December 14, 2012

Are You Product Recall Ready?

product recallHere’s a scenario for you….You are a proud entrepreneur who hand crafts your products with love and attention to detail.  Surely a business like yours would never need to worry about a product recall, right?  Think again…

To finish painting out the above picture, what happens when the peanut butter brand that you purchase to make your Asian peanut butter spicy sauce is recalled by the manufacturer?  Or what happens when your local strawberry farmer realizes that the strawberries they sold you last week for your strawberry jam were tainted with mold?

Sometimes, despite all your best efforts, unless you literally grow/raise all the food by hand that goes into every product you make it is impossible to control the entire supply chain that feeds your business.  As such, you should have a product recall plan in place.  Here are a few steps to think through as you develop this plan that, hopefully, you will never need:

1. Preparation is your best plan. 

If you have a plan in place of what you’ll do in case of a product recall impacts one of your products then you won’t have to scramble around to try and pull something together.  Taking the time now to clearly think through a plan will make you much better suited should an emergency arise.

2. Keep track of the ingredients you use. 

Hopefully as you developed your recipes you determined that Brand A ingredient worked better than Brand B ingredient so you consistently only purchase Brand A.  Keep track of all the brands that you buy or all the farms that you procure ingredients from so that you have, in one place, a record of all your the products you use and you can quickly scan that list to see if you’re impacted by a manufacturers’ recall.

3. How are you going to communicate with your customers and retailers if you do have a recall? Develop a plan on how you will get the word out quickly, and calmly, to your customers and retailers that one of your products has been impacted by a recall.  I would even recommend going so far as to draft a response email in advance that clearly lays out the issue and what you are requesting customers/retailers do to protect themselves.   This is the time to think through whether or not you will issue customers/retailers a refund for any of this product.  If you are going to, make sure that is also outlined in your draft response letter and explains how customers/retailers can get that refund.

4. Talk to your insurance company to determine if they’ll cover bad product from recall?

Your small business insurance may cover product recalls as part of your existing insurance of your may have the ability to pay a little more to get this coverage through your insurance company.  This would help cover your costs for any product you had to discard and might also be able to help pay for reimbursements to customers/retailers.  Like most insurance, it doesn’t help to talk to your insurance agent after the roof has caved in to find out what you’re covered for – talk to them now and determine if this is something you should add to your policy.

5. Follow ingredient recall sites

An ingredient recall may not make it onto the local or national news until it starts actually killing people that’s, hopefully, not when you want to first hear about it.  Take some time every week or two to check out, if you’re in the US, the Food Safety site that compiles a list of all recalls from the FDA, USDA, and other government agencies.  You can even sign up to receive automatic product recall alerts by email or text if you’d like.  If you don’t live in the US you should do a search to see if your country offers a similar service that will make it easy to find out about food recalls.

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