Whenever we see a recall, of course our first concern is for any consumers who may have bought the recalled food. But after that, we think about the way the recall will ripple out, causing problems for the company doing the recall — and for other companies in the same or similar market. Any company that has to do a recall is bound to take a financial hit. We know they’ll have to spend a lot of their resources to get the contaminated or harmful product off of the shelves. But beyond that, their company will suffer the effects of a loss of consumer confidence which can set them back for years, even after the contamination threat is long gone.
The Cost of Running a Recall
If you have never been involved in a recall, it can be hard to imagine just how expensive it can be. Even if you are a local producer whose goods are only sold on local shelves, you will have to spend time and resources to collect all of your product and dispose of it. You will have to allocate personnel to manage the recall, tracking your product across the country and ensuring all retailers return any stock. You’ll lose some of your valuable team members to the process, which will force them to shift their focus for weeks or months at a time.
Your staff isn’t the only thing stressed during a recall: your finances will feel the strain too. There is no way to go through a recall without losing money. You have already spent the capital to produce what you put on the shelves, but now you are recalling it completely. You’ll lose everything you spent to produce it. There is no way around that. If you are a small company or only have one major product, and that product gets recalled, you could be in serious financial trouble.
Long Term Costs of Product Contamination
Unfortunately, even after you’ve completed the recall, the problem of contamination doesn’t just go away. Consumers will be acutely aware that your company had to remove your product from the shelves, and they will wonder about the safety of the food in the future. They may choose to buy less — but most will choose not to buy at all. This effect can last for weeks, months, or even years; consumer reaction depends on what foods were impacted and how badly contaminated they were.
Preventing Costly Recalls By Preventing Food Contamination
In today’s economic climate, companies need to avoid anything that could damage profits. As it is, many corporations are struggling under the strain of the recession and have enough trouble without adding problems with contamination. That’s why we feel so sad whenever we see a company recalling food: they’re very likely incurring huge financial debt, yet the thing that forces them to take that risk was entirely preventable.
Companies that use software to track, maintain, and manage produce can stop contamination before it ever becomes a risk. They never have to expose themselves to the dangerous and destabilizing impact of a recall, and they never put the consumers in danger. When companies use software, everybody wins.
