Susanne Kuehne, Decernis
Food Fraud Quick Bites

Is Justice Being Served for Food Fraud?

By Susanne Kuehne
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Susanne Kuehne, Decernis
Decernis, food fraud
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

Organized crime in Europe has found a new money making machine by engaging in food fraud, which often goes undetected and is relatively low risk compared to other criminal activities. Opson, an Europol-Interpol joint operation, confiscated 16,000 tons of fake food items and 33 million liters of fraudulent beverages in 2018, a new record, but also probably just the tip of the iceberg. Government agencies do not have the resources to detect all fraudulent activities, and suspected food fraud cases moving through the federal and local government hierarchies is a long and cumbersome process.

Resource

Simon Bock (July 8, 2019). “Die erschreckende Machtlosigkeit der Lebensmittel-Waechter”. Wirtschaftswoche. Retrieved from https://www.wiwo.de/unternehmen/handel/lebensmittelkriminalitaet-die-erschreckende-machtlosigkeit-der-lebensmittel-waechter/24529998.html

 

Susanne Kuehne, Decernis
Food Fraud Quick Bites

More Sugar, Not So Much Honey, Honey

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food Fraud, Decernis, Bee, Honey
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

Food safety and food labeling are strictly regulated in Canada and therefore, honey adulterated with sugars labeled as genuine is considered fraudulent. The Canadian Food Inspection Agency (CFIA) investigated Canadian honey samples from various sources within the supply chain, such as importers, blenders, retailers and more. Almost 22% of imported samples were adulterated with added sugars, the domestic (Canadian) samples showed no adulterations. The CFIA will continue monitoring honey imports and take measures to avoid fraudulent products entering the Canadian market.

Resource

  1. Canadian Food Inspection Agency (July 9, 2019). “Report: Enhanced honey authenticity surveillance (2018 to 2019)”. Canadian Food Inspection Agency. Retrieved from http://inspection.gc.ca/about-the-cfia/science/our-research-and-publications/report/eng/1557531883418/1557531883647

 

Susanne Kuehne, Decernis
Food Fraud Quick Bites

Good Coordination Catches the Worm

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food fraud, apple worm, Decernis
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

An organized crime group produced and traded rotten and adulterated apple products labeled as organic. The food and beverage items, which were not suitable for human consumption, were worth several million Euros. A transnational investigation, coordinated by Eurojust, led to several arrests in Italy and Serbia and the confiscation of millions worth of illegal assets.

Resource

  1. Ton van Lierop. (July 1, 2019). “Eurojust helps reveal fake organic food fraud”. Eurojust, the European Union’s Judicial Cooperation Unit. Retrieved from http://www.eurojust.europa.eu/press/PressReleases/Pages/2019/2019-07-01.aspx
Karen Everstine, Decernis
Food Fraud Quick Bites

It’s All About the Supply Chain

By Karen Everstine, Ph.D.
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Karen Everstine, Decernis

I recently attended two webinars that highlighted distinct perspectives on two challenging aspects of food fraud prevention. First, Chris Elliott from Queen’s University Belfast discussed the current situation with meat fraud. He cited his “top three” fraud-prone foods as meat, olive oil and honey. While we cannot determine the true scope of food fraud globally, looking at the data we have collected from the past 10 years, meat is also in our “top three.”

Commodities, food draud, Decernis
Top 10 Commodity Groups. Source: Decernis Food Fraud Database

Meat is prone to fraud in many ways, including misrepresenting the animal species, fraudulent labeling of production practices (organic, kosher, halal, etc.), the use of unapproved additives, the addition of non-meat-based protein ingredients, and misrepresentation of geographic origin (among others).

Elliott discussed some of the reasons that meat is prone to fraud, which included the fact that the industry is highly competitive, relies on low profit margins, and the supply network can be complex. Discussing specifically the horsemeat scandal in Europe a few years ago, he cited the “mess of subcontracts” involved in the adulterated meat, which were based primarily on price. He finished his presentation by noting that certain aspects of meat authentication are still challenging from an analytical perspective, such as ensuring country of origin and verifying the claims about animal feed consumption.

The final in a series of food fraud webinars sponsored by the IAFP Food Fraud Professional Development Group (PDG) focused on another aspect of food fraud: E-commerce. One of the big challenges with food fraud is the intentional nature of the crime, which can make anticipation of adulterants and fraud methods difficult.

GFSI has stated “any plans and activities to mitigate, prevent or even understand the risks associated with food fraud should consider an entire company’s activities, including some that may not be within the traditional food safety or even HACCP scope, applying methods closer to criminal investigation.” This is particularly true for fraud involving intellectual property (IP) infringement, which adds another layer of complexity to detection and prevention strategies. We have more than 200 records documenting fraud involving “counterfeit” products. Counterfeit products are a problem both because of the IP infringement and because, often, the actual contents of the product cannot be verified. Many of the records we have documented involve counterfeit vodka, whiskey, and wine, as well as non-alcoholic soft drinks.

As part of the IAFP webinar, Axel Hein from ApiraSol discussed their work using global customs data to detect counterfeit products, so-called “fantasy trademarks,” and geographical indication infringements.

Global customs data, food fraud
Slide used with permission from ApiraSol

Many countries provide public access to customs data which, when aggregated and combined with other sources (such as Alibaba transactions), allows mapping of supply chains and detection of unusual patterns that may indicate fraud. In school, I spent many months digging through U.S. customs data trying to uncover patterns that might indicate fraud, so I was very interested to see this being done on a larger scale.

Although each webinar was distinct in its focus, each highlighted the importance of supply chain control and monitoring in mitigating food fraud risk. To paraphrase a point made by Elliott, each arrow in a supply network is a potential vulnerability. The continued globalization of the food supply requires new and innovative ways to reduce these supply chain vulnerabilities.

Daniel Erickson, ProcessPro
FST Soapbox

Establishing Preparedness Initiatives to Mitigate the Effects of Recalls

By Daniel Erickson
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Daniel Erickson, ProcessPro

Despite manufacturers’ best intentions to provide safe products for consumers, notifications about recalled products appear in news headlines with increasing regularity. The CDC reports that each year, 48 million Americans experience foodborne illnesses, resulting in a reported 128,000 hospitalizations and 3,000 deaths. Behind these statistics are recall trends that can lead to operational and financial instability, and a loss of reputation for companies in the marketplace. Proactive measures and tools adopted by experienced food and beverage manufacturers can help mitigate the potentially harmful effects of these product recalls by establishing preparedness initiatives.

Recall Essential Facts

A recall is defined as a request for the return of a product from the market due to a defect or safety concern resulting from a variety of issues including improper labeling or contamination, which places the manufacturer at risk of legal action. Product recalls can be issued by either the manufacturer or a governmental agency, but it is the sole responsibility of the company to properly recall and notify consumers of unsafe products. Recalls are categorized as either voluntary or mandatory, with the majority falling under the voluntary classification. In the case of a voluntary recall, a manufacturer has greater control over the process with less stringent procedures, review and paperwork. While both have the same potential for negative effects and significant legal costs, a voluntary recall is preferred by manufacturers. Implementing an industry-specific ERP solution with a documented recall preparedness plan and mock recall capabilities provide the necessary tools for either scenario, as recalls are inevitable in today’s manufacturing environment.

Recall Trends

In the USDA- and FDA-regulated markets, comparatively, there have been a slightly higher number of recall incidents in the beginning months of 2019 versus 2018. Mispackaging is identified as one of the primary recall issues, involving packaging a finished good into the wrong container. Another trending recall cause involves not properly identifying an ingredient on the packaging label. Both of these manufacturing errors resulted in the labels not providing an accurate reflection of the product, which could be potentially harmful to consumers if the undeclared ingredient(s) include one of the common allergens. Well-documented and properly executed internal manufacturing processes, in addition to an automated ERP solution, create checks and balances and assist in generating accurate, compliant packaging and nutrition fact panels to meet the requirements of consumers and regulatory bodies.

A third recall trend of 2019 is being driven by consumer complaints in regards to foreign materials such as metal fragments, plastics or rubber pieces in finished goods. This is caused by incomplete testing, lack of or faulty material detection equipment, including metal detectors, x-rays and other devices used during manufacturing. Due to an increasing number of these types of incidents, the USDA has issued a guidance document requiring manufacturers to maintain updated documentation of their internal procedures in their hazard analysis and critical control point (HACCP) plan. This guidance necessitates follow up with federal inspectors regarding any adjustments made to the plan. HACCP information recorded within an ERP solution helps to identify and control potential hazards before food safety is compromised—providing quality, consistent and safe consumables for the public.

Progress towards fewer FDA food and beverage recalls continues due to an increase in FDA inspections as well as manufacturers’ success in proactive measures to stay abreast of FDA requirements. However, bacterial pathogenic concerns including Listeria, Salmonella and E. coli continue to be prevalent recall culprits. This has resulted in the FDA utilizing the Whole Genome Sequencing (WGS) Program in an attempt to protect consumers from foodborne illness. By swabbing manufacturing environments and sending samples to WGS, the DNA strains are documented in a centralized public database—holding manufacturer’s accountable for processing and sanitation control. When an outbreak occurs, the database is able to locate possible matches that help health officials identify the source of contamination, and stop outbreaks more quickly, thereby avoiding additional widespread illnesses. As the database grows in size, so will the speed of investigations to determine the root causes of illnesses. This program has the potential to not only stop outbreaks from spreading but also includes proactive applications for increasing the safety of the food and beverage industry as a whole.

ERP’s Role in Recall Preparedness

An industry-specific ERP’s real-time forward and backward lot traceability, detailed record keeping, allergen/attribute tracking and efficient, documented processes support end-to-end recall management functionality to maintain compliance. With preventative measures such as establishing supplier relationships, conducting quality control testing and documenting quarantine procedures, an ERP solution works to identify gaps and prevent future recalls. Accurate product labeling is one of the key factors of recall prevention and food and beverage ERP software handles the intricacies of packaging and label creation, such as ingredient and allergen statements, nutrient analysis, expiration dates and lot and batch numbers—creating an audit trail that allows items to be located promptly in the event of a recall. As part of a sound food safety plan, mock recalls conducted regularly encourages familiarity with internal recall processes, as well as allows for adjustments to be made as needed. With a comprehensive ERP to generate lot tracking reports, manufacturers are able to identify and locate contaminated products in order to notify clients, vendors, consumers and government agencies quickly in the event of a recall—helping to minimize harmful effects in the marketplace as well as legal action.

The trends identified in recent recalls issued by the FDA and the USDA, thus far in 2019, demonstrate that manufacturers need to be proactive in how they respond in order to mitigate the detrimental effects that recalls can have on companies and to public health. With the increasing scrutiny from the FDA and USDA, along with an aware consumer base, it’s important for forward-thinking businesses to address the eventuality of a product recall with sound food safety and HACCP plans and an industry-focused ERP software solution that promotes, supports and helps manage preparedness and responsive action, if needed.

Alec Senese, Bayer Crop Science, Digital Pest Management
Bug Bytes

Are You Rolling Out the Rodent Welcome Mat?

By Alec Senese
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Alec Senese, Bayer Crop Science, Digital Pest Management

Register for the complimentary webinar: Pest Management, Accountability and Food Safety: How to Get the Best from Your Service Provider | September 10, 2019 | 12 pm ETRodents are intelligent creatures. Luckily, no matter how smart they get, their goals remain the same. Like any animal, rodents are primarily after three things: Food, water and harborage. When going about your day-to-day activities, it is important to assess your facility with these three things in mind. Consider how conducive your facility is to rodents in each of the following related areas.

  1. Easily accessible raw food waste: If food is available and unprotected, rodents can feed off of the raw food waste and populations can grow. Ensure any stored food sources are sealed and inaccessible, minimize exposed food as much as possible and attend to spills and standing water immediately.
  2. Clutter and inaccessible areas: Rodents look for undisturbed areas where their populations can grow. In a rodent-infested grocery store in Chicago, rodents were found in the wall voids, gaps inside shelves and in quarter-sized (or larger) cracks in concrete floor underneath pallets of food. Recessed areas, traps and pits under heavy-duty industrial equipment are also places where rodents like to nest.
  3. Easy access: Gaps underneath door sweeps, exterior facing doors that close slowly, propped open doors, gaps in walls, cracks, utility access ports that enter the building are all attractive to a rodent seeking shelter.
  4. Foliage that touches the building: Tree branches that extend over the roof of a building can act as perfect pathway for mice to run across and jump into the top of the building (ants can trail from branches that touch buildings too, so this isn’t limited to mice).
  5. Building proximity to rodent habitats: If your facility is close to open fields, dense foliage, brush or other places with lots of insects, chances are high you have some rodent neighbors. It’s important to be particularly vigilant, especially during fall and winter because as the temperature drops, rodents look for shelter.
Susanne Kuehne, Decernis
Food Fraud Quick Bites

The Meat of the Matter

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food fraud, sausage
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

Use of sulphites in food is tightly regulated in the Netherlands. “Vleesfraude” or meat fraud was committed by Dutch meat processors and butchers by adding large amounts of sulphites to ground beef, sausages and other processed meats in order to achieve the perfect “meaty” red color. Sulphites are classified as an allergen with mandatory labeling requirements, however, their use in meat is illegal in the first place. The affected products were pulled from the market and the companies were fined for fraud.

  1. Resource
    Fortune, A. (June 21, 2019). “Illegal sulphite use found in Dutch meat”. Global Meat News. Retrieved from https://www.globalmeatnews.com/Article/2019/06/21/Illegal-sulphite-use-found-in-Dutch-meat
Susanne Kuehne, Decernis
Food Fraud Quick Bites

Operation Crucifère: Eat Your Greens (But from Where?)

By Susanne Kuehne
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Susanne Kuehne, Decernis
Food fraud, broccoli
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

This week, we are looking at a country-of-origin food fraud where U.S.-produced broccoli was mislabeled as “Produit de Canada” (Product of Canada). Other local producers observed suspicious activities and filed a mislabeling claim with the Canadian Food Inspection Agency. In Canada, federal government guidelines clearly regulate country of origin claims. The responsible food processor, who denies any wrongdoing, will face a steep fine and even jail time if convicted.

Resource

  1. Daphné Cameron, “Des brocolis canadiens… cultivés aux États-Unis?” (May 24, 2019). La Presse Canada. Retrieved from https://www.lapresse.ca/actualites/201905/23/01-5227341-des-brocolis-canadiens-cultives-aux-etats-unis.php
Bob Burrows, Chainvu
FST Soapbox

Five Steps To Overcome the Catch-22 Dilemma Of Blockchain Adoption In Your Food Supply Chain

By Bob Burrows
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Bob Burrows, Chainvu

Have you ever heard the saying, “It takes a village to raise a child”? This saying can easily be adapted to blockchain in the food supply chain, only it would say, “It takes a village to do blockchain successfully.”

Blockchain, by definition, requires the collaboration and consensus of all of its participants. If you look at a commonly accepted definition, blockchain is a sequence of consensually verified transaction blocks chained together, with each of the supply chain members as an equal owner of the same transaction data.

In the food supply chain context, this means that all supply chain participants—from the farmer/grower to the retail store and, in some scenarios, even the end consumer—have to be part of the blockchain or it will fail.

But therein lies the problem.

The Blockchain Catch-22 Adoption Dilemma

While blockchain has the potential to revolutionize the food industry (e.g., the way we handle food recalls), it puts innovators in today’s complex food supply chains in an awkward Catch-22 dilemma.

Unless you are Walmart or another equally big force in the food industry with the buying power to demand that your suppliers adopt blockchain, you cannot implement blockchain successfully without your entire supply chain joining you. But oftentimes, your partners (and sometimes your management) require the commitment of all others jumping on the blockchain bandwagon.

While this situation could feel intimidating, those obstacles are usually easily overcome with the right arguments presented in a sound business case. I want to share with you five tried-and-true steps to get even the most reluctant technophobic supply chain member excited about blockchain and ready to sign on.

1. Clearly Outline Risks Across the Entire Supply Chain

One of the biggest (and most expensive) mistakes companies make when adopting blockchain is to adopt a new technology purely for the sake of it. Therefore, the starting point for any negotiations should be to outline the real business problems you are trying to solve. Put yourself in the shoes of your partners’ management and explain the problems from their perspective.

But don’t try to boil the ocean—just focus on two or three main issues that could either have disastrous (as in business operation/reputation-destroying) consequences or become extremely costly issues. Additionally, you could include a short list of secondary issues to preempt questions about other concerns.

For example, facing a food safety incident and the associated food recalls could be your primary issues. Secondary issues might be product integrity and spoilage (due to the long transit times and possible temperature fluctuations along the way), compliance with government regulations regarding cost and resources, and the consumers’ demand for transparency and traceability.

2. Calculate the Cost of Doing Nothing

Once you have identified the biggest risks, it’s time to put some numbers on paper.
Let’s stay with the example of food safety and recalls. According to the Grocery Manufacturers Association, the average food recall in the United States costs businesses $30–99 million, which only includes direct costs from retrieval and disposal of recalled items without taking additional expenses for lawsuits, reputational damages and sales losses into account.

What would a recall scenario look like for your company, and what costs would be associated with it? What does your liability management for this scenario look like across the entire supply chain? Walk through the scenario step-by-step and put down realistic numbers. Be sure you can back it up with real data at any point in time.

3. Explain the Proposed Solution (Without Getting Too Technical)

Now that you have outlined the biggest risks and walked them through the numbers, it is time to present your proposed solution. When doing so, keep in mind that most people who are not very familiar with blockchain think immediately of Bitcoin and cryptocurrency—including the hype, unpredictability and hacks.

Rather than leading with technical explanations, try to first explain your solution from a business perspective without using the word “blockchain.” Frank Yiannas, the former Walmart vice president of food safety and now deputy commissioner, food policy and response for the FDA, once described blockchain as “the equivalent of FedEx tracking for food.” This is the level of technicality you want to hit.

Once you have buy-in for the overall approach, you can lay out the technical details including how blockchain, IoT-enabled sensors and smart contracts fit into this picture.

4. Showcase Lowest Hanging Fruit First, Then Define Long-Term Benefits & Soft Savings

Pat yourself on the back—you have just overcome the biggest hurdle in the process. Now it is time to bring the deal home by laying out the quick wins (low-hanging fruit) and the long-term benefits.

If you implement a blockchain solution paired with smart sensors to constantly monitor your product’s temperature, shock impact, moisture and location, a huge quick win could be the ability to immediately identify any potentially spoiled or compromised items. All members of the supply chain could get an instant notification if an exception occurs.

While listing the immediate benefits and calculating potential savings is crucial for getting buy-in, the long-term benefits are also important. For example, you could point out that consumers (especially millennials) are willing to spend more money on brands that offer more transparency, brands they can trust (e.g., authenticity of extra virgin olive oil), and brands they can trace back to their origins (provenance).

In addition, there are also efficiency gains through blockchain. When speaking to your own management, point out the ability to improve your own operations due to the increased level of automation, as well as the opportunity for improving the overall supply chain efficiencies by collecting data across the supply chain.

Just be sure that your benefits correlate with the problems you had outlined initially.

5. Have a Detailed Adoption Roadmap

Last but not least, be prepared to have a detailed adoption road map. This is crucial, as it allows you to take their enthusiasm to the next level. All the other steps are for nought if this isn’t put into action. Go the extra mile to set your project up for success and map out the key details, including:

  • Proposed project timelines (e.g., onboarding phase, trial start and end dates, decision deadlines),
  • Must-meet milestones and key performance indicators
  • Expected road blocks and how you will address them

While this puts extra responsibility on your team, it allows you to keep driving the project forward and at least bring it to a trial or pilot stage that will give you more tangible benefits.

Conclusion

Whether you follow these tips step-by-step or you pick and choose, I would like you to take one thing away from reading this: While there is tremendous potential in blockchain, don’t implement it purely for the sake of catchy headlines or bragging rights! To get your supply chain partners and executive management on board, you must tie the implementation to relevant business use cases to achieve tangible results.

Susanne Kuehne, Decernis
Food Fraud Quick Bites

The Horse Is Out of the Barn

By Susanne Kuehne
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Susanne Kuehne, Decernis
Horse
Find records of fraud such as those discussed in this column and more in the Food Fraud Database. Image credit: Susanne Kuehne

Every horse owner (and his or her wallet) know that their equine partner will most likely consume an array of medications over the course of their lifetime, such as anti-inflammatory drugs, joint supplements, antibiotics, topical ointments, pesticides and fly repellents, and many more. Many of these horses are not fit for human consumption, but some ended up in the human food supply, starting in Ireland. The Irish Police Force is investigating this quite lucrative horsemeat fraud, including raiding the suspects’ farms and other property and inspecting the horse microchip tracking system.

Resources

  1. Lally, C. (June 6, 2019). “Gardaí raid farms over claims unsafe horse meat entering food chain”. Irish Times. Retrieved from https://www.irishtimes.com/news/crime-and-law/garda%C3%AD-raid-farms-over-claims-unsafe-horse-meat-entering-food-chain-1.3916827