By Chris Harvey, VP, crisis solution
The COVID-19 pandemic has changed the business world in numerous ways. Virtual meetings, remote work schedules, travel restrictions, and supply chain volatility are just a few examples of the new reality we’ll inevitably face ongoing. To that list you can also add stricter regulatory oversight and enforcement.
The rise in recalls and regulations
The number of products recalled in the U.S. this year has now surpassed 1 billion. Only two other years on record have breached this threshold: 2018 and 2021. In those years however, it took the full year to achieve, whereas in 2022, it took just the first seven months – setting this up to be a record-breaking year for recall activity.
Legislators and regulators alike have tightened their inspection of every sector of the economy, enacted new standards and directives, and begun publicly naming businesses they perceive to be in violation of the law. Businesses face new risks that are getting harder to manage if you include geopolitical concerns and the difficulties brought on by persistent public health problems and disruptive supply chain issues.
Further, consumer groups and Congress are increasingly pushing regulating agencies to make changes that require companies to be more proactive in their recall and risk planning, and they are not afraid to call out businesses by name to prompt them to act. For example, members of Congress have in recent years become more openly critical of corporate-backed attempts to artificially influence rulemaking at the FDA, USDA, CPSC, EPA and other federal agencies. Agencies are also not afraid to use the power of public opinion to get companies to take action.
Recommendations moving forward
In light of these new and ongoing challenges, businesses should constantly review and update their product recall, crisis, and communications plans to ensure they can withstand the stress of a recall or other product-safety issue.
Having a good relationship with regulatory agencies is key, especially when seeking to influence regulations or when facing a product recall. We’ve already seen what power regulatory agencies have when regulated companies fail to maintain good relationships with them, or worse, create tense or adversarial relationships. The result is often ruinous to a business’s sales and reputation.
Living in such a globalized and connected environment, it is imperative for businesses to be aware of all the changes surrounding them. Industries evolve based on changing legislation, advancements in technology, shifts in consumer preferences and behaviors and the growing complexities brought about by the transformation of supply chains.
The recent infant formula shortage prompted the Federal Government to request supplies from neighboring countries. Congress, along with multiple state and federal agencies are examining that crisis to determine what changes may need to be made both in terms of the FDA’s response and in adding resiliency to the supply chain.
As agencies adjust to a post-pandemic world, companies are also trying to regain ground lost over the past two and a half years. But still, new issues arise. Unfortunately, business crises – especially product recalls – are unavoidable in today’s exacting world.
Companies can lessen the effects of product crises and safeguard their brand if recall and remediation strategies, as well as the testing and updating of those plans, become as routine as other business operations. To get more recall data, trends and predictions, along with insights and commentary from some of our strategic partners, visit our website for additional resources.