How Safe is Your Food and Beverage Business?

Managing the Risk of Product Contamination Beyond the Pandemic

The impact of COVID-19 saw food and beverage companies face significant supply chain disruption and a requirement to heighten operational management. Production lines and transportation logistics were vigorously assessed and monitored to reduce the risk of contamination despite no definitive evidence of COVID-19 transmission via food or food packaging was identified (Food Standards Australia & New Zealand, 2019).

2018 alone saw needles in strawberries, listeria on rockmelons, and metal in lollipops. we have seen milk recalls due to E.coli contamination and metal fragments found in meat. Such food supply crises have delivered a signal warning about the relative fragility of Australia’s food supply chain, and the serious implications that a food safety issue can have for an agribusiness.

There are an estimated 2 million-plus food poisoning incidents each year in Australia – as well as injuries from foreign bodies in food and beverages¹. Besides the direct human impact, there can be profound business continuity implications for organisations across the supply chain.

According to Food Standards ANZ, last year was Australia’s highest number of product recalls, with 109 reported cases in 2020².

Aon’s 2019 Global Risk Management Survey identified damage to brand and reputation along with product recall as two of the greatest risks facing the food agribusiness and beverage industries.

Australia’s food and beverage sector is highly diverse, with increasing complexity from growers through to retail distribution. Each link in the chain can be exposed to tampering, sabotage or extortion. Contamination from the grower can impact other businesses in the chain and introduce costs associated with decontamination required throughout the network, along with safe product destruction.

Where a product recall is prudent, there can be additional costs and complexity in developing a recall program. Recall programs should be bespoke to each business in order to ensure that the correct risk exposures are identified.  Businesses should also pay careful attention to the way they manage public relations following an incident in order to minimise the brand and reputational impact of a recall.

For businesses responding to any form of food and beverage supply interruption, the challenge is compounded by social media which has transformed the way that consumers interact and share information.  A possible influx of media coverage may also increase the risk of copy-cat attacks, exacerbating the problem.

An important requirement for any food and beverage business is to have a well-developed, well-tested social media crisis management plan, which can be adaptable to address specific incidents. A one size fits all approach is unlikely to suffice for most companies within this industry – authenticity can be critical for successful business recovery and to minimise brand impact.

The sector is governed by the food safety methodology that businesses can follow to identify potential hazards and plan how to manage them.

Even with these measures, food and beverage suppliers should remain vigilant to protect their customers and their business.

1 https://www.haccp.com.au/about-us/

2 http://www.foodstandards.gov.au/industry/foodrecalls/recallstats/Pages/default.aspx

3  https://www.foodstandards.gov.au/industry/safetystandards/documents/Guide%20321%20FoodSafetyPrograms-WEB.pdf