2016 was another eventful year for the food and beverage industry. From the farm … through manufacturers, processors, packers, distributors, transportation, foodservice and retail … to the table, the industry was affected by the first of the finally effective Food Safety Modernization Act (FSMA) rules and all that came with that, plus ongoing recalls and their ever-increasing impact of consumer-driven initiatives and posting/tweeting/liking/pinning.
There were, thankfully, a few positive aspects of the year as well. Following is our Top 10 food safety issues of 2016:
FSMA: With the seven major final rules finally published and the first compliance dates coming around, it seems as though many companies still don’t know if they fall under certain parts of the new FSMA ruling. This is especially evident with the Sanitary Transportation Rule, published in April. We have heard several people say that their company doesn't fall under the rule, when, in fact, the company will be held to compliance. Even for those who understand they must comply, it's often a dilemma as to who is responsible for what and how to manage the responsibilities. From an enforcement perspective, FDA was still ramping up in 2016 – but more to come on that in 2017.
Environmental Testing and Whole Genome Sequencing: Another challenging aspect of the new FSMA rules is that of the Preventive Controls' requirements for environmental monitoring programs (EMPs) and FDA's related inspections. FDA is using whole genome sequencing -- should industry? If so, when? What should a facility do when the FDA identifies a resident organism? During 2016, EMPs became more of a factor beyond that of a written document and an ongoing activity. And we fully expect that these will be even more relevant in 2017 as companies large and small comply with new regulations. Whole genome sequencing technology really took off in 2016 with the regulators who are now linking environmental positives in your plant from years back with illnesses occurring today. Such observations may not mean you were responsible but it does mean a visit from FDA with a bag of swabs to see if the strain is still there; and if it is, watch out!
USDA-Regulated Facilities: It wasn't just FDA facilities that faced new requirements. In finalizing its new federal standards to reduce Salmonella and Campylobacter in poultry, USDA announced it would begin posting information online about individual companies’ food safety performance. Additionally, the focus on antibiotic resistance took a global turn with world leaders meeting at the United Nations General Assembly in New York in September to commit to fighting antimicrobial resistance together. A number of U.S. companies committed to producing or selling antibiotic-free meats in the coming years.
Recall Dollars and Cells: The dollar-value consequences of recalls continued to be brought to light through the year. 2016 became a game-changing year for the foodservice segment as the focus shifted to “How do we make sure we are not the next to be in the news?” If that weren't enough, the year saw a spate of activity from the Dept. of Justice (DOJ) in regard to investigating food safety activity at a number of companies. It became very serious business and a trend that we don’t expect to slow down any time soon. The wave began with the Peanut Corp. of America executive prison sentences and is continuing with the DeCoster jail sentence appeal for adulterated eggs, which could end up at the Supreme Court. Even small companies are feeling the effects, as DOJ's involvement in a 2014 shutdown of Roos Food in Delaware brought about the 2016 plea of guilty to the federal criminal misdemeanor of food adulteration and a $100,000 fine.
No One Is Immune: It's not just the facility where the contamination is detected that gets hit with recall impacts – a recall can impact the entire related supply chain. There were a number of smaller companies that were affected by a recall of a larger company. It shows that no one is immune from the effect of a recall with a huge corporate company; supply chain decisions apply across the board. And to bring FDA's environmental testing back in the picture: Major recalls resulting from FDA's facility swabbing and testing affected those downstream – from frozen vegetables and flour to powdered milk and sunflower seeds. The lesson: If you think purchasing product from a large corporation means it will be safe, think again. That theory doesn’t necessarily hold up. The link can be broken anywhere in the supply chain, so you have to be always aware, continually monitor your options, and move quickly to assess your supply chain and take action when something is detected.
A Decline in Self-Insurance: Because of all this, self-insuring became much rarer as the effects of a full-blown recall were shown to have devastating financial and litigation consequences. Even corporations with deep pockets need to take a serious look at recall insurance. We've heard comments such as "They won’t have to worry about a recall because they have deep pockets." But, in today's world, deep pockets can’t save a company's brand name, and there can’t be many companies who can actually afford the millions in lost revenue that can come with a huge recall. Whether or not the increase in recalls actually equates to worsening food safety or simply the ability detect ever-lower, the escalation of recalls with global impact is greater than ever before, so insurance is not just prudent, it’s vital.
Media and Social Media: Negative media coverage has always been an issue for this industry, but the increased social media of recent years continues to add its impact. It isn’t simply a fad as some people suspected, it’s here to stay. So it is critical that you make sure your story is a good one, and that you get your story out there yourself, not only for FDA and your customers, but also to counter would-be "haters" on Facebook, Twitter, Instagram … where things can go to pieces fast. When Myspace started in 2003, everyone said it wouldn’t last. It didn’t – it was, instead, overtaken by the more sophisticated Facebook which has continued to evolve like a tween into a young adult. The fastest growing demographic on Facebook now is women 50+ – sometimes just to see pictures of their grandchildren, but often to be informed of news items and friends' posts with their versions of news. This is important, because this demographic is also the biggest purchaser of food and everything else.