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The food and beverage industry is a constantly evolving space, directly influenced by the ups and downs of nature, global supply chains, and human influence. One such influence that has had a profoundly negative impact on the world food supply is food fraud — an unethical practice involving the intentional alteration of food products to save money.
This global issue impacts suppliers, buyers, and consumers alike, which is why understanding and identifying it is so vital to your business’s success. Follow along as we demystify this troubling practice and provide tips on how to avoid its influence.
From the 1981 olive oil scandal, where street vendors across Spain disguised hazardous chemical aniline mixed with rapeseed oil as the coveted oil, to the 2013 horsemeat scandal in the U.K., consumers throughout history have had ample reason to think twice before believing everything stated on the packaging.
Food fraud is estimated to cost the world economy around $40 billion per year, according to the U.S. Food and Drug Administration (FDA). Although it’s difficult to understand the impact of food fraud worldwide — as food fraud is designed to be hard to identify — experts identified by the FDA estimate that food fraud impacts around 1% of the global food supply.
While the economic impact is significant, the real cost of food fraud hits home for those dealing with health issues from tainted food. Food fraud can cause bodily harm and even death, depending on the severity of the hidden flaws. From potential poison to undetected allergens, there is an inherent risk to anyone who consumes unlawfully altered food products.
Although food fraud may only affect a small percentage of the world’s food supply, the risk of consuming adulterated food is something no one should have to face. To understand the threat of this global issue, it’s important to know why it happens in the first place.
Some common causes of food fraud include:
Food defense is a countermeasure created by the FDA to directly oppose the global epidemic of food fraud. According to the FDA, “food defense is the effort to protect food from acts of intentional adulteration.”
One tool in the fight for food defense is the Food Safety Modernization Act (FSMA), which was originally signed into law in 2011. The FDA’s Food Safety Modernization Act final rule titled “Mitigation Strategies to Protect Food Against Intentional Adulteration,” published in 2016, aims at preventing intentional adulteration. This rule protects against food fraud that “while not likely to occur, could cause illness, death, economic disruption of the food supply absent mitigation strategies.”
A transparent end-to-end supply chain is crucial. Companies must work with their suppliers to forge long-term relationships beyond government and international agency requirements and even surpass the bar set by auditors.
To do so, manufacturers and retailers must catalog and index supplier registers, particularly those producing the main recipe ingredients. Intelligent collaboration with stakeholders includes reviewing procurement contracts and ensuring stringent regulations are in place to protect against misrepresenting ingredients.
As a cornerstone of food defense, companies are responsible for listening and responding to consumer concerns. That means registering complaints in a database, replying in a timely and efficient manner, and tracking the procurement processes in defective products. Food and beverage enterprises should always be ready for potential product recalls and do what’s necessary to minimize any public health and brand reputation risks.
Brands should also have procedures in place to minimize adverse effects on human health and protect the reputation of food and beverage companies involved. Enacting preemptive emergency procedures before any unfortunate incident can occur is pivotal to any food and beverage enterprise’s risk management program.
Food defense is of utmost importance for management-level, cross-functional control in any food and beverage enterprise. This includes seamless and efficient synchronization between the operational, procurement, sales, research and development, quality assurance, and marketing departments to ensure you’re providing consumers with the products they’re expecting.
This type of management is best handled by Product Lifecycle Management (PLM). One of the best solutions is a Software-As-A-Service that SpecPage from Revalize can provide to the food and beverage industry. One of our PLM’s major pillars is tracking product traceability. SpecPage enables materials and recipe specifications management to do just that throughout the entire product structure and lifecycle.
