For food manufacturers, a product recall can be a major challenge — one that if not properly carried out can irreparably damage consumer trust and financially devastate the company's bottom line. The monumental task is challenged by complex regulatory guidelines, more rigorous testing standards and social media where talk of an outbreak can go viral.
Consulting firm Stericycle ExpertSOLUTIONS provides advice to and helps many food companies quickly and properly respond to a recall. The company disposes of recalled products or stores them inside football field-sized warehouses, staffs call centers to answer consumer questions and sends checks to reimburse people who purchased the items in question. Stericycle even works with some manufacturers of food and other products to conduct mock recalls. Since 2005 when it first began working in the field, Stericycle has been involved with thousands of food recalls.
Michael Good, Stericycle ExpertSOLUTIONS’ vice president of commercial and client services, spoke with Food Dive about the process that companies and products go through when there is a recall, as well as the steps affected businesses can take to minimize the impact on their operations.
This interview has been edited for clarity and brevity.
Food Dive: How do you get involved in a food recall?
Good: That problem might come from a consumer complaint, it might come through routine testing or it also might come from a notification by maybe the supplier or a distributor of that product. So those are typically the three areas by which an alert is put in play. And in general, they'll closely follow what we refer to as the recall lifecycle.
Food Dive: Can you describe the recall lifecycle?
Good: The first phase would be preparation. And this really gets into having a robust, properly tested recall plan in place before recall happens. And that can obviously make a recall run a lot smoother. So as soon as an issue is reported, the clock kind of starts. And if a company spends too much time wondering — what should we do? what do we do now? why didn't we know about this? — then they're losing pretty much vital time that they can't really recover. So with proper planning and systems in place, a recall can obviously be far more effectively managed.
The notification is phase two of the life cycle. This is where companies have to really identify the retailers and the distributors who are carrying the affected product and then notify them directly with specific instructions. So a press release can help notify the public through the media, but increasingly retailers with membership cards are most of the time reaching out directly to customers who purchased the affected product.
The third phase is what's called response management. And so while recall fatigue has been a challenge — meaning consumers are so inundated with recall news that they tend to tune out of it unless it really impacts them individually or there's some death or some crazy over-the-top reaction — when you're dealing with high profile food recalls, or one in which tens of thousands of consumers are notified directly of the issue, that can result in an influx of calls. As an example, we've had recalls on the Today Show. And the Today Show literally puts up an 800-number on their screen. Within a matter of seconds you see thousands of calls come into a call center and the organization, the food manufacturer has to be prepared to have the proper protocols, the proper training, the proper number of people in those seats to take those calls so that there's not either abandoned calls or people sitting on hold for two hours.
The fourth area is product processing. So if you just think about the natural life cycle, we've talked about preparation, then notification, and then response management, and now we're in product processing. So when retailers are notified of the recall, they're instructed on how to identify the affected product and remove it from the shelves. Unfortunately, in many cases, they may simply remove all the products from a particular brand which can obviously be costly and not only early on, but long term if consumers end up changing brands. So if somebody recalls a, let's say bread, and they take all the bread off the shelves instead of just those that are affected, you're really removing that brand from the shelf.
And then the fifth one, which is sometimes the one that has the most lasting effect if it's not done right — that's called remedy. A recall remedy must be distributed and in most cases, food recalls involve a full reimbursement. So if you go buy that loaf of bread and you paid $4 for it, in most instances you're going to get a $4 refund and maybe a coupon toward a future purchase of another free loaf of bread. Insufficient recall remedies though can lead to consumer frustration and negative media coverage resulting in damage to the company's brand. We consult with them on that. What we've seen work and have the greatest impact, and a lot of times maybe even go above and beyond what the customer might expect, taking that extra step. Say, 'Okay, we're going to give you your money back and we're going to give you x, y, and z in addition to that as a result of putting you through this recall.'
"Insufficient recall remedies though can lead to consumer frustration and negative media coverage resulting in damage to the company's brand. What we've seen work ... [is going] above and beyond what the customer might expect, taking that extra step."
Food Dive: What happens with food that is recalled?
Good: Consumers who do learn about a recall, they simply throw out the product. In other cases, affected food products that are returned, either from retailers or from distributors or consumers, will ultimately be disposed of if we help companies really find a way to either reuse the product to reduce waste and thereby obviously reduce cost. In the case of food products, they may be used to create feed for livestock or ethanol for fuel, or we will just destroy them, especially a perishable item. But there are other food, like a canned good, that due to FDA regulation, they might be sitting on our shelves for 10 years. So we obviously do have the facilities to handle that type of storage, if you will. But a lot of times we'll destroy the food or we'll find a way to reuse it in some form or fashion whether that can go into, I gave the ethanol fuel example. It just depends what the food is and what the contamination or recall is.
Food Dive: How are you working with food companies even if they haven’t had a recall?
Good: We spend a lot of time talking with companies around those five and obviously the first one that I mentioned, preparation, on that one we spend a lot of times with companies that might not have ever had a recall. So if you and I start a company tomorrow and we build a product and we ship it out, a food product, we aren't necessarily thinking about how to go get that product off the shelf if something goes bad. So we'll go into a company that might not ever have a recall or might not have had one for a few years and work with them on really two fronts. The first is really talking about their standard operating procedures, their SOPs, meaning if and when you ever have to pull that fire alarm for a recall, what are the procedures, who are the people that are going to take ownership of certain parts of that recall.
The second one, which has become really popular, is doing mock recalls. So we go into a lot of companies and we'll actually trigger a fake recall just so that they can actually go through the motions. We'll take them through a mock recall so that if and when they ever do have to have that type of event, it won't be a new experience for them. They will have at least gone through a couple practice rounds.
Food Dive: How do you do a mock recall?
Good: Bacteria contamination is the No. 1 driver so we would probably do something along that. The leading cause of FDA recalls is bacteria contamination. So we might go into a company and say, ‘Okay, just yesterday …’ And this is all in a mock scenario … 'Yesterday it was announced that you have four million affected units of product out in the marketplace for bacterial contamination that we have to go get. So we're going to take you through the stages of exactly what happens. Right now, starting day one of that recall." And that's where it gets into being able to ramp up really quick. If you and I hang up this call and a company calls me today and gives me that in real life, we will literally be on the phones tomorrow taking calls about that product and already have communications sent out tomorrow to the affected parties and trying to identify them. So it moves that fast and I think with food recalls especially, speed is of the essence and you can't discount the importance of speed.
Food Dive: Are companies not prepared for a recall or is it a complicated regulatory system that’s difficult for them to navigate?
Good: I think it's probably a little bit of a marriage of both. There's a little bit of the 'That'll never happen to us' syndrome. That probably does exist. But I would say with food specifically, if you just look at the advancement in testing that has occurred over the past decade or even over the past three to five years, the testing now is exponentially more intense than it ever was. So they are aware of that and companies are saying, 'Okay. We really should take this seriously because now our food is getting tested in ways that it's never been tested before.' Because of that, the room for something to go wrong, or the room for error expands. It becomes exponentially greater. So I wouldn't say that they are burying their head in the sand like they maybe have been historically, but it is something that we are still having to educate a number of companies on the recall process because they've had the good fortune of never having had to go through it and obviously, it's like an insurance policy. You hope you never have to file a claim, but you want it there.
"Everything hits the press now and is immediately digested through all the different modes of social media and communications. And so that has really sped up the priority list where maybe a decade ago, you could have taken a slower approach to going out and getting that affected product."
Food Dive: What’s the importance of protecting a company’s brand?
Good: We take great pride in two things. No. 1, we want to help our clients protect their consumers. No. 1. And that trumps everything else. But No. 2, we want to help our clients protect their brand. That's vitally important for us to help companies be able to rebound because no matter how you shake it, a recall is perceived as a negative situation so we have to help our companies protect their brand and a lot of the ways we do that is by helping them do so in a highly efficient manner and get into those, what I was calling earlier those recall reflexes. Just being able to do that better than anyone else.
Food Dive: How have things changed in food recalls?
Good: I will tell you the things that we've seen change the most is the advancement in testing and the consumer knowledge base around recalls. You hear the statement the world is so much smaller as a result of technology. Everything hits the press now and is immediately digested through all the different modes of social media and communications. And so that has really sped up the priority list where maybe a decade ago, you could have taken a slower approach to going out and getting that affected product. But now it's so pervasive in the press and in the social media landscape that we all live in, that companies have to react efficiently and effectively.
So that's one big one. The other one, as I also spoke to earlier, has just been the advancement in testing. So they're finding problems in food now that they weren't ever able even to diagnose just a few years back because the technology and the advancements and the sciences behind the testing just didn't exist. So those are two big drivers, definitely. Technology, social media, advancements in testing have all brought this more to the forefront. When I was a kid, nobody was talking about recalls unless it was one enormous recall that affected the globe, so to speak. Now we can turn on the news on any given day and probably hear about a recall of some kind.