The U.S. food and beverage industry experienced 23.1 percent more recalls in Q1 2023 over the previous quarter, according to Sedgwick, a provider of technology-enabled risk, benefits, and integrated business solutions.
Undeclared allergens, and particularly nuts and sesame – which was added as a major food allergen in January 2023 – were the leading cause of U.S. food recalls for the ninth consecutive quarter, with 56 recalls in Q1 2023. Foreign material, bacterial contamination, misbranding, and packaging defects were the other leading reasons for recalls.
The U.S. Food and Drug Administration and the U.S. Department of Agriculture regulate separate seafood products sold in the United States, and both issued recalls on seafood products in the quarter. Food product recalls are at a 10-year high, and given the increased frequency of severe weather events and the anticipated increase of pathogens in these altered ecosystems, a changing climate is expected to have a significant impact on food safety, according to Sedgwick Senior Vice President of Brand Protection Chris Harvey.
In addition, new traceability rules from the U.S. Food and Drug Administration (FDA), alongside a USD 41 million (EUR 38.4 million) increase to the FDA budget, suggest audits and recall events will continue to rise in the future, Harvey said.
"As the number of recall events increase across industries, the risks to manufacturers grow more serious, with increased regulatory enforcement and a more publicized recall process," Harvey said. "Regulators are working to prioritize product safety while balancing innovation with oversight – meaning manufacturers can expect to contend with new rules and regulations. Businesses will need to remain agile to keep pace with these changes and prepare for future ones."
In February 2023, the FDA issued a report, "Activities for the Safety of Imported Seafood," outlining how it is using its mandate under the Food Safety Modernization Act and the FDA Strategy for the Safety of Imported Food to ensure imported seafood is safe for Americans to eat. In the guidance, the FDA outlined an ambitious list of topics it will tackle in 2023 with draft or final guidance, including allergens, food additives, topics related to the Food Safety Modernization Act (FSMA), and labeling, according to Harvey. The FDA Food Traceability Final Rule, approved in 2011 and published in 2022, takes effect January 2026. Primarily, the rule was developed to enhance the FDA’s ability to quickly and accurately trace the source of contaminated product in the event of an outbreak.
Under the rule, the seafood industry will face additional requirements for traceability and recordkeeping. The requirements apply to those that manufacture, process, pack, or hold certain foods, including all histamine-producing species of finfish, all finfish potentially contaminated with ciguatoxin (such as grouper, barracuda and snapper), and all finfish. The rule also applies to all smoked fish, molluscs, and crustaceans. Products that appear on FDA’s food traceability list (FTL) must now be tracked with unique identifiers called traceability lot codes (TLCs), used for raw agricultural products as they are transformed into finished food products.
Sedgwick identified four primary technological means for tracking TLC data: Molecular taggants, DNA-based taggants, synthetic taggants, and biological taggants. Each taggant – a type of uniqely encoded material that is virtually impossible to duplicate – has benefits and shortcomings, but the company strongly suggested any seafood company dealing with FTL-applicable products invest time into studying the requirements it will face in 2026 and the best means for them to ensure compliance.
It may even make financial sense for companies to adopt new tracking technology before the deadline, given the fact that the U.S. food and beverage industry suffered USD 7 billion (EUR 6.6 billion) in losses due to voluntary recalls in 2022, the majority of which were uninsured. The market capacity of global recall and contamination insurance is just USD 700 million (EUR 655 million) worldwide, Sedgwick noted.
“The complexity and variability of the food supply chain can make it difficult for insurers to accurately assess and price the risks associated with product contamination and recall events,” Sedgwick said. “Without traceability data, claims can be frequent and broad in scope, with litigation increasingly common. As a result, premiums are often prohibitively expensive depending on the level of coverage needed by the business."
Photo courtesy of United States Seafoods
