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Increasing Risk and Regulation Drives Change in Recall Management
by Melanie Neumann, JD, MS
What does the globalization of the food supply, the increase in co-manufacturing and private label manufacturing, advances in technology, increasing consumer sophistication and demand for information, and new regulations all have in common? Each individually, and collectively, contribute to the risk of experiencing a product recall.
More than ever are we seeing lawmakers, regulators, consumers, and the media more focused on food safety. Several outbreaks of foodborne illness in recent years have identified new risks and have put food safety in the spotlight. The changing consumption patterns, global sourcing, evolving food-safety science, and the identification of new risks all contribute to the shifting food-safety landscape.
The science of food safety is continually evolving: New laboratory tests, improvements in genetic testing, and a greater fidelity of epidemiology have resulted in better capacity to detect and identify foodborne pathogens, and to link illnesses with specific food products. The vigilance of both mainstream and social media, along with consumer’s capacity to damage a brand has made it all the more important to maintain a robust food safety program. This includes a well-developed recall and crisis management plan that adapts to change whether it is regulatory, science, or consumer driven.
The signing of the Food Safety Modernization Act (FSMA) by the U.S. President in January 2011 is the most sweeping overhaul of the food-safety system in the U.S. since the Food, Drug, and Cosmetic Act of 1938. While FSMA has already delivered broad-sweeping changes through several proposed rules that have been released to date, this article will focus on the impact of FSMA on recall plans and the importance of effective recall management.
Regulatory Agencies and Applicable Recall Regulations
FDA and the FSMA. The FSMA specifically provides the FDA with mandatory recall authority, complete with the power to order a firm to cease distribution and recall a product “if the Secretary determines, based on information gathered through the reportable food registry under section 417 or through any other means, that there is a reasonable probability that an article of food…is adulterated under section 402 or misbranded under section 403(w) and the use of or exposure to such article will cause serious adverse health consequences or death to humans or animals.”
What does this mean exactly?
First, this new authority simply means that FDA has the power to issue a mandatory recall when a company fails to voluntarily recall unsafe food after being asked to do so by FDA. The reality of a company refusing this request is very unlikely thus we won’t see many truly “mandatory” recalls. However, if mandated, FDA can issue an order requiring the firm to immediately cease distribution of the affected product and immediately notify all persons who manufacture, process, pack, transport, distribute, receive, hold, or import and sell the affected product of the recall and to immediately cease distribution.
Second, there is one phrase in Section 417 that packs a big punch by way of impact on the scope of records FDA is entitled to review and copy in relation to a recall investigation. That is the “reasonable probability” standard. Prior to FSMA, FDA needed “credible evidence” of a situation that could cause serious adverse health consequence or death. Now this bar has been lowered—significantly—to only needing a “reasonable probability.” This expands FDA’s ability to seek and obtain records to ones previously off limits pre-FSMA. The bar may be lower, but the stakes are higher if you are not properly documenting and retaining required documents pursuant to the record retention requirements under FSMA’s new rules.
FDA provides an industry guidance document located on its website that outlines the major considerations and components of a recall. This document includes the key pieces of information needed and execution steps expected by the agency in the FDA Recall Industry.
USDA Food Safety Inspection Service (FSIS). Different from FDA’s mandatory recall authority, under USDA/FSIS regulation, it is a firm’s decision to voluntarily recall a product. However, FSIS coordinates with the firm to ensure it has properly identified and removed the recalled product from commerce by verifying the effectiveness of the firm’s recall activities. Companies under FSIS jurisdiction who find themselves in a recall are required to notify their local FSIS District Office personnel within 24 hours when they learn or determine that adulterated or misbranded product has entered commerce. FSIS also requires firms to prepare and maintain recall procedures detailing how to conduct and execute a recall, and affords FSIS the right to review and copy records that may relate to a recall.
USDA provides guidance on how to manage a USDA recall in its Directive 8080.1 Rev. 7 document, which can be found on its website.
Both agencies notify the public about product recalls through public press release announcements, and email alerts sent by each agency to subscribers, such as the FDA Recalls, Market Withdrawals, and Safety Alerts.
Preparation is Key
Understanding the regulations and expectations by the agency that governs you isn’t enough to truly be “ready” to successfully handle a recall. Companies must focus on preparation rather than reaction. By focusing on the following best-in-class preparation tactics, companies can better prepare themselves to tackle a recall and come out on top. The suggested tactics are as follows.
Create a Written Recall Plan. Both FDA and FSIS require written recall plans with specific elements, but what additional content should be in an effective recall plan? In my years of experience, the following elements are the keys of a robust recall plan that possesses a high probability of executing a successful recall:
- Corporate policy statement commitment to food safety and quality and placing consumer health and safety at the forefront of all decisions;
- Cleary defined roles and responsibilities;
- Incident identification, investigation, and escalation process;
- Health hazard evaluation process;
- Communications plan and procedures; and
- Training and testing through simulations.
Develop a Toolbox. Time is of the essence in a recall or other food related crisis. Sitting down in the midst of an actual crisis is not the time to start putting pen to paper for the very first time. Avoid the rush of writing content for a press release or researching appropriate health risk statements by planning in advance. Take the time now—in a time of calm not chaos—to prepare as much of this information in advance to save precious time during an actual incident. Good “tools” to develop and have in your toolbox include:
- Templates—press releases, FAQs for your call center and website, customer letters, and agency communications;
- Checklists—recall action items and meeting logs; and
- Contact Lists—internal recall team and backups and external expert resources.
Test Your Plan Through Simulations. The importance of training and testing your recall plan cannot be emphasized enough. The most effective way adults learn today is by practical, hands-on learning. So kick the tires of your plan, test your systems, and challenge your people! Do not make these simulation scenarios easy just to check the box. Your organization will not grow and improve unless you challenge the people, process, and technology that you rely on to successfully execute a recall.
Thus, companies should conduct both announced and unannounced recalls. Consider including your customers in the simulation by selecting a finished product of one of your major customers. This shows your commitment to food safety and the protection of your customer’s brand, and often your customer requires you to conduct a simulation using one of their products anyways.
Do not be afraid to challenge your traceability capabilities by selecting an ingredient that is used in several different finished products you produce to get a realistic assessment of your track and trace strengths and weaknesses. Don’t stop at the trace. Continue your simulation through to its natural conclusion which is the need to prepare an effective and appropriate communication plan for each audience impacted by the recall (e.g. actually draft a consumer level press release and/or a customer recall notification letter). We have seen many recalls remain in the media spotlight due to ineffective PR and communications strategies. Avoid the unwanted spotlight, and test in advance. This is not the time to take risks.
Your organization will not grow and improve unless you challenge the people, process, and technology that you rely on to successfully execute a recall.
Call in the Pros
One of the best things you can do is “know what you don’t know” then call in the professionals. Use experts in areas where your organization may not have the bench strength needed in a particular food safety or recall incident. It’s important to recognize that experts are not only people with specific knowledge in a certain area, but also technology solutions providers and testing and equipment manufacturers.
Identify experts, call centers (for surges in call volume), and laboratories in advance. Take the time to educate these service providers on your business, products, and risk tolerance before an actual crisis instead of during one when every minute becomes a precious commodity you cannot afford to waste. Conduct all necessary vendor approval steps and establish these resources as fully vetted suppliers/vendors before you need to “turn on the light switch” and call them into action in an actual or threatened crisis situation.
It is best practice to have the following resources established and in your network of vendor partners ready, willing, and able to assist if you need them:
- Medical experts,
- Public Relations Firms,
- Call Centers, and
- Product Retrieval Firms.
In this era of heighted consumer awareness and sensitivities to allergens and country of origin information, as well as a global supply chain, sourcing from so many different suppliers from all over the globe delivers an ever-increasing amount of risk. This fact is difficult to ignore as we have seen many recent recalls caused by suppliers sending adulterated ingredients to a finished product manufacturer. Using technology to help manage this risk is a good decision to not only ensure compliance with regulations, but more importantly to ensure brand protection.
Some areas where food companies have best leveraged technology to mitigate the risk of a recall are as follows.
Inventory/Production Systems. Being able to quickly identify affected products subject to a recall is imperative. To facilitate this, it is of vital importance to document and retain relevant production information including date of receipt of ingredients and utilization in finished product(s) lot and/or batch codes, and distribution records. The use of electronic systems rather than manual records helps ensure this information is quickly accessible and accurately identifies the affected scope of the products to be recalled.
Supplier Compliance Systems. If companies are assessing and monitoring their supplier risk appropriately, they are asking suppliers to provide a lot of information—from food safety plans and allergen control programs to certificates of insurance and indemnification agreements. The days are numbered where industry can continue managing records manually. The more companies can leverage technology to manage its risk the better protected a company will be. Technology decreases the risk for human error and manages a plethora of critical data elements electronically to confirm suppliers are complying with expectations and risks are controlled, eliminating manually-kept processes.
Complaint Management Systems. Customer Relationship Management (CRM) systems are effective risk management tools in that these systems document as well as trend complaint data over time. CRM systems typically share similar features such as the ability to electronically and automatically identify trends by programming specific “triggers” in the system. For example, a company may determine that three complaints on the same product/same lot code for the same or similar reason warrants escalation to the food safety team to further investigate. CRM systems also allow users to auto-notify preselected people in the company that there may be an issue that warrants further attention. It also allows for effective data capture and documentation management to show that each complaint was attended to, investigated as appropriate, and resolved in some manner. Attempting to do all of this manually is ripe for the risk that a critical complaint or trends will be missed and goes unreported, which could lead to a recall, or one much larger in scope then if the issue was identified and investigated right away.
These systems also help achieve a key best practice: Documentation. In the eyes of the agencies as well as the media, plaintiff’s attorneys and consumers—if it isn’t documented, it didn’t happen. Using technology verses manual records heightens the odds that all key information is documented on a consistent basis.
Having well-defined recall procedures and an active, well-trained recall team are the first steps to better recall management. Coupled with combining this strategy with technology solutions and best practices helps food companies efficiently and knowledgably manage recalls and, more importantly, reduces the consuming public to exposure of potentially dangerous products. The benefits of an organized recall program include organizational efficiency, brand protection and, most importantly, public health and safety.
Neumann is vice president and CFO of The Acheson Group, LLC, a strategic risk management consulting firm assisting companies in the food and beverage space to more effectively manage their operational, regulatory, and reputational risks. Reach her at Melanie@AchesonGroup.com.
References furnished upon request