Farm to Fork: Recalls Raise Fear on Food Safety

Following the pet food and Chinese wheat gluten recalls earlier this year, and those stemming from the spinach fields of California, recall headlines seem bigger and more frequent. Recently, Dole recalled packaged salads, contamination of 21.7 million pounds of hamburger patties forced Topps Meat Co. out of business after 67 years in the industry in early October and soon after, Kraft Foods recalled their white chocolate baking squares.

Should one no longer take for granted the safety of the food bought from a neighborhood grocery store? Or, should one count on “the system” to safeguard consumers?

Perhaps both?

With the growth of a massive food industry bringing ingredients from around the world to the local dinner table, opportunities for contamination, whether willful or through mishap, have multiplied. As consumers, we can be grateful for the behind-the-scenes industry regulations that monitor and dictate the decisive action leading to many of these recalls. These activities by the U.S. Food and Drug Administration have long gone on, but have become more prominent in the glare of the media’s persistent focus.

As food moves from farm to fork, its scrutiny has never been more intense. This post-9/11 environment raises concerns about bio-terrorism, leading to the development of new regulations, analytical software tools and food handling procedures. The claims industry, with its broad overview of food industry conditions and practices, plays a pivotal role in helping businesses adopt defensive strategies that will protect not only consumers but the businesses themselves.

Although each segment of the food industry has its own issues and protective measures, the broad outline of an effective safety strategy has four components. Think of them as the four Rs.

Regulatory Compliance. Know the regulations established for your food product. In large segments of the industry, with active trade associations providing resources and analysis, information is easily accessible. The American Institute of Baking and Silliker, are just two among numerous third parties that offer auditing, technical services, and training for staying in compliance with regulations. In addition, the FDA’s web site (www.fda.gov) is a rich treasure trove of information and statistics.

Regulatory compliance is more challenging, however, when the business merely plays a pass-through role. Distributors who import food items and perhaps do little more than repackage bulk purchases into retail-size containers may be less familiar with the stringent regulations keeping food safe. Sometimes an importer/distributor may never see the actual product, serving only as a paper-pushing operation to transfer ownership. Thus making it even less likely they will be familiar with the government regulations and industry expectations critical to defending product-related claims or to conducting a proper recall.

Understanding the many government regulations and industry best practices is a critical first step to staying out of trouble.

Risk Assessment. Know the exposures you face. A company may be taking a raw product from the field, like lettuce, and rushing it to consumers while it is still fresh. Or it may be bringing together dozens of ingredients and “manufacturing” them into a final product like cereal. Whether simple or complex, each business has a process with multiple steps. Each step is an opportunity for things to go right — or for mistakes to occur.

Since the 1990s, the FDA has worked–food segment by food segment–to establish the seven-point Hazard Analysis and Critical Control Point (HACCP) as a standardized approach to risk assessment (http://www.cfsan.fda.gov/~lrd/haccp.html). As the name suggests, the HACCP program begins with an analysis of possible hazards and the identification of critical control points where the hazard can be controlled or eliminated. The remaining five principles are: establish critical limits for each critical control point, monitor to ensure that the limits are met, implement necessary corrective actions, establish record-keeping procedures, and create a verification process to ensure that the first six principles are carried out.

More recently, the FDA developed a prioritization tool to help identify vulnerabilities within systems. CARVER+Shock is software that assesses; Criticality: the potential health and economic impact of a problem. Accessibility: how easy it is to access the target. Recuperability: the ability for the system to bounce back. Vulnerability: how easy it is for an attack to succeed. Effect: the amount of loss. Recognizability: how easy it is for someone to identify the opportunity.

The seventh attribute, Shock, refers to an assessment of the combined health, economic and psychological impact of an attack. This software is available at www.cfsan.fda.gov/~dms/carver.html.

In addition, many industry groups provide third-party assessment of practices and recommendations for improvements. While some may be costly, a company can find many less expensive ways of assessing risks, including consulting with an insurer’s risk control experts and taking advantage of the FDA’s free resources.

Relationship Development. Know your partners. Although your standards for food handling may be above and beyond requirements, what happens to the ingredients before they come to you can be a critical factor.

A voluntary recall of a cocktail garnish in August came about after the provider of one of the spices in the product notified the food maker about the presence of salmonella bacteria in the spice. Because of the close working relationship between the two companies, swift action was taken. But sometimes the early steps of the food supply are unknown to the product maker, especially if they involve foreign companies.

There are several steps companies can take to protect themselves. Requiring sample testing and obtaining copies of test results with each shipment is just one way to help confirm shipments are free of bacteria and foreign objects. This puts responsibility on the supplier to do the right thing, although it is not a fool-proof guarantee.

In addition, follow good risk management practices by obtaining Certificates of Insurance from suppliers. Companies that are acting strictly as a pass-through should try to obtain Additional Insured/Vendors coverage. This strategy can go a long way to help defend or minimize potential claims.

Companies taking steps to ensure their product specifications are met by every supplier (and by each supplier of those suppliers) are in a better position to guarantee the safety of their products.

Reactive Plan. Know what to do when the worst happens. Despite every proactive step taken, things may still go wrong. At that point, have a plan in place to handle corrective measures, recall processes and reputation management. With the New York Times, CNN and Claims Journal on your doorstep, there is little time to develop a strategy that will position your company as a responsible corporate citizen. Brainstorm and develop a formal policy ahead of time about how to handle situations, what resources you will tap into, and who will take the lead on addressing the outside world.

The four Rs present a simple framework to help companies focus on the priority actions they should be taking to ensure food safety (of course, it is also important for companies to follow the specific advice of their own internal risk managers and legal counsel, who are in the best position to be familiar with their industry segment’s requirements). By helping companies create an effective risk management plan, those in the claims industry can take a leadership role in protecting consumers and businesses, and in keeping food safe from farm to fork.

Bios:
Ed Creedle, risk control consultant for food safety, Travelers.
James DiVirgilio, vice president of claims services, Travelers.

Online Resources
The FDA’s database of recalls illustrates how frequently food safety issues arise. Here are some web resources for understanding the state of our food today:

The FDA’s Enforcement Report Index lists recalls:
www.fda.gov/opacom/Enforce.html

Import issues by both country and product:
www.fda.gov/ora/oasis/ora_oasis_ref.html

Statistics on importing and exporting:
http://tse.export.gov/ITAHome.aspx?UniqueURL=xbfiyu454eh1bo455xz44e2f-2007-10-1-14-34-50

Recall guidelines and database of recall press releases:
www.fda.gov/ora/compliance_ref/recalls/recallpg.html