The food industry has been one of the most celebrated and fastest-growing industries over the last decade or so. Which is no surprise, considering how much food is now being consumed, or posted on Instagram, on a daily basis. Pop-up food carts and hole-in-the-wall food places have been a huge hit too and even inspired a number of Hollywood films about the tough competition and revolutionary marketing tactics that have taken over the food industry (see: Jon Favreau’s Chef and Bradley Cooper’s Burnt). It’s good times, for sure. Well, for the most part, I mean.
When did foodborne illness become a major concern in the US?
Unfortunately, it’s not just the revenue that’s on the rise, because food borne illnesses too are making the headlines as of late. Talk about spoiling (no pun intended) the fun, eh? Well, according to the US Centers for Disease Control and Prevention (CDC) in Atlanta, Georgia, the number of foodborne disease outbreaks resulting from imported foods increased during surveillance years 2005 to 2010.
Where are the numbers coming from?
Dr. L. Hannah Gould, Ph.D., a senior epidemiologist at the CDC, revealed those findings during an oral presentation here at the International Conference on Emerging Infectious Diseases in 2012. According to the CDC, 39 foodborne disease outbreaks were reported in which the implicated food had been imported into the United States. These outbreaks resulted in 2348 illnesses, 434 hospitalizations and 3 deaths.
How many are affected?
Though foodborne illnesses are often never formally reported, about 48 million Americans, or one in six, get sick each year from food, the CDC estimates, with 128,000 hospitalizations and 3,000 deaths. In fact, in 2014, 19,542 cases of infection were traced from 15% of the US population being surveyed by CDC.
Why is it on the rise?
The culprits? Chances are, you’ve been storing them somewhere inside your establishment: packaged caramel-coated apples, frozen ice cream sandwiches, fresh peaches and nectarines, frozen meet, etc. Not exactly the answers you were expecting, perhaps?
According to experts, the growing popularity of packaged foods such as pre-cut fruit and prepared sandwiches has heightened the risk of spreading foodborne illnesses. Furthermore, they have identified that contamination can occur between preparation and packaging, or in high-tech processing plants, after heating to destroy harmful bacteria and before packaging. Which means, somewhere in the last decade, we lost our way (or something like that).
What can we do to stop foodborne disease from spreading?
The whole fiasco regarding foodborne illness is a public safety concern and must be addressed by everyone. However, while adjusting individually may not be a problem for most of us, the same cannot be said for food places and restaurants. Just imagine the public relations horror for restaurant managers if any of their customers get sick while dining at their place?
Restaurants must be more strict and thorough when addressing food safety concerns. The entire crew must be trained when it comes to food handling and a food safety manager must also take charge in overseeing procedures in the kitchen. In fact, proper storage and disposal must also be adequately done at all times. With those safety measures in play, establishments will be able to showcase their commitment to adhere with local food standards and basic food handling procedures. That’s a step in the right direction, for sure.
Summing up, foodborne illness is definitely a manageable concern and will likely not become a factor that will hinder the overall growth of the food industry. However, the fact that it can be controlled and yet still recurring means that there’s still a fair amount of work needed to be done to improve the industry in other aspects—and that isn’t necessarily a bad thing (at least not yet).
If you are looking for someone who has been ill or has had family members who were ill or died from a foodborne illness to come and speak at your food safety training, give Stanley Rutledge or myself a call, or send us an email. Individuals want to tell their stories, they want to make a difference, and they want to have an impact. The stories are powerful and their stories are “the why” behind food safety. People who have attended the trainings tell us they never forget the people they meet and the stories told—they think about them everyday in their work and especially when making decisions that impact food and public safety.
In the fall, I was on a phone call with a man from Smithfield Foods. We, along with a few others from the company, were planning an upcoming training and speaking engagement. He said that he would never forget listening to Nancy Donley talk about her son, Alex. Dr. Robert Tauxe told me a similar story about hearing Nancy in a public forum talk about her son. Rylee Gustafson, recently through STOP Foodborne Illness, spoke at The Partnership for Food Safety Education and told her story. Now a college student, she spoke about the long-term impacts of her illness—the diabetes, the damaged pancreas, the voice and vision problems, and the high blood pressure. The room was silent and so many people came up to her afterwards to thank her for sharing.
These stories illustrate that this is real: It does happen and when the person who was involved is standing before you reliving their story, you Will remember! Of course, we have fact sheets and a lot of other information on our website for your use, but there is nothing that is more direct, thought provoking and memorable than listening. If you want to read some of the stories, visit our website. You can contact Stanley at firstname.lastname@example.org or me at email@example.com
Anyone who has attended a food safety conference in the last few years has experienced some type of whole genome sequencing (WGS) presentation. WGS is the next big thing for food safety. The technology has been adopted by regulatory agencies, academics, and some food companies. A lot has been said, but there are still some questions regarding the implementation and ramifications of WGS in the food processing environment.
There are a few key acronyms to understand the aspects of genomics in food safety (See Table I below).
Pulse Field Gel Electrophoresis
Technique using restriction enzymes and DNA fragment separation via an electronic field for creation of a bacterial isolate DNA fingerprint; PFGE is being replaced by WGS at CDC and other public health laboratories
Whole Genome Sequencing
The general term used for sequencing—a misnomer—the entirety of the genome is not used, and depends on the analytical methodology implemented
Next Generation Sequencing
NGS is the next set of technology to do WGS and other genomic applications
Single Nucleotide Polymorphisms
A variation in a single nucleotide that occurs in specific position of an organism’s genome; Used in WGS as a methodology for determining genetic sameness between organisms
Multilocus sequence typing
A methodology for determining genetic sameness between organisms; Compares internal fragment DNA sequences from multiple housekeeping genes
16s RNA sequencing
A highly conserved region of the bacterial genome used for species and strain identification
Joseph Heinzelmann will be presenting: Listeria Testing Platforms: Old School Technology vs New Innovative Technology during the 2016 Food Safety Consortium | LEARN MOREIn 1996, the CDC established the PulseNet program for investigating potential foodborne illness outbreaks. PulseNet has relied on using bacterial DNA fingerprints generated via PFGE as comparisons for mapping potential sources and spread of the outbreaks. Due to a number of advantages over PFGE, WGS is quickly becoming the preferred method for organism identification and comparison. Moving to WGS has two critical improvements over PFGE: accuracy and relatedness interpretation. Like PFGE there are nuances when defining the difference between two very closely related organisms. However, instead of defining restriction enzymes and comparing the number of bands, the language changes to either single nucleotide polymorphisms (SNP) or the number of alleles. The other important aspect WGS improves is the ability to determine and interpret the relatedness of organisms more broadly. The frequent Listeria outbreaks and incidence from 1983-2015 provide an insight to what the future might hold with WGS implementation.1 The incidence report shows the increased ability to quickly and more accurately define relatedness between clinical cases creates a link of potential cases much faster.
WGS also provides key practical changes for outbreaks and recalls in the food industry. Sequencing provides a much faster response time and therefore means the outbreaks of foodborne illness decrease, as does the number of cases in each outbreak. As the resolution of the outbreaks increases, the number of outbreaks identified increases. The actual number of outbreaks has likely not increased, but the reported number of outbreaks will increase due increased resolution of the analytical method.
WGS continues to establish itself as the go-to technology for the food safety agencies. For example, the USDA food safety inspection service recently published the FY2017–2021 goals. The first bullet point under modernizing inspection systems, policies and the use of scientific approaches is the implementation of in-field screening and whole genome sequencing for outbreak expediency.
Agencies and Adoption
The success of FDA and CDC Listeria project provides a foundation for implementation of WGS for outbreak investigations. The three agencies adopting WGS for outbreak investigations and as replacement for PulseNet are the CDC, FDA and USDA. However, there are still questions on the part of the FDA for when WGS is utilized, including under what circumstances and instances the data will be used.
In recent public forums, the FDA has acknowledged that there are situations when a recall would be a potential solution based on WGS results in the absence of any clinical cases.2 One critical question that still exists in spite of the public presentations and published articles is a clear definitions of when WGS surveillance data will be used for recall purposes, and what type of supporting documentation a facility would need to provide to prove that it had adequate controls in place.
A key element is the definition between agencies for sameness or genetic distance. The FDA and FSIS are using a SNP approach. A sequence is generated from a bacterial isolate, then compared with a known clinical case, or a suspected strain, and the number of different SNPs determines if the strains are identical. The CDC is using the Multilocus sequence typing (MLST) approach.
Simple sequence comparisons are unfortunately not alone sufficient for sameness determination, as various metabolic, taxa specific and environmental parameters must also be considered. Stressful environments and growth rates have significant impact on how quickly SNPs can occur. The three primary pathogens being examined by WGS have very different genetic makeups. Listeria monocytogenes has a relatively conserved genomic taxa, typically associated with cooler environments, and is gram positive. Listeria monocytogenes has a doubling time of 45–60 minutes under enrichment conditions.3 These are contrasted with E. coli O157:H7, a gram negative bacteria, associated with higher growth rates and higher horizontal gene transfer mechanisms. For example, in an examination of E. coli O104, and in research conducted by the University in Madurai, it showed 38 horizontal gene elements.4
These two contrasting examples demonstrate the complexity of the genetic distance question. It demonstrates a need for specific definitions for sameness within a microbiological taxa, and with potential qualifiers based on the environment and potential genetic event triggers. The definitions around SNPs and alleles that define how closely related a Listeriamonocytogenes in a cold facility should be vastly different from an E. coli from a warm environment, under more suitable growth conditions. Another element of interest, but largely unexplored is convergent evolution. In a given environment, with similar conditions, what is the probability of two different organisms converging on a nearly identical genome, and how long would it take?
MLST vs. SNP
As previously stated, the three agencies have chosen different approaches for the analytical methodology: MLST for CDC and SNP of the FDA and USDA. For clarity, both analytical approaches have demonstrated superiority over the incumbent PFGE mythology. MLST does rely on an existing database for allele comparison. A SNP based approach is supported by a database, but is often used in defining genetic distance specifically between two isolates. Both approaches can help build phylogenetic trees.
There are tradeoffs with both approaches. There is a higher requirement for processing and bioinformatics capabilities when using a SNP based approach. However, the resolution between organisms and large groups of organisms is meaningful using SNP comparison. The key take away is MLST uses a gene-to-gene comparison, and the SNP approach is gene agnostic. As mentioned in Table 1, both approaches do not use every A, T, C, and G in the analytical comparisons. Whole genome sequencing in this context is a misnomer, because not every gene is used in either analysis.
Utilizing WGS for companies as a preventive measure is still being developed. GenomeTrakr has been established as the data repository for sequenced isolates from the FDA, USDA, CDC and public health labs. The data is housed at the National Center for Biotechnology Information (NCBI). The database contains more than 71,000 isolates and has been used in surveillance and outbreak investigations. There is a current gap between on premise bioinformatics and using GenomeTrakr.
The FDA has stated there are examples where isolates found in a processing facility would help support a recall in the absence of epidemiological evidence, and companies are waiting on clarification before adopting GenomeTrakr as a routine analysis tool. However, services like NeoSeek, a genomic test service by Neogen Corp. are an alternative to public gene databases like GenomeTrakr. In addition to trouble shooting events with WGS, NeoSeek provides services such as spoilage microorganism ID and source tracking, pathogen point source tracking. Using next generation sequencing, a private database, and applications such as 16s metagenomic analysis, phylogenetic tree generation, and identification programs with NeoSeek, companies can answer critical food safety and food quality questions.
Today food companies will have access to a new whole genome sequencing (WGS) test that could help them prevent dangerous pathogens from getting into their products. Released by Clear Labs, the test takes a detailed approach to identifying pathogen strains in samples, providing information about their geography and from which food groups they originate.
In an exclusive interview with Food Safety Tech, Mahni Ghorashi, co-founder of Clear Labs, explains how he expects the company’s new test, which has a five- to seven-day turnaround time, will offer companies with a more accurate yet less expensive alternative to protecting consumers by actively monitoring their supply chain for emerging pathogens.
Food Safety Tech: What differentiates this WGS test from current available solutions?
Mahni Ghorashi: No one has been able to provide the food industry with modern whole genome sequencing techniques for food safety. What we’re releasing is a quantum leap in terms of what’s been available on the market today. Whole genome sequencing has been largely siloed to regulatory bodies like FDA and CDC to trace outbreaks and inform investigations—the technologies and techniques that they’re using are actually fairly old; they’re some of the original WGS techniques that emerged on the next-gen sequencing platform. We’ve taken the most advanced techniques on the NGS platform for human disease exploration and personalized medicine and adapted them for food industry.
What gives our WGS test a competitive advantage over legacy-based methods is two fold:
1. Clear Labs has a 2-million+ entry-curated database of genomic information and sequences for the accurate ID of food ingredients (pathogenic organisms and microbiomes). Its accuracy and the confidence level that comes behind our matching is a huge step above anything that’s available in the public domain today.
2. Being able to place pathogenic strain information in the context of overall food ingredients and samples. The whole genome sequencing test we developed has been specifically catered for the food industry, and for food samples in particular, [versus] FDA’s GenomeTrakr, CDC’s PulseNet, or other food safety labs that are offering full genomic sequencing of pathogen strains—they’re using some of the earliest methods to do this. On the NGS platform, we’re able to put those strains in the context of food ingredients and suppliers: Specifically, [matching] bacterial strains with food ingredients [and] suppliers.
FST: Does this test target specific foods?
Ghorashi: Our platform particularly shines in complex foods. The value of next-gen sequencing and DNA barcoding over PCR-based technologies, which is the gold standard in food safety, is its stability to break down complex food ingredients into all of their known parts, and to look in a universal and unbiased way into food samples. It’s untargeted, so you don’t have know what it is that you’re looking for—and that’s the real power.
FST: What impact do you anticipate for this test, especially in the context of FSMA?
Ghorashi: Our customers are using [the test] for monitoring ingredient supplies and the effectiveness of preventive and sanitary controls [and] to match specific pathogen strains to specific food ingredients. They are using it for proactive testing for FSMA compliance—there’s a lot of movement in this direction and hefty budgets are being allocated to put new preventive controls in place in response to FSMA; whole-genome sequencing will play a big role, and we anticipate large-scale partnerships with agencies and private industry on that front. And the most obvious use case is that it’s being used for techniques to mitigate or reduce the risk of product recall and outbreak.
We’ve been able to significantly reduce the price point on whole-genome sequencing, and all of our tests across the board, because we’re intimately familiar with how the inner workings of these platforms and how to best optimize them for scale and cost efficiency. We think the test will be more accurate and leaps and bounds ahead of what’s available, as well as cost competitive. We’re excited about the work we’re doing and its impact on food safety. I don’t think the food industry—retailers and manufacturers—have ever had access to these kind of tools and they’re being made available just in time for FSMA, as the industry moves towards a more proactive approach to food safety and [takes] preventive measures in their supply chains. Hopefully we’ll soon be living in a world where outbreaks, illness and the financial toll are a thing of a past.
Clear Labs also just released a microbiome test that helps companies associate microbiomes with specific food ingredients.
Mahni Ghorashi: The microbiome test we’ve developed is able to sequence samples from the human gut and from food, and look at how the microorganisms are interacting. Our customers for this test have been large brands that have advanced R&D departments and academic research centers that are looking for how diet research and the microbiome interact together and how new product development can help us move toward personalized diets when it comes to prebiotic and probiotic diets.”
The impact of the microbiome and the correlations between bacteria of the human gut and the bacteria in the food we eat. The prevailing thesis at the moment is that the microbiome has a significant impact on our health when it comes to disease risk and diet, inflammation and mood disorders. We’re seeing very forward thinking brands like Nestle, ConAgra and Mars putting a lot of attention on the impact of the microbiome when it comes the development of new products, [such as] prebiotics and probiotics, or even specific food products as it pertains to the microbiome. We believe that this intersection— nutrigenomics and the personalized diet—is going to be a massive market, and we’re at the early stages of that.
Using electronic retail scanner data from grocery stores, IBM Research scientists may have found a faster way to narrow down the potential source food contamination during an outbreak. Researchers from the firm conducted a study in which they were able to show that, using just 10 medical exam reports of foodborne illness, it is possible to pinpoint an investigation to 12 food products of interest in a only a few hours. A typically investigation ranges from weeks to months.
“When there’s an outbreak of foodborne illness, the biggest challenge facing public health officials is the speed at which they can identify the contaminated food source and alert the public,” said Kun Hu, public health research scientist, IBM Research – Almaden in a press release. Rsearchers created a system to devise a list that ranked products based on likelihood of contamination, which would allow health officials to test the top 12 suspected foods. “While traditional methods like interviews and surveys are still necessary, analyzing big data from retail grocery scanners can significantly narrow down the list of contaminants in hours for further lab testing. Our study shows that big data and analytics can profoundly reduce investigation time and human error and have a huge impact on public health,” said Hu.
The researchers point of out their method isn’t a substitute for proven outbreak investigation tools but rather serves as a faster way to identify contaminated product(s). According to the study, researchers assert that their methodology could significantly reduce the costs associated with foodborne illness, outbreaks and recalls. Thus far IBM Research’s approach has been applied to a Norweigan E. coli outbreak in which there were 17 confirmed cases of infection. Public health officials used the method to devise a list of 10 potential contaminants from the grocery scanner data of more than 2600 products. From there, lab analysis traced the contamination source to batch and lot numbers of sausage.
The study was published in the Association for Computing Machinery’s Sigspatial Journal.
Outbreak illnesses and sporadic illnesses have similar traits. In addition, outbreak data can be used to assess the foods that are most frequently connected to particular foodborne illnesses. This analysis, all according to a recent study by the Interagency Food Safety Analytics Collaboration (IFSAC), could aid in improving the progression of science as well as provide a better understanding of the role of sporadic foodborne illnesses and their relation to an outbreak.
Campylobacter, Listeria monocytogenes, and E. coli O157 outbreak illnesses are not significantly different from sporadic illnesses with respect to patients’ illness severity, gender, and age.
Salmonella outbreak illnesses are not significantly different from sporadic illnesses with respect to illness severity and gender. For age, the percentages of outbreak and sporadic illnesses that occur among older children and adults are also similar. The percentage of outbreak illnesses in the youngest age category (0-3 years) was significantly lower compared to other age groups.
Did you know there are more than 250 different types of foodborne illnesses? And while that number may seem daunting, especially when one in six Americans become ill from consuming contaminated foods or beverages each year, there are a few foodborne germs that are responsible for the majority of illness outbreaks, according to the CDC.1 What are these illnesses? What are their symptoms? What can you do to help reduce the risk of an outbreak happening at your restaurant?
The CDC estimates that approximately 48 million people get sick from a foodborne illness each year, with 128,000 hospitalizations and 3,000 deaths. And of these numbers, there are two common illnesses that stand out—norovirus and Salmonella. In fact, these two pathogens account for nearly 70% of all foodborne illness outbreaks in the United States.
Norovirus is responsible for 58% of domestically acquired foodborne illnesses and nearly half of all foodborne disease outbreaks due to known agents.2 Of these instances, most norovirus outbreaks occur in a food service setting, particularly restaurants.
Oftentimes, infected employees are the cause of these types of outbreaks. For example, individuals who are exhibiting symptoms come to work and contaminate food by touching either ready-to-eat foods or food-contact surfaces with their bare hands, which can lead to cross contamination.
Norovirus spreads easily and quickly, so people can contract it by not only by consuming contaminated foods or beverages, but also from having direct contact with individuals who are infected with the virus or touching surfaces or objects that have norovirus on them as well. In addition, norovirus outbreaks can also occur from foods that are contaminated at their source.2
In this video about Norovirus, I discuss the actions you can take, which includes practicing good hand hygiene, to reduce the risk of a norovirus outbreak negatively impacting your restaurant.
Each year in the United States, Salmonella is responsible for 1 million foodborne illnesses, 19,000 hospitalizations and 380 deaths.3 In fact, the pathogen accounts for 11% of all foodborne illnesses in the United States.
People become infected with Salmonella by either eating contaminated food that has not been properly cooked or has been contaminated after preparation.4Salmonella is often found in raw food products that come from animals such as eggs, meat, and unpasteurized milk and dairy products.
While Salmonella is fairly common, measures can be taken to help reduce the risk of infection, such as through proper cooking and holding temperatures. In addition, proper disinfection and sanitization of food contact surfaces (i.e., countertops and cutting boards) helps reduce the risk of cross contamination. Practicing good hand hygiene before eating, and before and after preparing food can also help prevent the spread of this bacterium.
No one ever thinks their restaurant will fall victim to a foodborne illness outbreak, but it can happen and these outbreaks are more common than you may think. It is critical for you to share information about foodborne pathogens and prevention with your staff. This type of education and training can have a significant benefit to your restaurant.
Americans consume 350 billion pounds of food each year, with one out of six people falling victim to foodborne illness, and 3000 dying. The significant amount of Listeria outbreaks hitting the industry (most recently, the staggering number occurring in produce) has left many food safety and quality assurance professionals searching for better methods of prevention and detection. Using big data, specifically metagenomics, to improve food safety and detect potentially deadly outbreaks is indeed where the future is headed.
DID YOU KNOW? The estimated U.S. cost of one case of Listeriosis is $1.4 million. Listeria is a prime concern due to the high percentage of fatalities that occur as a result of contracting Listeriosis. And what’s worse is the fact that many of the cases are preventable.
During Food Safety Tech’s Listeria Detection & Control Workshop this week, John Besser, Ph.D., deputy chief of CDC’s Enteric Diseases Laboratory Branch, outlined how the agency is leveraging metagenomics to find unrecognized problems in the food supply. Perhaps the most important element of disease surveillance is that it enables the detection of new issues, especially those whose presence was previously unknown.
Pathogen-specific surveillance allows the detection of more outbreaks, which will in turn make the food supply safer, because it will enable industry to understand the root causes of outbreaks and help them address problems much sooner. The CDC is focused on genome-based outbreak detection because of its ability to achieve faster detection—and with greater precision in identifying the source. The method has also helped the agency solve outbreaks with fewer cases occurring, and it concurrently helps rule out sources.
PulseNet, a nationwide database (comprised of 87 labs in the United States) that links cases most likely to share a cause for illness, has prompted food safety improvements across a variety of products, including sprouts, peanut products, leafy greens, flour, melons, eggs and poultry. Combine this capability with the Listeria initiative, which was launched in the mid-2000s, and the CDC has been able to find more (and smaller) outbreaks than ever before. In fact, there’s been a dramatic increase in the number of outbreak cases that have been solved (with the food source being identified). During the pre-whole genome sequencing (WGS) stage (September 2012–August 2013), only one outbreak was solved; in year one of the WGS project (September 2013–August 2014), four cases were solved; in year 2 of the WGS project (September 2014–August 2015), nine outbreaks were solved. In these respective time periods, the median number of cases per cluster dropped from six to four to three. In addition, the number of cases linked to a food source jumped from 6 to 16 to 93 during this respective time period.
Besser also discussed the role of metagenomics, or the study of total genetic material recovered directly from environmental samples. A couple of years ago, this was science fiction and wasn’t possible, he said. But as we look to the future, metagenomics will become a lot cheaper as computers become more powerful—and at break-neck speed. He referenced IBM Research, who earlier this year announced a project being conducted in conjunction with Mars, Inc. and Biorad for sequencing the food supply chain (calling it the “largest-ever metagenomics study”).
Metagenomics enables the profiling of communities of microbiomes anywhere in the food supply chain. And the method is fast—it can potentially shave weeks off the process of identifying clusters of interest. In addition, it can increase the value of interviews conducted with patients who have fallen ill (Think about it: Do you remember what you ate two weeks ago? What about a month ago?).
Currently there are several limiting factors surrounding metagenomics: Cost; sequencing read length and error rate; specific software (and pipelines); computing processing power and bandwidth; and the signal-to-noise factor. However, with the rapid rate in which technology has been improving in this space, the high likelihood of these issues being addressed and resolved in the not-so-distant future will present exciting opportunities in outbreak prevention and detection.
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.
The labor union International Brotherhood of Teamsters has been holding nationwide protests at Chipotle locations this month, taking issue with one of the restaurant chain’s suppliers. The supplier at the focus of the demonstrations is California-based produce company Taylor Farms, which supplies tomatoes and peppers to Chipotle, according to Teamsters.
“Over the past five years, Taylor Farms has had more than 20 food recalls for problems such as Listeria, Salmonella and E. coli. In November 2015, Taylor Farms products containing celery and sold at Costco and other retail outlets were recalled for possible E. coli 0157:H7 contamination,” according to a Teamster news release. “At Taylor Farms’ plant in Tracy, Calif., the company has also committed safety and health violations and violations of laws that protect workers’ rights. Recently, the company settled extensive labor rights violations that involved payments of $267,000 to illegally terminated workers and a required posting in which the company promises to never again violate a long list of employee rights.”
The Teamsters protested at 12 Chipotle locations across the country, following 30 previous protests at Chipotle over the past several months.
Teamster Vice President Rome Aloise points the finger at Chipotle for allowing Taylor Farms to “have a total disregard for consumers’ and workers’ health and safety, as well as workers’ rights,” he said. “Chipotle claims to serve ‘Food With Integrity’, but where’s the integrity when it turns a blind eye to its supplier’s behavior? Chipotle must not cut and run – which would hurt Taylor Farms workers – it must carry out its social responsibility and demand Taylor Farms treat workers fairly and with respect.”
Taylor Farms has not released a statement addressing the protests.