The direct cost of a recall can be millions of dollars for many companies
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Do You Know What You Just Bought?
By Ryan Stancil
Written Mar. 30, 2019
“Eat this, not that!”
It’s a phrase you're guaranteed to hear whenever new health-related research comes out. The fickle news cycle is quick to latch on if only to demand your attention for a little longer. One day eggs are good for you. The next, they aren’t. One day you’re being told to throw out all of your potatoes and the carbs they rode in on. The next day, potatoes are meant to be a staple of your diet.
There are seemingly countless food items that fall victim to this kind of identity crisis, with one of the most well known being the avocado. These days it’s considered a superfood, the kind of thing everyone should have some serving of as part of a healthy-living routine.
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But even with this fruit being a darling of nutritionists and food bloggers, it’s still a food like any other. That means it goes through a complex supply chain to get from the producer, to the retailer, and ultimately the consumer.
Many things can happen along that chain to make it potentially unsafe.
The Cost of an Outbreak
Just a few days ago, news broke that the Henry Avocado Corporation had to recall large amounts of its product due to fears of possible Listeria contamination. This bacteria can cause a number of issues in otherwise healthy people. While the symptoms usually go away after a few days, for some people a contamination can prove to be fatal.
Had this latest outbreak not been caught and the recall not issued, cases could have emerged in at least six states: Arizona, California, Florida, New Hampshire, North Carolina, and Wisconsin. The company in this instance played it safe. Even though no consumers reported becoming ill, testing for Listeria monocytogenes turned out positive at the California-based packing facility where it all came from.
So yes, lives were potentially saved here.
But the other side of this equation should be considered. Even though no one got sick from eating the avocado, the company lost money recalling the fruit. Not only have those potential sales been lost, but the fruit in question had to be repacked and sent back to California. The Henry Avocado Corporation will have to take the financial hit for that. Then there’s the potential damage to the company’s reputation that something like this would bring. It’s an issue that many food producing and packing companies have to wrestle with every year.
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According to some studies, the direct cost of a recall can be millions of dollars for many companies.
So you can see why they would have an interest in doing whatever they could to keep these outbreaks from happening in the first place.
And when you consider that this isn’t limited to companies that deal with food, the scope becomes even more shocking. The pharmaceutical industry, which is a multibillion-dollar industry, sometimes has to deal with medication recalls. These can be caused by contamination, potential for impurities, and a number of other issues. The earlier in the supply chain these issues are caught, the more money and lives are saved in the long run.
Likewise, fashion and lifestyle companies find themselves playing an endless game of whack-a-mole with counterfeiters who make imitations of their products and sell them for far cheaper. This takes away potential sales and causes damage to the brand’s name. A customer won’t know that they don’t have a genuine article until they’ve already spent their money.
These are all expensive problems that could easily be dismissed simply as “the cost of doing business." But it doesn't have to be. There are companies working on the solutions that would prevent these things from happening in the first place.
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This is all thanks to a new technology called “smart chips.” When put into place on product packaging, these devices are able to track products along the supply chain to ensure the customer is getting exactly what they pay for. That could be food that is still fresh, medicine that isn’t contaminated, clothing that is actually name brand, or a number of other products.
The technology is just now being rolled out, [but it won’t be long before it becomes a standard part of everything you buy](.
And there is one small company making it all happen. [Click here for the details.](
Keep your eyes open,
[ryan_stencil_sig]
Ryan Stancil
Outsider Club, Contributing Editor
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