Tag Archives: liability

Chris Keith, FlexXray
FST Soapbox

How Foreign Material Inspection Can Impact Your Liability From Packaging

By Chris Keith
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Chris Keith, FlexXray

Packaging is an essential component of our modern, global food supply. While it helps us preserve and protect food and creates instant brand recognition for consumers, packaging also inserts an additional level of necessary risk mitigation into the manufacturing process. Liability stemming from packaging is a serious concern for food manufacturers of all sizes, with millions of dollars and brand-damaging lawsuits on the line. Processed foods need packaging to arrive in the hands of consumers, and processed foods are necessary to feed the world’s population. According to a survey conducted by the United States National Library of Medicine, “60% of calories consumed were from ultra-processed foods.”1 This shows the prevalence of processed foods and the significant impact packaging, a ubiquitous component of processed foods, plays in the food industry.1 However, if not handled properly, food packaging can be a significant liability.

Liability from packaging commonly presents in two ways: First, as foreign material contamination. Broken, damaged or defective packaging material can end up in food products, which increases the risk of a consumer attempting to consume contaminated goods. Second, packaging can be a hurdle to effective remediation of foreign material contamination, as goods can often not be efficiently or effectively inspected back through in-plant critical control points. The resulting disposal of product can contribute to food and environmental waste, as well as lost profits.

The harsh truth is that if manufacturers lack processes to identify, prevent or mitigate foreign material contamination when it occurs in packaged food, packaging can be a significant liability at every stage from the manufacturing facility to the store shelf. Following strict food safety plans can save countless hours, resources and dollars in the long run.2

Foreign Material Contamination: Where It Comes From

Foreign material contamination comes from multiple sources in the production cycle. It can come from raw materials, like animal bones ending up in boneless meat products. It can happen during the production process when a screw or seal detaches from a machine and gets mixed into a pie. It can be biological, like an insect ending up in a bag of chips. Or it can come from packaging: A shard of glass winding up in a jar of salsa or a plastic wrapper finding itself in a muffin. All of these foreign material contaminants are risks and dangers for which manufacturers can be held liable.

Packaging-related contamination is a high priority for manufacturers. Foreign material contamination due to packaging occurs when contaminants like metal, plastic, styrofoam and other objects end up where they do not belong, disrupting the integrity and quality of the product. Packaging materials can break down into tiny pieces that inline inspection machines may not be able to identify. Inline machines are calibrated for a certain size and certain types of foreign material contamination, which may not include packaging materials. Additionally, inline machines are often used at critical points during the manufacturing process but are not commonly used to inspect completed packaged products.

Break It Down: Liabilities Within Food Packaging

The party most affected by missed foreign material contamination is the consumer. Current consumer trends point to greater ingredient awareness, education and research into the companies from which consumers purchase products. The consumer mindset of environmentally friendly products and socially responsible purchases are impacting the food industry directly. Consumers seek transparency from brands about the products they’re ingesting. When a consumer discovers foreign material contamination inside a product, it creates frustration and eliminates trust. In addition to negatively impacted brand reputation, a foreign object from packaging can be incredibly costly. Recalls, especially those that require a local or national public warning, are detrimental to a brand’s reputation.3 Consumer trust in a brand is priceless and can take years to repair when broken.

In the age of social media, consumer reports of foreign material contamination can spread like wildfire across multiple platforms, reaching countless consumers across the world. One tweet about a contaminated product can go viral, costing corporations their reputations or worse–– lawsuits. An accidental miss somewhere along the production line can result in public outrage and cost the manufacturer millions of dollars in wasted product and crisis management. Suppose a consumer accidentally consumes a foreign contaminant from product packaging which results in injury. In that case, the manufacturer could be held liable for the medical bills and even long-term care if the injury is debilitating. These court cases can be highly costly monetarily and in terms of public perception.

In addition to legal liability from consumers, the loss of product for foreign material contamination is typically very costly when labor, storage, time, materials and lost revenue are taken into account. A producer who makes the moral and ethical decision to dispose of product that may be contaminated loses money doing so. They also risk harming their reputation with consumers by contributing to the problem of food waste.

In the 21st century, shoppers are increasingly looking “beyond the label,” and are concerned with the impact their purchase behaviors have on the environment.4 Consumers in younger demographics are significantly more likely to have a purchase decision influenced by a company’s impact on and concern for the environment. Packaging is a major concern for food manufacturers as they seek to lessen their environmental impact to meet market demands. This impacts foreign material contamination in two important ways. First, as packaging materials move towards the use of biodegradable materials, the capability of technology to detect the difference between packaging and food material must increase. Second, environmentally-friendly packaging is still relatively new compared to traditional materials, and the risks of foreign material contamination associated with these materials are still relatively unknown.

Manufacturers are in a difficult position when dealing with the liabilities stemming from packaging as a foreign material contaminant. Compounding this issue is the role packaging plays in preventing manufacturers from using in-house processes or inline equipment to inspect product back through Critical Control Points. Inline mechanisms for identifying foreign material contamination are not designed to inspect completed, packaged product. If producers dispose of and rework product, they risk harm to sustainability-focused brands, production quotas and bottom lines. If they attempt to identify the contamination themselves, they lose valuable production time and potentially lose perishable product to spoilage. With nearly every solution, another liability arises.

Packaging Contaminants: Prevention, Response and Liability

The FDA-required Hazard Analysis and Critical Control Points (HACCP) plan has seven principles to ensure manufacturers meet food safety goals from production to consumption. Physical, chemical and visual tests are involved to ensure foreign contaminants do not exist in products produced in the manufacturing facilities.5 The more detailed processes are in place, the more protected companies are from recalls and reducing the chance of a lawsuit where the manufacturer is liable. Implementing different programs and processes to prevent and diminish food waste ultimately positively impacts the manufacturer’s bottom line. The Business Case conducted a study called “Reducing Food Loss, and Waste” that found “99% of companies earned a positive investment when they implemented programs to reduce food waste”.6

Many companies engage third-party food inspection partners as an extra measure to ensure that their product is free from foreign material contamination. By electing to utilize third-party inspection services, manufacturers hit a trifecta: They can typically salvage the majority of on-hold product, reduce food waste, and with the right partner, get the data they need to have traceability of foreign material contamination issues at their plant.

Manufacturers should pursue third-party inspection partners that meet a high standard of excellence. The best third-party inspection partners use cutting-edge technology to inspect products in higher detail than inline machines. Their machines should be capable of identifying foreign material contaminants of all types and have a high capacity to turn around large volumes of product efficiently. Their machines should be capable of overcoming the obstacle of packaging as an impediment to inspection using machines with a larger aperture than typical inline tools. Lastly, third-party inspection adds significant value if it has the ability to find and retrieve foreign material contamination so manufacturers can effectively use the resulting data to identify and remediate problems within the plant. An inspection service that does not meet these criteria is not an inspection service, but merely a method for outsourcing the same practices that a manufacturer would conduct in-house.

Liability Questions Answered

So, when are companies liable for packaging issues? Unfortunately, the answer isn’t always black and white. FSMA is in place to help prevent foodborne illness, requiring Food Safety Plans. In addition, the FDA recognizes “that ensuring the safety of the food supply is a shared responsibility among many different points in the global supply chain for both human and animal food,” so manufacturers may not be the only ones liable in many cases.7 The problem arises when manufacturers miss foreign contaminants or if foreign biological contaminants affect the integrity of the packaging.

Even if companies take the necessary steps, incorporate a HACCP plan and are vigilant, contamination can, unfortunately, happen at any time to any manufacturer. Using a third-party partner as an outside resource for foreign material inspection is important. Choosing a third-party partner with the experience, certifications, technology, processes and reputation to protect your brand is critical. Manufacturers can validate their internal processes and data using reports from their third-party inspection partner more quickly than they could internally.

Food packaging and the potential liability involved can be daunting. Still, with proper processes and procedures in place, manufacturers can have confidence that their products are hitting the shelves with a low probability of recall or lawsuit due to a packaging issue. While there is always a chance of foreign material contamination, quality packaging materials, quality assurance processes and quality third-party inspection partners can significantly reduce a company’s potential liability.

References

  1. Baraldi, L. G. (March 9, 2018). “Consumption of ultra-processed foods and associated sociodemographic factors in the USA between 2007 and 2012: evidence from a nationally representative cross-sectional study.” BMJ Open.
  2. FDA. “FSMA Final Rule For Preventive Controls For Human Food”.
  3. Lusk, J. (October 15, 2019). “Consumer Beliefs About Healthy Foods And Diets.”
  4. Cheung, K. H. J. L. (2020). “Meet the 2020 Consumers Driving Change“. IBM.
  5. FDA(August 14, 1997). “HACCP Principles & Application Guidelines.”
  6. Hansen, C. “The Business Case For Reducing Food Loss and Waste.” Champions 12.3.
  7. FDA. “Food Safety Modernization Act (FSMA).
Kari Hensien, RizePoint
FST Soapbox

How to Enhance Your Food Safety Culture, Now More Important than Ever

By Kari Hensien
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Kari Hensien, RizePoint

I don’t have to tell you that COVID-19 is a crisis, and the consequences have been immediate and difficult. But as I speak to clients and look beyond the immediacy of the problems the food industry is facing, I am seeing positive insights that can help us now and in the future.

Food safety culture hasn’t always been clearly defined, nor has it been a “must” in many food safety systems. But the reality is that food safety culture—and the buy-in that needs to happen in your entire organization—is a direct and important element for staying up to date with new rules and being consistent and compliant at every location.

Join Kari Hensien for a complementary webinar, “4 Solvable Challenges for Enhancing Your Food Safety Culture 2020” | October 28 | Register NowWhat Does Food Safety Culture Mean Now?

The definition I have liked most is “food safety culture is what you’re doing when no one is watching.” But with the coronavirus pandemic, everyone is always watching, so the definition must expand.
Customers are carefully watching every employee at every location to gain a feeling of safety and trust at restaurants and eateries. And if employees aren’t up to speed or don’t have buy-in to your food safety culture, or even food safety in general, a single incident can turn away customers for good.

As an example, I recently visited a favorite taco joint. After the cashier rang me up, he put hand sanitizer on his gloves and proceeded to put handfuls of chips into my takeaway bag with those same “sanitized” gloves. I will not be going back.

So, food safety culture is still about what you do when no one is watching and when everyone is watching, making participation from every member of your organization critical.

What Can You Do Now to Enhance Food Safety Culture?

Practices that enhance food safety culture should initiate a shift in perspective before you implement more tangible activities. These shifts will be more challenging because they require your entire organization to be on board.

Perspective Shifts for Food Safety Culture

One or more paradigm shifts may be necessary to make enhancing your food safety culture successful. Sometimes initiatives like food safety culture can feel more like another addition to your to-do list rather than an asset that ultimately makes the job of a quality manager easier. So, consider these suggested shifts as you move forward.

  1. Food safety culture is part of your food safety system and your corporate social responsibility plans. With any crisis, not just the current pandemic, the values and expectations you instill in your employees can give you an immovable base, even if the surface is in constant fluctuation. And whether you’re dealing with an outbreak or a pandemic, showing you put customers and location employees first demonstrates good corporate citizenship.
  2. Location employees can be your biggest asset or your biggest liability. Employees perform better when they know the purpose behind what they’re doing rather than following rules that may seem arbitrary if they don’t have a clear understanding of why.
  3.  Punitive systems encourage hiding problems; supportive systems encourage collaboration and trust. If employees feel safe reporting issues or problems at their location, the more likely they’ll catch small issues before they become huge liabilities.
  4. Food safety culture can be a huge asset. In other words, instead of looking at food safety culture as another chore in your already crowded list, see it as an asset that improves food safety and creates better work environments, which inherently decreases risk and protects your brand.

In-Practice Shifts for Food Safety Culture

The paradigm shifts suggested above help build a support perspective for a strong food safety culture. The following shifts I suggest can help you implement tangible actions that benefit every level of your organization.

  1. Take great care of location employees. These employees are in direct contact with customers the most, and they are truly your first line of defense. Which means they can be an incredible asset or the weakest link.
  2. Consider audit and checklist software over laminated or paper checklists. The right software or app can instantly push new policies or standards to every location and employee at the same time, so everyone is always on the same page. Choose software or other tools that 1) makes it easy for all employees to get the information they need; 2) helps them quickly build behaviors that serve your quality and safety programs; and 3) empowers them to confidently share issues that need to be corrected so you get a true view of the health of any location.
  3. Consider quality management system software. With a platform (there are many that include audit and checklist tools), you can collect data points more quickly and from more sources to create a single source of truth and deepen insights. Software can directly support food safety culture, helping you:
    • Find new insights and continually improve your processes
    • Systematically rollout new policies and procedures
    • Drive adoption of new policies and “build muscle memory” so employees build good habits
    • Validate that your policies and practices are followed in every location
    • Identify locations or policies that need increased focus while you reward areas of successful performance.
  4. Look at your organization from a 30,000-foot perspective. This is not so easy to do if you are using manual processes such as paper, file cabinets or even spreadsheets. With those tools, you can see data points, but it takes a lot of work to build a big-picture view. Again, this is where software is invaluable. Many quality management system software options include built-in analytics and reporting, which means much of the work is done for you, saving you valuable time.

I hope your main takeaway from this article is that surviving a crisis requires a strong food safety culture. It helps unify employees across your organization, so everyone knows what’s expected of them and how their work affects the big picture. I see strong evidence that enhancing your food safety culture is more than the “next thing on your to-do list.” It’s a tool that you can put to work to decrease risk, increase compliance, and find small issues before they become huge problems.

Food Safety Vs. Blockchain: Who Wins?

By Maria Fontanazza
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The jury is still out on how (and if) blockchain can contribute to a safer food supply. Whether or not there is a clear understanding of the technology, and its potential and pitfalls, is up for debate as well. “What is blockchain? This is the number one question that people have,” said Darin Detwiler, director, regulatory affairs of food and food industry at Northeastern University, who led a panel of experts as they deliberated over this hot topic during the 2018 Food Safety Consortium.

“Blockchain levels the playing field where we can connect people, resources and organizations in ways we’ve never done before to harness new ways of extracting value,” said Nigel Gopie, global marketing leader, IBM Food Trust at IBM.

What Is Blockchain?

Gopie provided an introductory definition of blockchain: Simply put, it is a series of blocks of information attached together. Each block is a box of information that stores data elements, and this data could be almost anything. Each block has a digital fingerprint associated with it; this fingerprint allows you to know that the block is unique and can attach to other blocks. When new blocks come into the chain, each block has a new fingerprint—one that is unique to that block and of the block before it. This allows the connection to happen, and enables visibility into the origin of each block.

Blockchain enables one book of business and provides three important benefits, said Gopie:

  1. Digital transactions
  2. Distributed ledger with one version of truth throughout the network
  3. Data is immutable
Blockchain, IBM, Food Safety Consortium
IBM’s Nigel Gopie breaks down the basic meaning of blockchain for attendees at the 2018 Food Safety Consortium.

Although blockchain can help to start the process of solving food issues surrounding safety, freshness, reduced waste and sustainability, the technology is only the foundation. A series of other components are important as well, said Gopie, and the following are some insights that the expert panel shared during their discussion.

2018 Food Safety Supply Chain Conference, Blockchain
Is the Food Industry Ready for Blockchain? Check out a dynamic panel about the technology from the 2018 Food Safety Supply Chain Conference.

Can Blockchain Actually Impact Food Safety?

Jorge Hernandez, chief food safety officer at Wholesome International: “To me, it’s a fantastic new technology that would allow the food industry to do a much better job of finding, from seed to fork, all of the processes and things that happen to that product. And in the future, [it] allows us to identify problems first and solve [them]. My problem is it being sold to companies…and not able to deliver on the promise… It bothers me that we are looking at a future that may or may not be there.”

Angela Fernandez, vice president, retail grocery & foodservice at GS1 US: “We’ve been working on traceability and transparency for over a decade—you have to be capturing the data needed, [and] we’re still working on getting it right. We’re just not there yet. I think it’s a great place for us to strive to go towards, but we’re still early in the stages of accepting it as a community.”

David Howard, vice president of corporate strategy at Pavocoin: “Blockchain itself is simply a technology. We’re all here because we’re just trying figure out what application we can use in business. Blockchain is a technology that can help all of you improve operational efficiencies for your bottom line.”

Is Blockchain a Barrier or a Fast Lane to Heightened Liability Concerns?

Shawn Stevens, food industry lawyer and founder of Food Industry Counsel, LLC: “I think the starting point is to ask ourselves what makes food unsafe. It’s a lack of transparency…What blockchain can do is illuminate entire segments of the industry…From a reactive standpoint, blockchain can help us identify a problem [and] solve it. From a preventive standpoint, if I have access to all this information regarding attributes and quality of supplier, I can make better decisions that protect my company.”

“We want to know more and be better informed. Once you know more, you better react and do something. If you’re getting this line of sight and you don’t react to it, that’s what exposes you to liability.”

Darin Detwiler, director, regulatory affairs of food and food industry at Northeastern University: “We need to look at the balance between the reactive use of blockchain and the proactive use.”

2018 Food Safety Consortium on Blockchain. (left to right) David Howard, Pavocoin; Jorge Hernandez, Wholesome International; Nigel Gopie, IBM; Angela Fernandez GS1 US; and Shawn Stevens, Food Industry Counsel, LLC. Not pictured: Darin Detwiler, Northeastern University.

What Barriers Does Industry Need to Anticipate?

Fernandez: “The barrier of the standards and interoperability piece—that’s a big question our community is asking us. Scalability… standards are vital…I think that opens up a different discussion when talking about private versus public blockchain.”

Hernandez: “What is my ROI? The issue I have with blockchain is not only the investment in my organization, but I have to bring my entire supply chain with me if I want to get any benefit. There’s a good value proposition, but it requires you to get everyone on board. When you’re a large organization, it’s probably not that hard to do. But a small organization like mine where my suppliers are an Amish community that sells us cheese, that’s a huge mountain to climb. They don’t have the background [or] the technology, and even if they wanted to do it, it’s a big change for them. You’re asking me to make a change in my relationship with my suppliers.”

“Take a look at it from the business continuity [perspective]. What are the changes you’re going to have to make? And that changes that have to be made by everyone who works with you? We should not stay static. We should continue to look for things. If this is the technology that is going to move us forward, let’s start getting prepared.”

Randy Fields, Repositrak
FST Soapbox

Insurance and Food Safety: A Primer for the C-Suite

By Randy Fields
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Randy Fields, Repositrak

Food safety risk is now a greater concern for retailers and manufacturers than ever before due to the combination of FSMA and increased consumer concerns. Supply chains are more complex, product recalls and foodborne illness outbreaks occur more frequently, and the new normal is prevention rather than inspection. Wrap that all up with advanced technology and the 24-hour news cycle, and consumers are acutely becoming aware of food safety issues as soon as they occur.

What this means for all of the participants in the global food supply chain is that you should review your insurance policies and look for gaps in coverage where you may be exposed. While no two recalls are the same, and foodborne illness outbreaks impact affected companies in different ways, certain trends have emerged to help better understand the claim friction points that frustrate companies after a food safety event.

Two of the most important tools to mitigate food safety risk are contaminated product insurance (CPI) and product recall insurance (PRI). Inventory, cost of refunds and recall expenses are three of the largest recall loss items suffered by companies. Combined, they are the largest percentage of loss (nearly 50%) and represent a substantial portion of uncovered loss for any insured under CPI/PRI. The sole basis for this frustrating friction point is simple—lack of traceability.

CPI/PRI only covers losses that result directly from a covered insured event. If a company is unable to support its claim that costs are directly related to the event and the resulting recall or outbreak, it will not be reimbursed under a CPI/PRI policy. And, as such, loss amounts are generally not covered under general liability and property policies either, so a significant portion of a company’s loss remains uncovered.

Here’s a recent claim example to illustrate the impact on a company that lacked the capability to properly trace its products. An insured purchased a CPI policy with a $2 million Accidental Contamination limit. An event occurred involving a contaminated food product, which triggered that coverage. During the review, the insured provided spreadsheets supporting nearly $1.1 million in customer credits for product shipped and either returned by the customer for disposal or destroyed by the customer. Unfortunately, based on a review of the information provided in support of the spreadsheets, the accountants found that the insured was unable to properly trace and support its claim that the returned or destroyed product was affected by the insured event recall. Under these circumstances, the accountants were only able to confirm $187,000 in losses. The result: The company was unable to recover nearly $1 million in potentially covered losses because it lacked traceability. These outcomes are not uncommon.

The insurance industry understands food safety risks and the need to evolve products to meet the needs of food industry clients. Companies can’t totally mitigate all food safety issues, but understanding the risks is the best way for a business to protect itself. Insurance industry leaders are working in partnership with their food sector clients to ensure that risks are better understood and that the client has appropriate systems in place to help mitigate them.

Insurance companies are tailoring their products to ensure that policies are developed to address the recall risks caused by regulatory changes and help companies ensure compliance as well as an understanding of the regulatory requirements. However, food companies may increasingly find coverage and limits adjusted lower for government recalls in high-risk environments. Insurers are also a key player in the promotion of food safety standards, and some offer favorable rates to food industry clients who are graded top tier for safety.

Some insurers go a step further, allowing clients to allocate a portion of their premium for pre-incident risk-analysis and crisis-response services. Top insurers provide clients access to a network of crisis management specialists as part of their food safety coverage. They should offer risk management guidance in areas such as food safety risk, regulatory compliance, supply chain management and product security.

One of the most critical risk mitigation tactics is developing long-term relationships with trusted, but verified, suppliers, distributors and other key partners. It is also important for companies to undertake regular site visits to their manufacturers or suppliers, and commission third-party audits to maintain reliability and transparency.

Not if, but when a product recall occurs, a company faces a myriad of risks. As with food safety, preventive planning can pay off significantly. By proactively working with insurers, trading partners and technology vendors you can reduce if not eliminate the negative impact of the event.

DOJ Launches Criminal Investigation into Dole

By Food Safety Tech Staff
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Learn innovative ways to mitigate the threat of Listeria at the Listeria Detection & Control Workshop | May 31–June 1, 2016 | St. Paul, MN | LEARN MOREOn Friday the news broke that the U.S. Department of Justice (DOJ) was investigating Dole Food Co. over the Listeria outbreak involving packaged salad. The deadly outbreak was linked to salad produced at Dole’s Springfield, Ohio facility. Although the DOJ has not yet commented on the criminal investigation, The Wall Street Journal reports that Dole reported positive Listeria samples at its facility as early as July 2014.

In January 2016, Dole voluntarily recalled all salad mixes produced at the Springfield plant, by which point 33 people in the United States and Canada had fallen ill with Listeria and four had died. The CDC reported on March 31 that the outbreak appeared to be over and Dole restarted production at the Springfield facility in April.

In a press release on the company’s website, Dole stated that the issues FDA reported at its Springfield facility have been corrected. “We have been working in collaboration with the FDA and other authorities to implement ongoing improved testing, sanitation and procedure enhancements, which have resulted in the recent reopening of our Springfield salad plant.” It also acknowledged that it had been contacted by the DOJ related to an investigation and will be cooperating with the department.

Fontanazza and Fields

Food Companies: Know Your Suppliers

By Food Safety Tech Staff
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Fontanazza and Fields

Read the Q&A with Randy Fields, “Senior Execs in for a Rude Awakening Regarding Supply Chain Compliance”Both accountability and liability will play a role in how food companies work with their suppliers moving forward. “The global food supply chain has really been based on trust for the last 70 years,” said Randy Fields, chairman and CEO of Park City Group and Repositrak. In a video interview with Food Safety Tech at the 2015 Food Safety Consortium, Fields explains how companies must go beyond simply “trusting” their suppliers to having a keen awareness of their suppliers’ activities from a compliance perspective.