The True Cost Of Product Recalls – And How To Avoid Them
Product recalls can have a devastating impact on your company, and they’re on the rise. According to Allianz, the average cost of a food recall is £312,000. And, with more than a quarter of recalls due to foreign matter contamination, it’s crucial to ensure you have the right equipment to identify and remove contaminants.
- 27% of product recalls are due to foreign matter contamination.
- Average cost of a food product recall in the UK is £312,000.
- Product recalls rose by 65% between 2011 and 2015.
- Recalls increased by 12% in last quarter of 2016.
The true cost of recalls
From metal in Morrisons Trimmed Beans to blue plastic in Waitrose Hearty Minestrone Soup, a quick glance at the Food Standards Agency website reveals a plethora of recent product recalls due to foreign matter contamination.
Consider the practicalities of dealing with a product recall and you’ll immediately think about the costs you’ll incur. You’ll need to assemble a crisis team and notify regulatory bodies and relevant members of your supply chain, not to mention retrieving and destroying the product and investigating the cause of the contamination.
However, these immediate costs are just the tip of the iceberg. Of far greater significance in the long term is the damage to your business’s reputation.
News of a recall spreads like wildfire over social media, and you’re likely to face a reduction in sales and a loss of confidence in your brand. Indeed, according to a Harris Interactive poll, a huge 55% would switch brands temporarily following a product recall, while 21% said they would avoid purchasing any brand made by the offending manufacturer.
Compounded by fines and litigation costs, damage caused by failing to identify a contaminant in one of your products will be felt long after the event itself, with stock value, sales and share prices plummeting.
How to protect your business
Advances in technology mean that product inspection systems (like the ones available from Sparc) can operate both swiftly and accurately. Use the right inspection equipment – and have stringent processes – and the power to avoid the product recalls caused by foreign matter contamination is in your hands. Here’s how:
- Prioritise complete traceability throughout your supply chain – know where your raw materials come from and what steps your suppliers take to avoid cross contamination.
- Use high quality X-ray and inline metal detection equipment to ensure that your products aren’t contaminated with metal, glass, bones, plastic or teeth.
- Ensure that all production equipment – including your inspection systems – have a hygienic design to aid the cleaning process.
- Avoid recalls due to inaccurate labelling by using a vision inspection system.
- Keep up-to-date with the latest industry regulations – and ensure that all your processes are Hazard Analysis and Critical Control Points (HACPP) compliant.
Protecting your business against product recalls takes an investment in terms of both time and effort, as well as the obvious financial cost. However, it’s the most effective way to avoid damaging product recalls and maintain the reputation of your business.