Food safety, government regulations, and brand protection

Every year, approximately 40,000 cases of salmonellosis are reported in the United States and about 600 people die of it, according to the CDC. By Predrag Jakovljevic and Olin Thompson of Lawson Software

The US Centers for Disease Control (CDC) also reports that as many as 76 million illnesses are caused by food contamination every year in the US. In addition to the public cost, the impact of food safety lapses can be devastating within the food industry. While many food industry executives think of regulatory penalties as a risk, the major risks are potential shut downs or, even worst, more permanent damage to brands and companies. The news media of today is attuned to food safety stories. They know that food safety stories sell a lot of newspapers and generate a lot of TV viewers. Does the consumer care? A survey of the United Kingdom (UK) consumers conducted by the UK Food Standards Agency (FSA) revealed that 71 percent of consumers were concerned about food safety while only 16 percent were not.

Many food companies are investing significant money and effort to build awareness for their brands in the market, which strategy can pay-off amply in competitive, commodity markets. One highly publicized recall and the negative image generated in the media, however, can turn an established brand asset into a liability.

Nervous consumers can cause distributors and brokers to