The REAL Cost of Foodborne Illness in the United States

By Brian Giannini

Foodborne illness costs the United States $152 billion a year according to a recent report by Robert L. Scharff, a former Food and Drug Administration (FDA) economist. While this number is shocking to many, Scharff also points out that his estimate accounts only for health-related costs associated with the person made ill and to others in society. It doesn’t include what it costs you as a manufacturer to effectively manage a recall of contaminated products that could potentially cause a foodborne illness. Nor does it include the reputational damage your brand may face or what it would cost you to ensure recall compliance.

It’s amazing to think how devastating a single food recall can be for consumers and manufacturers alike. The recent recall of one flavoring product has already led to more than 150 recalls of products containing the ingredient. Fortunately, no illnesses associated with this contamination have been reported to the FDA, at least so far. But does that mean the cost of the recall is zero? Not at all.

Kroger, McCormick, Publix, French’s and dozens of other household names have recalled their products, incurring significant costs along the way. Unfortunately, there is no good way to estimate the cost of a recall for manufacturers, producers or retailers. No two recalls are the same and it can be difficult to predict how consumers and your consignees will respond. And you must also make sure that the regulatory agencies governing the recall regulations approve of your recall management.

When considering the cost of a recall, there are several tangible costs to consider, including:

• Consumer and Consignee Notification. How many times will you have to notify consumers and consignees to ensure that they have the information they need and respond to your recall announcement? Will you need a call center to assist you in responding to consumer inquiries?
• Recall Effectiveness Checks. Will you have to check to make sure your consignees have taken affected products off the shelves and that they keep safe products on the shelves and available to consumers?
• Recall Logistics. How much will it cost to pull products off the shelves? Can they be thrown away, or must they be returned to you or a third-party recall agency for safe keeping until the recall is complete?
• Expert Assistance. Sometimes recalls get too big to handle internally and are better left to the recall experts.

While an economist may be able to estimate the direct costs of managing a recall, there is much more to consider. Effective crisis and recall management are key to ensuring your brand is not damaged and future revenue is not compromised. And these are additional costs that are very difficult to estimate.

As a manufacturer or retailer, you must conduct your own assessment of the cost of illness, foodborne or otherwise, that could result from one of your products being contaminated or otherwise defective. It will likely mean a recall. And investing in a recall preparedness plan now could mean big savings later.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.

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