Can you afford to be non-compliant?

The real cost of poor hygiene practices in food manufacturing

The food industry is arguably the sector most susceptible to damages caused by a breach in hygiene protocols and the costs reach far beyond damage to stock. Rentokil Initial explains the real cost of poor hygiene practices in manufacturing facilities.

The cost of product recalls

Product recalls are a major threat to any food business. They disrupt operations and cost the business time and money. Then there is also the indirect cost associated with reputational damage: the loss of consumer trust can result in significant long-term financial losses. For example, one of South Africa’s biggest food businesses issued a recall of certain canned foods in July 2021, and the cost to transport, store, and dispose of the affected cans alone was estimated to cost them around R650 million. This includes the cost of the recalled stock being written off, but doesn’t even begin to qualify the reputational damage done to the brands concerned.

The 2017 - 2018 listeriosis outbreak caused by contaminated cold-meat products cut the responsible food production group’s operating income profit by R425 million, and the company’s chief executive put the total costs of recalling the meat products at an additional R430 million.

The effect on consumers is possibly the most significant factor. A survey by Harris Interactive found that 15% of consumers would never buy a recalled product again, and 21% of people at the centre of a recall would not buy any product from the same manufacturer again.

Causes of food product recalls

The most common cause of food product recalls is biological contamination by microorganisms and toxins (for example Salmonella, Listeria and E.coli), which can occur at any stage in the supply chain, and which mainly affect food which is supplied fresh or raw.

Biological contamination can have many causes, including the use of contaminated water by a producer, personal hygiene breaches and unsanitary food handling practices, and pest infestations along the supply chain.

Rats and other pests carry pathogens that are potentially life threatening, such as Salmonella – outbreaks which usually cause large food recalls. Stored product insects (such as weevils and beetles) are also responsible for a number of recalls in grains, cereal and dried food products.

Types of food products recalled

Raw foods are a major source of contamination leading to product recalls because they don’t go through the sterilising phase of cooking. Consumers, therefore, rely on safe practices along the supply chain to ensure food safety. Nuts, fruits, vegetables and dairy products are some of the major product types to be recalled.

The direct costs of a food recall include:

• Assembling the crisis team

• Removal of the product from market

• Issuing notifications to regulatory bodies, affected businesses and consumers

• Collecting the product from warehouses, retailers and consumers

• Storage of the recalled product and destruction

• Investigation of the root cause of the recall

• Managing the PR to protect the business reputation.

Rentokil Initial has a range of solutions to help reduce food safety risks at all stages of the supply chain.

Indirect costs of a food recall

Indirect costs are often difficult to measure. For example, there may be no certainty that a reduction in sales or profits was caused by a recall. However, the effects of reputation damage and brand avoidance by consumers can last for years. In some cases a whole industry can be affected by a food recall by one supplier or manufacturer.

Indirect costs of a food recall include

• Litigation costs, prosecution or fines from government agencies

• Lost sales

• Decline in value on the stock market

• The negative impact on brand reputation.

Prevent product recalls

The main way to prevent contamination is to implement strict hygienic protocols to prevent cross contamination, such as:

• Implementing strict pest control measures to deny harbourage (nesting). Prevent entry to buildings (proofing) and prevent access to food and water

• Ensuring there are proper hygiene protocols in place for equipment and surfaces as well as the personnel handling food.

• Preventing the growth of microorganisms by temperature and moisture control through adequate ventilation

• Implementing processes to prevent cross contamination between raw and cooked or fresh products.

Rentokil Initial has a range of solutions to help reduce food safety risks at all stages of the supply chain by preventing contamination through pest control and maintaining high levels of hygiene. •

Rentokil Initial – www.rentokil.co.za