Are You Recall Ready? How to Get Prepared

How food manufacturers can effectively mitigate the risks and impact of food recalls.

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Recall is one of the most dreaded words for a food manufacturer. According to the Grocery Manufacturers Association, a food recall in the United States costs a manufacturer on average ten million dollars in direct costs, including the costs of retrieval and disposal of the contaminated food products. Food recalls also often result in indirect costs such as lost revenues, distracted management, sunk production costs, and potential liability to customers and other third parties. In addition to these direct and indirect recall costs, the impact to your brand and reputation can be immeasurable.

While recalls can be quite disruptive to a business, food manufacturers can effectively mitigate the risks and impact of food recalls through advanced preparation and planning. The Food and Drug Administration has recently issued guidance to aid companies in their recall preparedness and to encourage them to develop compliant and effective recall plans. While the FDA’s guidance document does not establish legally enforceable responsibilities, it does provide an excellent framework on which to build an effective recall plan.

What Kinds of Recalls Can Occur?

A food recall focuses on the removal of adulterated or mislabeled products from the marketplace to ensure the protection of public health. A food producer can voluntarily initiate a recall, or the FDA and the U.S. Department of Agriculture can mandate a recall if the food producer fails to do so. Most recalls in the U.S. are voluntary, and most food companies will initiate them as precautionary actions to proactively protect consumers from a potential risk of exposure to contamination. 

The FDA and the USDA have established classification regimes for recalls. The USDA uses a three-tier classification protocol – Class I, II, and II, and the FDA has four classifications – Class I, II, III and market withdrawal. The Classes operate as follows 

  • A Class I recall is when there is a ‘reasonable probability’ that the product will result in serious health consequences or death. 
  • A Class II recall is for when exposure to the product could cause significant injury or temporary illness.
  • A Class III recall is where exposure to the product is unlikely to cause injury, but the product violates FDA or USDA regulations.
  • A ‘Market Withdrawal” is for when a product has a minor violation that would not be subject to legal action by the FDA, or which involves no violation, but the company is pulling the product back for other reasons.

To protect the public, the FDA has asked companies to initiate voluntary recalls as soon as they identify a potential issue instead of waiting for the results of an investigation. This includes promptly notifying all suppliers, distributors, and other supply chain participants to further aid in keeping the affected product out of the hands of consumers. The message is clear – in a recall reaction time is critical and can be the difference between life and death.

How Can We Get Prepared?

The first step is to familiarize yourself with the requirements to conduct an effective recall. The FDA maintains extensive guidance on recall procedures. Getting a full understanding of the necessary steps and procedures of a recall will help you effectively prepare for one. Most food producers have a hazard control program in place, such as the Hazard Analysis Critical Control Points (HACCP). Your plan for managing the impact of a food recall should be part of it. 

The FDA recommends that firms take some key steps in preparing for a recall, including: 

  • Establish a Recall Team. 

This includes identifying the right personnel who will be assigned recall responsibilities and will be empowered with the authority to take all necessary steps to implement the recall. Often, a helpful step is to deputize a team member to lead the recall effort and coordinate the activities of each member of the recall team. Food producers must also ensure that recall team members are properly trained on a regular basis, so they are up to speed on the recall procedures they will need to perform. 

  • Prepare a Communications Plan. 

A well thought out communications plan is critical to a successful recall. The FDA recommends the plan focus on internal communications, communications with the FDA, and communications with customers or the public. A food producer should consider designating key points of contact for each of these communication streams and consider drafting and maintaining communication templates to aid in prompt and accurate communications. Creating a recall letter template will also expedite the communication of the recall to customers.

  • Identify Reporting Requirements. 

You can choose to remove or correct a distributed product for any reason and under any circumstance. However, if you initiate a recall because you believe the product may be in violation of laws and regulations, you are required to immediately notify the appropriate federal, state, and local agencies. Once you announce a recall, the FDA will need you to provide specific information about the violation, so it can review the situation and assign the appropriate recall classification. 

  • Maintain Records and Assign Adequate Product Coding. 

A key component to a successful recall is having proper product coding and accurate and accessible records. Product codes will allow a firm to correctly account for the affected product and will aid the consumers to determine if they have affected product in their possession. Many modern enterprise resource planning systems support the recall process with enhanced record keeping capabilities, which allows for improved traceability of the affected food product. 

  • Test Your Plan. 

You should routinely practice executing your recall plan, and you should consider conducting regular internal food safety audits, so your team is ready to jump into action in the event of a real recall. Mock recalls can help test your program and highlight any areas for improvement. Also, the FDA recommends establishing metrics or key performance indicators against which the firm can measure the performance of the recall process.

What Do We Do If We Need to Conduct a Recall?

If you find yourself in a recall, you should immediately cease additional distribution and shipment of the impacted product. You should promptly assess the risk, scope, and severity of the issue. You are also required to initial a recall pursuant to an approved recall strategy. The strategy should consider the results of any health hazard evaluation, the ease in identifying the product, degree to which the problem with the product is obvious to the consumer, how much of the product remains in the marketplace, and the continued availability of critical products. 

While the FDA must ultimately approve the recall strategy, you should not delay initiating the recall will the review is pending. Often time becomes a critical factor in an effective recall. Placing an immediate hold on potentially affected product and tracing it to its source will allow the recall team to mitigate damages. When communicating with the FDA on any recall matters, it is highly advisable to engage an attorney well-versed in food safety law and the rules and regulations of the FDA to ensure you provide the appropriate information to the FDA and avoid inadvertent mistakes or miscommunications that could result in additional liability.

Because time is often so critical in a recall, a well thought out recall plan will aid in the rapid enactment of the recall and assist in capturing all affected products. Proper preparation for a recall also helps minimize business disruption and can avoid lengthy delays. While the costs of a recall can be quite high, a well-organized recall plan can help reduce those costs and help a firm mitigate liability and maintain its reputation among customers.

Michael Delaney is a partner at Seyfarth Shaw LLP in Atlanta.

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