The most important service provided by the nation’s supermarkets is the delivery of safe food to its customers. When there’s a recall — and, given the nature of the business, they can’t be avoided — that bond of trust between grocer and consumer is threatened.
Commissaries, central kitchens and other third-party facilities that provide prepared foods and other value-added foods to supermarkets face their own unique set of challenges and circumstances when it comes to recalls and the crisis management that follows it, says Hilary Thesmar, chief food and product safety officer and senior vice president of food safety programs for the Arlington, Virginia-based Food Marketing Institute.
“We work with members who have those facilities, and for one, the regulatory jurisdiction is completely different from retail stores, and companies need to be aware of that,” Thesmar says.
Retail grocers fall under the jurisdiction of the county, state or, in some cases, the city where they do business. In Maryland and Virginia, for instance, individual counties provide the regulatory umbrella. In Ohio, though, the state oversees grocery stores.
But with commissaries, central kitchens and other, similar facilities, the United States Food and Drug Administration has regulatory jurisdiction. “A commissary that is a stand-alone facility, serving multiple stores but not attached to one of those stores, is under FDA jurisdiction,” Thesmar says. “Working under that framework poses some challenges for companies that are operating in multiple jurisdictions.”
Grocery stores under the same banner in different cities, counties or states may have their own protocols for handling recalls based on the particular requirements of the local or state governing body that oversees them. But if the commissary or central kitchen that supplies a store with its prepared foods and other offerings is implicated in a recall, dealing with federal authorities can require a much different response — and, subsequently, crisis management plan.
Allergen labeling front and center
With commissaries and central kitchens, Thesmar says, allergens play a huge role in recalls.
“Commissaries are dealing with complex products with multiple ingredients, and allergen control and labeling is usually what we see when we see recalls coming out of those facilities.”
The large volumes of ready-to-eat products produced in commissaries and central kitchens also poses special challenges when it comes to contamination, pathogen control and other factors.
“There are some unique challenges,” she says. “(Commissaries, central kitchens and related facilities) need to hire food safety experts to know what they’re doing and to be in compliance with all the regulatory frameworks they’re under the jurisdiction of.”
Recalls, Thesmar says, are just part of doing business in the food industry. Retailers handle about 10 to 20 recalls every week, and they’re very good at executing them and communicating with their customers about them, she says.
Technology has changed everything about both recalls and crisis management, she says. It wasn’t that long ago that a retailer communicated news of a recall by posting a notice on their (actual, not digital) bulletin board.
“Twenty years ago, email was still in its infancy,” she says. “Now, it’s on Facebook within minutes of a supplier announcing a recall.”
That faster, more widespread communication is of course a good thing, but it also can create the impression that the foods sold in grocery stores today aren’t as safe, which, Thesmar says, couldn’t be further from the case.
“Food isn’t less safe, we just know more about it,” she says. “There are more recalls now because we know more about food. More are announced Ten or 20 years ago they might not have found that positive finding in the food, public health officials weren’t finding as many positives.”
Thesmar is optimistic that the food industry can reduce the number of recalls by focusing on prevention. “I think can have a safer food supply because we’re going to do a better job of preventing microbial contamination, chemical contamination and physical contamination,” she says. “Most of the recalls now are for microbial contamination. We also see a huge number of recalls due to allergens and mislabeling. If we can prevent them we can make some real progress.”
A solution for fresh prepared foods
The Food Marketing Institute is partnering with an insurance brokerage on an insurance plan for grocers’ prepared foods programs.
RevenueShield, a collaboration between Arlington, Virginia-based FMI and Lone Tree, Colorado-based Berrian Insurance Group, is designed to protect grocers and their supply chain partners from food safety and product recall risks associated with fresh prepared foods programs.
“Overall, Revenue Shield’s goal is to provide a member benefit to FMI members to help them have a portfolio of services to help them run their businesses better,” says Hilary Thesmar, FMI’s chief food and product safety officer and senior vice president of food safety programs.
The expansion into nontraditional revenue centers has resulted in significant sales growth, customer loyalty, and stronger brand awareness, says Joel Berrian, co-owner of Berrian. With that expansion comes additional risk, especially to a retailer’s brand reputation during an outbreak or recall event.
RevenueShield, Berrian says, is the first insurance policy of its kind to address business income loss from these risks. The program also provides crisis management and other tools to protect companies’ revenue in case of an outbreak or recall.
FMI chose to work with Berrian on the product because of the company’s experience working with food retailers and ability to tailor the program to FMI members’ needs, says Mark Baum, FMI’s chief collaboration officer and senior vice president of industry relations.
“FMI has been in front of industry trends and is constantly seeking new and innovative ways to assist members with their investments and enhanced emphasis on freshly prepared foods and private brand offerings,” Baum says.