nature of agriculture supply chains, getting a handle on your products and protecting them from start to finish can be a tricky task.
• Supply chain traceability tools - such as BanQu - can help you gain the full visibility and control needed to recall-proof your supply chain.

Recall prevention to support healthy commodities for the agriculture supply chain of farmers and businesses

“A strong traceability program not only satisfies [compliance] requirements and can facilitate an effective product recall, it also can position a company to unlock additional value as part of the tracking process.” — Deloitte

Making sure your agriculture supply chain is optimized and compliant is critical. Product recalls - and costs - are increasing across industries from automotive to fruit. In 1988, the U.S. Consumer Product Safety Commission was involved in approximately 221 recalls covering about 8 million product units. Five years later, in 1993, those numbers had risen to 367 recalls covering about 28 million product units. Based on a study from 2011, the average cost of a recall is $10 million.

In this guide, we dive into food recalls, the complexities of agricultural supply chains, and how you can leverage traceability to recall-proof your business.

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What is a food recall?

A food recall happens when a food producer takes a particular product off the market because there is reason to believe the food could make consumers ill. At times, government agencies may also order a recall when instances of consumer illness occur. 

Common causes of food recalls include:

• Bacteria or parasites (i.e., Salmonella, Cyclospora, Aflatoxin, from physical or cross-contamination)
• Foreign objects (i.e., broken glass or metal)
• Undisclosed allergens (i.e. major allergen or allergen cross-contamination not featured on product labels)

Second to meat-related illnesses, vegetables, and fruits have come in as the top cause of consumer illness from 2009 - 2018. Recently recalled fruits and veggies include romaine lettuce, cantaloupe, peaches, nectarines, plums, and applesauce.

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Top foods that caused illnesses 2009-2018 

What risks does a company face with a food recall?

Apart from the health-associated risks to consumers (illness, hospitalizations, death), companies and producers of recalled food products face enormous, costly risks to mitigate.

Top risks companies face with a food recall include:

1. Product Loss. Perhaps the most obvious loss of a product recall is the product itself. Particularly in food recalls, companies must swiftly identify affected sales, refund said purchases, and dispose of all potentially affected products across all their retailers and grocers.
2. Costly Fixes. In addition to the costly loss of product, companies face many other operational and financial costs with food recalls. From product retrieval to PR and notification costs to consumers, supply chain, and regulatory bodies, to investigation into the root cause of the recall, to potential litigation costs and the labor costs to manage all these processes.
3. Reputational Damage. Since food contamination and recalls can be so dangerous to consumers, reputational damage is unavoidable and can even decline your company's market value.

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Best practices for your food recall strategy 

Product recalls can happen to any company, particularly those with complex agricultural supply chains. It can be extremely difficult to pinpoint and address potential contamination concerns. However, there are steps companies can take to recall-proof their agricultural supply chains as much as possible.

1. Supply Chain Visibility & Traceability. Supply chain traceability entails gaining insights into the origins and journey of your products from beginning (farm) to end (consumer). This level of visibility is your greatest tool in recall prevention. With supply chain traceability, you can quickly pinpoint potential risks exactly where they occur. And, in the off chance a recall occurs, you can more efficiently & cost-effectively identify affected batches to stop contamination in its tracks.
2. Policy & Planning. One of the first and best steps to recall-proofing your supply chain, is to put policies and plans in place to prepare for and handle the unfortunate chance of a product recall. Your strategic plan should answer the question “What would need to happen and who would need to be involved if we had a product recall?” Harvard Business Review’s product recall strategy is a great place to start.
3. Cross-functional Alignment. Because recalls affect nearly all aspects of your business - from PR to marketing to supply chain to procurement to distributors and beyond - ensuring that your recall strategy has buy-in and alignment across your org is essential to creating a plan that works for everyone and leaves no stone (or fruit) unturned. 

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How agriculture supply chain traceability can prevent recalls

“Traceability can reduce the scope of the recall by between 50% and even up to 95% in some cases.” — International Trade Centre

Let’s look at an example of how a bacterial outbreak would affect a cantaloupe supply chain, and how having supply chain visibility and traceability down to the first-mile farm can prevent and mitigate product recall risks.

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Typical Recall Scenario (before traceability)

A typical cantaloupe supply chain involves several stages from cultivation on the farm (pre-planting, planting, cultivation, etc.) to harvesting to packaging and grading to distribution and transportation to retailers and markets.

Most markets and retailers have very limited visibility into the journey of their cantaloupe. Meaning, they know the distribution center from which they purchase cantaloupes but have no visibility into the steps before — grading, packaging, harvesting, the farm and the farmers who make their cantaloupe supply possible.

Cue a salmonella outbreak.

Several consumers are sick, some hospitalized, and one death that are all traced back to cantaloupe sold at your market. Not only do you have to quickly dispose of the cantaloupe and put out litigation and PR fires, but you also have to quickly figure out where the affected salmonella originated and how to stop it. You’re able to identify which distributor the cantaloupe came from, but it’s up to them to take it from here. 

Millions of dollars, disgruntled consumers, and an exhausted team later, you’ve had to dispose of all your cantaloupe supply - regardless of which supplier your purchased it from. 

Your “strategy” moving forward is to simply switch suppliers and hope for the best.

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Recall-proofed Agriculture Supply Chain Scenario (after traceability)

With traceability in place, your mystery supply chain turns into a well-oiled, well-mapped machine. Food traceability ensures that you have all the information you need from farm to fork to have a true handle and complete visibility throughout your supply.

Going with the example of a cantaloupe supply chain, having a traceability system in place would enable you to record and identify information throughout the supply’s chain of custody including:

• Additives & Fertilizers (what types of fertilizer or treatment has been done to the cantaloupe?)
• Volume & Quantity (how many cantaloupes are passing through stage-to-stage so you can track and meet demand?)
• Weight & Quality (what weight or quality measures is every cantaloupe or batch of cantaloupe from end-to-end?)
• Expiry date (what expiration at each level of production is appropriate to ensure healthy, safe cantaloupe?)

Perhaps the most impressive benefit, a food traceability system can help you pre-emptively identify and monitor harmful toxin levels at the farm level, so you can stop any potentially toxic cantaloupe in their tracks pre-processing and long before human consumption. Saving you millions in time and money.

Cue a salmonella outbreak.

However, in the off-chance of a salmonella outreak, a traceability system is your best friend.

As soon as it has become apparent that consumers are getting sick from your cantaloupe, you take action. Within a few days, you’ve used your traceability system to identify and dispose of the exact batch of cantaloupe that was causing sickness. You’re also able to identify the exact farm, farmers, and plots of land where the cantaloupe originated to ensure appropriate actions are taken to prevent another outbreak in the future.

You’ve saved millions of dollars, hundreds of hours in bandwidth, your business, and maybe even a few consumer lives.

Conclusion: Recall-proof your business through agriculture supply chain traceability

Whether you’ve faced a recall and need a better systematic strategy, or hope to pre-emptively recall-proof your supply chain, traceability is key. Knowing exactly where your agricultural products originate, and what their journey looks like through the chain of custody will not only set you up for overall operational and financial success, but will strongly recall-proof your supply. BanQu is an end-to-end supply chain traceability software that has helped agricultural companies around the globe to create recall-resistant supply chains. Schedule a consultation today to learn more.

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