What Effect Has Consolidation Had on Food Safety?
Has consolidation in the food industry and the emphasis of outsourcing resulted in a situation in which consumers face greater health risks? That is the question posed by The Associated Press in a new article.
According to the report, recent recalls for numerous brands can be traced back to single manufacturers. The news service points to the most recent recall of chili, stews and other items in which the 90 different brands came from one company. There is also the case of Menu Foods, which was tied to the pet food recall after melamine was discovered in a wide number of brands.
As it turns out, more manufacturers are hiring others to produce goods under branded labels. Therefore, when a given food item becomes tainted, the odds increase that others in the same plant will also become contaminated.
Many blame the spread of tainted products to consolidation in food manufacturing, which has led, as previously mentioned, to fewer suppliers producing goods for a wider number of brands.
Dr. David Acheson, who leads the Food and Drug Administration’s food-safety efforts, told The Associated Press, that consolidation and outsourcing is increasing. “It’s (outsourcing is) becoming a common industry practice,” he said.
Much of the outsourcing in the food industry can be tied to the increase in store brands. Store-brand sales account for up to $65 billion annually, according to AP.
Discussion Question: How has consolidation and outsourcing in U.S. food manufacturing affected the safety of products sold?
A principle tenet of communication is that the sender is always responsible for its success. Period. In commerce, the opposite is true: The receiver is always responsible for its success.
Why does it fall to the Federal Government to inspect and ensure the quality of goods received from foreign ports? Why aren’t the receivers here in the U.S. testing the stuff they receive? Why doesn’t Mattel have a testing facility to detect lead in their products? Why don’t U.S. food retailers test everything they receive, from whatever source, for the safety of their customers?
We know why: U.S. corporate buyers are no longer “caveat emptor” guys. They are no longer “bewaring” as buyers. And what absolute freaking idiots! Did it ever occur to American retailers to test the products they receive from offshore suppliers, regardless of the weak and usually unenforced governmental practices? Heck, did it ever occur to them to test spinach from here in California!? Of course not, but they are responsible. Not the undermanned container inspectors in our ports and not the growers and suppliers here in the ‘States. If a retailer puts a product on its shelf for sale, they must be held accountable for its safety and compliance with all laws. They’re not doing it, and it’s clearly and unequivocally on them. No excuses.
The “Next Big Thing?” Retailers announcing in-house testing programs. Watch and see.
Consolidation and outsourcing are not the root causes of whatever new risks may be in the food supply chain. The real culprit is a pervasive fixation on short-term cost cutting as a business survival strategy. That’s why after a merger or acquisition we see fewer people managing more brands: and why fewer plants produce ingredients, components or complete products for more manufacturers. The risky results: companies lack the resources they once had to manage their businesses; and the production function is becoming increasingly separated from the other functions in a food “manufacturing” company.
Outsourcing will continue to erode trust in the consumers eyes. Until we invest more of our resources in our own country, we will continue to see this happen. Are we willing to pay a few pennies more for that bottle of ketchup? Who knows, but there are still plenty of people who would, if they could be convinced through a smart marketing campaign to buy U.S.A. premium foods.
It’s easier to inspect fewer sources compared to many. The real issue isn’t the outsourcing. It’s the number of inspections. According to Consumer Reports, the FDA inspects 1% these days, compared to 8% in 1992. These figures relate to imported fruits, vegetables, fish, pet food, beverages and additives. Of course, the inspection decline isn’t just for imported foods, but the overall trend is clear: fewer inspections = greater risk.
Outsourcing has probably led to some issues in food safety because many retailers have determined that cost is the most important consideration. Therefore, when you have auctions to determine who will be your private label supplier, you might run into quality and safety issues. Being the lowest cost bidder sometimes means cutting corners and sacrificing some of the less obvious quality and safety issues not so obvious to the naked eye.
Outsourcing without serious oversight is an accident waiting to happen.
I believe it was Gordon Cooper, one of the original Mercury astronauts who was asked by a reporter how he felt going up in that little capsule. To which he replied: “It’s made up of a million little pieces put together by the lowest bidder. How do you think I feel?”
Outsourcing has certainly contributed to the challenges we face today with keeping the food-chain safe. Anytime the food-chain gets consolidated there will be new threats to product safety We see this not only in food but many other consumer industries as well. To say how the problem will be solved is anybody’s guess at this time. What we will see is a push to increase the use of RFID and a continued growth in the advanced uses of bar-code technology to help monitor the supply-chain.