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The High Cost of Product Recalls

Food & Beverage

A product recall can impact a manufacturer up to $10 million in direct costs, not to mention the cost of a damaged reputation. Advanced x-ray technology detects foreign matter contaminants in a host of food and non-food products to prevent extensive— and expensive— recalls. In addition to advanced detection, x-ray technology increases operational efficiency by providing a holistic analysis of a product and production line. 

A review of 2017 Food & Drug Administration and U.S. Department of Agriculture food recalls reveals no product is safe from foreign matter contaminants—from contaminants discovered in a line of soups to small pieces of plastic found in protein bars to small glass fragments that spurred other recalled items. According to information published on manufacturing.net, foreign matter contamination is the third leading cause of recalls in both the U.S. and UK, following biological contamination and mislabeling.

Paying the Price

Foreign matter contaminants that result in expensive recall process can stop a business in its tracks, affect a company’s reputation, and more importantly, cut into profitability. Of course, the dollar amount depends on the manufacturer and their product line, but a combined industry study from the Food Marketing Institute and Grocery Manufacturers Association estimates food recalls can cost a company up to $10 million (U.S. dollars).

Breaking it down, there are a number of budget impacts tied to recalls:

  • Direct costs. For example, the price of the product recalled, notification costs and transportation costs.
  • Indirect costs, such as the public relations effect, possible litigation, lower stock values and potential fines.
  • The cost of lost time. “If a manufacturer is checking products in intervals as part of a HACCP program, when they discover something, everything at that point, back to the last time they checked, has to be put on hold. Depending on the plant, the production hold time could be a couple of hours or a couple of days,” points out Steve Dowd, inspection specialist at Eagle Product Inspection.

From 2015 to 2016 alone, U.S. recalls related to foreign bodies jumped 60 percent, while recalls in the EU also rose.

Category X-Ray Solutions

Manufacturers can avoid unnecessary recall expenses and brand damage through vigilant safety protocols and inspection. X-ray detection is a powerful product quality and integrity tool. When x-ray systems are deployed at different points in the production and packaging process, food manufacturers can significantly reduce the risk of foreign matter contamination that leads to costly recalls.

Eagle Product Inspection offers several types of inline x-ray inspection systems designed for the unique challenges and needs of virtually every food industry segment. Examples include:

Enhanced Efficiencies

In addition to finding hard-to-detect contaminants in the raw, in-process and packaging state, x-ray systems like the Eagle Pack 320 PRO and Pack 430 PRO machines offer other benefits to manufacturers to help protect profit margins by reining in costs.

“Advanced x-ray technology monitors everything going through our system. X-ray isn’t just a check to see if something has a piece of metal in it—it’s something that improves your process,” Steve Dowd of Eagle Product Inspection points out. “Everyone is watching their bottom line, and having access to line performance information is important so you can react to it.”

Eagle’s powerful tools provide value even after the initial inspection: x-ray systems collect data, including images, to be stored centrally and conveniently. If a problem is identified after a product goes to market, a manufacturer can quickly access the data and demonstrate their effort to detect possible contaminants.

For more information and case studies about preventing recalls with advanced x-ray technology, click here.

For a white paper on reducing the risk of recalls, click here.

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About the author:
Christy Draus is Marketing Manager for Eagle Product Inspection. Christy manages all areas of the marketing program and initiatives across North America, Latin America, Europe, the Middle East, South Africa and Asia Pacific. Christy has over 19 years of experience and a diversified skill set in business-to-business environments.

CHRISTY DRAUS, MARKETING MANAGER, EAGLE PRODUCT INSPECTION

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