National director of product recall for food and agribusiness, Arthur J. Gallagher & Co.
As the new national director of Arthur J. Gallagher & Co.’s food and agribusiness product recall division, Steve Kluting is helping the risk management firm’s clients cope with food recall situations, the frequency of which is affecting public perception. Thanks to newer technology, advances in communication and data sharing, the current food supply is “plenty safer” than in prior years, Kluting said. A food-industry attorney for more than 13 years for the Grand Rapids-based law firm Varnum LLP, Kluting spoke with MiBiz about his experiences with food laws and how he helps clients manage and prepare for crises.
The FDA is changing the way it implements food recalls to include more information about the stores involved. How do you see the practice?
I think it’s intended to benefit consumers, and (they’re) trying to reach more ears. There’s obviously some costs to the industry from it, as well. But if you’re consumer-focused, that’s the number one priority in these recalls: to make sure that the public health is protected.
What are some issues in the food industry that most have your attention right now?
Recalls are performed in a way … to protect the public health, so I don’t know that it’s a concern. But I think what’s driving a lot of what’s happening in the recall world, at least as it relates to food, is that food safety incidents are getting solved at a higher rate than they used to.
Why is that?
That’s probably driven by a few things: advanced technology in package and detection and traceability, and stronger regulatory scrutiny. Regulators are doing more inspections of facilities than they used to, and they’re doing more product sampling and maybe most importantly, they’re doing a lot more swabbing at facilities when they do inspections. They take a swab of a drain or a countertop or some equipment, and because of the advances in the technology, they’re able to test those swabs cheaper, faster, (and) more accurately than they used to.
How is technology helping mitigate some of the risk in these recalls?
Among consumers, social media is connecting people more and more, and you get the opportunity now to connect to people who got sick from the same place or from the same food that you did that you otherwise would have never connected to. Social media’s kind of making that happen, but maybe even more importantly, there’s more data-sharing among regulators. That’s because there’s new databases that the regulators maintain with the DNA fingerprints of pathogens.
How are all these factors aligning to affect food producers and retailers?
The advances in technology, the advances in data sharing or communication among regulators and consumers, and stronger regulatory scrutiny … those (are) three legs to the stool that these events are just getting solved more frequently than they used to. It used to be that things didn’t get solved. People would get sick and no one would be able to figure it out.
As these recalls become more frequent, there’s a public perception that food-related risks have gone up. Do you think our food supply is safer than it used to be?
I think it’s plenty safer. There’s a big piece of legislation that went through in 2011 called the Food Safety Modernization Act. … It was really the biggest overhaul of the regulatory scheme relating to food safety since the 1930s. … While there may be a (public) perception of more food recalls, I think it’s because these events are being solved more frequently. I think that’s a good thing because … contaminated food is getting out of the hands of the public.
How did the law change producers’ behaviors to focus on safety?
(The act) has driven food companies to focus a lot more time, energy, and money on their food safety efforts. That’s driven by this law, (and) it’s also driven by the big-box retailers like Walmart and Costco and Meijer, who require suppliers to do a lot more than they ever used to as it relates to food safety.
How are you helping some of your clients with better decision making?
When one of these (food recall) events happens, companies think about three things: the first thing they think about is how do we, from an operational standpoint, make sure that we’re able to conduct the recall effectively? If we’ve got a bad product in the marketplace, we want to make sure we know how to communicate it and go execute the recall and get the product off the shelves.
The second thing they need to be thinking about is finance. … How do we make sure that we can financially survive one of these events? And again that’s where I do most of my work.
The third prong is reputation. If one of these events happens, we have got to do things in a way that makes sure the brand isn’t destroyed. The biggest priority is protecting the public health, but those three things are what food companies need to be thinking about when one of these events happens.