Product Recall and Subsequent Business Continuity Risks in Food and Beverage

Speaker A: Foreign. Welcome to an episode of Alliance Insights. I'm, um, Noelle Kottaspati with the Risk and Insurance Education Alliance. Today's session examines the rising risk of product contamination and recalls in the food and beverage industry, including why recalls are becoming more frequent, costly, and complex. Presentation will highlight the importance of proactive quality control, credit crisis response, business continuity planning, and recall insurance as essential tools for managing regulatory, reputational, and financial exposure. I'm pleased to have the expertise of my friend Zach Finn, director of Client Risk Management at Hub International, join us today for our episode. Zach, thank you for coming today.

Speaker B: Always a pleasure to work with you, Noel. Uh, I want to go ahead and get started and appreciate you, uh, giving me a good introduction. So, as Noel said, we want to talk about problems, contamination and recall preparedness today. And I'll break this down into a couple buckets. I'll start briefly with my, with my introduction and background, but really I'll talk about that as we go through the presentation. Um, because I want to spend more time talking about, you know, why recall readiness is so important and specific to food and beverage, um, what some of the top risk management issues you're going to see. And I really want to break that down between those inherent to the industry, uh, those inherent to the products you're producing, and then those inherent to your specific company. Um, and all those things can vary depending on what you do and who you're doing it for. Um, and then we'll talk a little bit about recall insurance and what to be thinking about as far as that goes. Um, as I talk about my background, you know, I'm an insurance and risk management nerd, uh, by design. That's what I went to school for. That's how I know Noel so well. Um, and I spent a lot of my career as in Fortune 500 risk management departments. Um, um, and one of those was a large consumer, uh, packaged goods food company. And I was there during a time of a lot of M and A activity where I got to see the inside of how a lot of food and beverage companies, uh, work. And what I can tell you contrasting that to earlier in my career where I worked for a casket company and a hospital bed manufacturer, and then before that, uh, an ATM and a cash register manufacturer. Uh, all those companies are likely to have recalls or, you know, events where they have to bring product back in or work on it. Um, what I can tell you in the food industry is things move a lot quicker, um, and they can impact a lot more people. Um, you know, in the casket industry. Number one, we didn't get too many complaints from our consumers as you might imagine. Um, hospital beds, again if you have an issue with those, you may be sending folks out to do warranty work in a hospital and you know, dealing with hundreds of units or maybe thousands of units, whereas you know, you may produce hundreds of thousands or millions of food units that can be out uh, on product shelves. So again, uh, the importance of recall readiness is really, is really high for the food industry. And I want to talk about some of the things that really drive that for the food industry. Why this preparedness is so important specific to the industry where I spent a lot of my time. Um, one of the other ways that I know Noel is in addition to being an insurance and risk management graduate myself, I uh, spent some time at Butler University, uh, in the Davie risk management program. Uh, and as a lot of great professors will tell you, professor doesn't always pay so well. So I spent some time as a Lloyd's of London product contamination consultant, uh, during those years working on upwards of uh, 40 uh, food recalls or stock withdrawals or pre incident work helping food companies understand their risk and what those things might be. Uh, so I spent a lot of time in the food industry and what I can tell you is there's some things that are really unique hazards for our industry. Number uh, one, if you're producing a product with no kill step number um, that's going to create some issues. Pasteurized, uh, products, you know, have that, have that all important kill step. Uh, I spent a lot of time working with coffee which if you're down in New Orleans, they'll tell you it's highly acidic and roasted hotter than the fires of hell and damnation. I won't try and do the accent, um, but because of that if you have good scales and magnetometers and sieves and you look at some of the inherent nature of coffee, as I said, how it's produced, roasted really hot, highly acidic, you really shouldn't have any issues associated with that versus say some of these prepared meal kits that are going out and you see, you know, really enticing, uh, ads for my Facebook feed to have to cook dinner anymore. But um, you got to think there's a lot of ingredients that go into those. Some of them may be raw ingredients. From m a regulatory perspective, if there's issues, if consumers are calling in with complaints or doctor's offices or identifying issues, um, the FDA or USDA depending on who regulates you can get involved pretty quickly. Um, we'll talk about some of the things with traceability that, you know, make that move a lot quicker today than it used to. Um, but some of the things, you know, one of the points I'd really drive home here is contamination isn't always going to be your fault. You have to think of it in terms of, number one, strict liability for product contamination, product liability. And you have to think about strict liability as far as supply chain. So if you're anywhere in the stream of commerce from producing the product, designing it, manufacturing it, selling at it, looking at it, uh, chances are trial, uh, attorneys or counsel are going to potentially come after you. So it's important to remember that. And then again, the bigger you are, the larger distribution, uh, the more, the more likely you're going to have, uh, run into instances. And then obviously retailers are going to require indemnification, right. If they've got empty store shelves or again, they're in the stream of commerce. So they may be brought in for a lawsuit regarding contamination with one of your products. So with that, I'll get into some of this top. You know, there's some of the industry considerations for food and beverage. Let me get into some of the specific food, uh, issues that might happen. And really, depending on the type of company you are and what you produce will depend on who regulates you. Um, if you're dealing with meat and poultry and eggs or, uh, you know, produced foods that contain those products, you're going to have the USDA there. Um, uh, with meat products, you're going to have USDA inspectors on site. Um, FDA is a more periodic inspection regime, so you're not going to have folks actually in your facility. Um, but that's the regulatory body that applies to a lot more, uh, food and beverage companies and frankly, both can apply to you depending on the scope of what you're doing. If you look across the two regulatory bodies, um, USDA is production without inspection, import violations, um, foreign material. I think that's kind of interesting, I think about cows and kind of foreign material. But then you have to remember they're dealing with product produced, you know, packaged foods that contain, um, meat. So, for example, a cheese pizza could be regulated by the fda. A, um, meat lovers pizza might have USDA regulation, uh, when the meat products are involved. So important things to consider from an FDA perspective, it's really the big three. Undeclared, um, allergens, foreign materials and bacterial contamination. Uh, undeclared allergens are good in that not everybody has a food allergy, but it can be bad. And Quite serious, because those that do it can be fatal for them. And so that's an issue where you have to really view it as, I mean, all these as life safety issues. But for undeclared allergens, I mean, that's going to be, you know, things that are in your product that are not supposed to be. It could be the labeling is wrong. Um, and I've seen, trust me, I've seen an entire brownie production line torn down to the bolt looking for a stray peanut. And that's an example of how good the scales were. They knew how much product went in and how much was supposed to come out. And apparently whatever came out was light about a peanut butter. Um, but you definitely don't want to be in a position where you're tearing down a production facility looking for a peanut. Um, and that was a lesson where, for that company, future production was segregated. Uh, production involving allergens was in its own contained area versus production that could. That, you know, was not worried about allergens. And that made the whole process a lot simpler. Again, you're going to weigh the expense of that of having a separate production area versus having to tear down an entire line looking for a peanut. Um, foreign material. We'll talk more about that later in bacterial contamination. Um, but again, those are the kind of things you want to look for. And one of the great things is you go to the FDA website and look at the recall registry and see exactly what's going on. Um, you know, if there's nothing going on for your company, great. Knock on wood. See what's happening with your competitors. Uh, there's no better lesson to learn than someone else's lesson that might apply to you. So now that we know that, you know, let's start to get into the risk management of how we prevent, control and handle these things. Um, and I'll start from the bottom and kind of work my way up. I mean, this is really, you know, quality control is your basic blocking and tackling table stakes for food production. Right. Do you have good sanitation? We talked about the importance of allergy controls, um, good manufacturing processes, um, supplier verification. Um, you know, one thing I will tell you in my entire career, whether it was as a risk manager or as a crisis consultant, I would say anecdotally, 80% of every incident I dealt with was from somewhere in the supply chain and not for the company itself. And what I would say is, nobody's going to care about your business more than their own. And if they're going to cut corners they're going to cut your corners before they cut their own corners. And then obviously, you know, the more complex your product is, again, a meal kit with numerous ingredients from numerous suppliers has a lot more opportunities for somebody to cause a problem versus, you know, roasting some peanuts and adding a few other ingredients and making peanut butter. So, you know, once you, you know, assuming. And again, you shouldn't be in the food industry if you, if you don't have these basic sanitation, um, allergy controls, you know, basic production, uh, quality control, things that you need in place, you shouldn't be in business. Um, from there, it comes down to traceability. Right? When I was an active crisis consultant and the last recall I worked on was maybe about a year, year and a half ago, I would say within four hours, you should be able to tell me, um, where all your contaminated product is from. From point of production all the way to store shelves. You should be able to trace it backwards, um, to where it came from. You should have sanitation records knowing if you produce 40,000 units on a line, did you clean that line before you produced enough? Other 40, did you clean it before you produce the prior 40? Um, and these are all things that, you know, I would recommend companies have within four hours and frankly, with modern technology, should, uh, really be instantaneous in this day and age. And as you're doing that, you want to think about, you know, and this is where we get into haccp. You know, risk management is great. We have a process, right? We identify risks, we measure how bad they can be and select different, you know, treatment techniques, prevention, control, insurance, um, you know, select, monitor, rinse and repeat. Um, HACCP is that for the food industry, it's hazard analysis and critical control point. And it's basically the risk management process for food safety, right? What are the hazards that could apply to your production? Uh, what are the critical control points? So I'll use an example here in a minute. In fact, we can go ahead and switch to that. Now, involving ice cream, and the slide's a little blurred there, but what you're looking at is a production flowchart for, for turning the raw components of ice cream into the delicious ice cream bar that I ate as recently as yesterday. Um, and if you think about it, listeria is going to be one of your major issues, uh, for ice cream. And where would you kill listeria, the hearty bug that it is? Um, through sanitization of your equipment, through pasteurization of the raw materials going in and then freezing. One of the problems with listeria is it's very resilient to cold, um, and you want to be able to take it down to a low enough temperature to actually be able to kill it. And so just going back to the last slide real quickly, haccp, uh, is where we want to think about, um, where those critical control points should exist in our production process. Um, and how do we monitor that? How do we know the pasteurization occurred? How do we know that we were at the right cold temperature, at the right temperature for the right length of time? How do we document corrective actions, verify those things, um, and continue moving forward? And so that's how I would think about, you know, loss prevention from a quality control perspective. Um, from an organizational resilience perspective, I look at more of the business. You know, the business. The business continuity planning, supply chain mapping, those kind of things. Um, I've been asked by a lot of CEOs, you know, what's my. What's my number one risk? And if they're asking me from the position of CEO of a food and beverage company, they're more than likely expecting me to say product contamination. Um, and if they have a good sense of humor, my first answer will usually be, I don't know. Um, and then the next answer will be the one where I hopefully don't get fired. As I say, look, you didn't tell me what your most important thing was. You have three production facilities producing a pasteurized canned vegetable product, and none of those facilities are at full capacity. And if one of them went down, you might have contract manufacturers that could step in and provide production. Your other facilities could pick up the slack. You might prioritize which products you're producing, uh, to produce the ones with the highest revenue or the most volume, uh, depending on what your competitive position is and what you need to preserve profits or shelf space or whatever that might be. But there's levers you can pull as it relates to those three production facilities where product contamination would be less of an issue than, say, if you had one peanut butter plant. Right? Salmonella loves peanut butter more than I do. Uh, for whatever reason, it's very hard to build a new peanut butter plant in this day and age because of the regulatory requirements and just how hardy salmonella is. And it is to stand up a plant that has the kind of quality control that can run without issues. Um, and generally, those plants run at 100% capacity with a high amount of business interruption. Right. If your plant is down and it's $100,000 every hour, it's down. The quicker you can make a good decision, the better. Um, but at the same time, the faster you make a bad decision, the worse it is. So business continuity planning is what allows you to think about these things beforehand. If I've got three production facilities with redundant capacity and contract manufacturing options, let's set that aside for the moment and think about what would we do if we lost our peanut butter plant tomorrow in the next hour, in the next month, in the next year? Um, and it doesn't matter whether it's a roaster fire or a wind event or a product contamination event, or the elephants finally figured out where we keep the peanut peanuts, which if you watch the Simpsons, it's a funny joke at, uh, least to me anyway. Um, but again, what are we going to do in those. In those first days and hours and weeks and months, regardless of the cause? And then we'll get into the actual. Okay, what would be the actual cause? And let's start to think about, you know, how to prevent those specific scenarios. And so if you go back to, you know, say, a peanut butter plant or any production facility that has a fire risk or a weather risk or a container contamination risk, we want to start to identify where we can reduce each of those scenarios and each of those risks, um, to prevent disruption. And so as it relates to product contamination, you want to start to think about, well, what's the likelihood that I'm going to have an event and how bad is it likely to be? Right. That's all. That's. That, that's what the whole risk identification process is about. As I said, a lot of the frequency we've already covered. Right. What kind of product do you manufacture? Do you have the quality control? Do you know what's going on with your supply chain? Um, and basically taking, taking the price of the product that could potentially be recalled times the quantity, uh, plus the notification costs and the transportation costs, and that should get you the amount of a direct recall. That's what I call a non bodily injury, non general liability, non CNN recall. That's just, we have bad product, we need to bring it back in, uh, test it, destroy it and replace it. Um, in fact, when I was a contamination consultant, the first questions I would ask are, is anybody hurt?

Speaker A: No.

Speaker B: Um, that's great. Uh, is this on cnn? No, even better. Um, in fact, the first question is, has it even entered the stream of commerce? Because if it hasn't left your facilities or your, or your warehouses or it's in your customer's, uh, warehouse, but it's not on the store shelves. If I can't buy it in my local insert, your favorite grocery store here, um, then we have a much smaller problem than if it is atmosphere, commerce, things that impact severity is again, you know, how much are you producing? What are your largest lot sizes? If you're producing 50,000 units versus a million units, um, how widely dispersed those are. I once worked with a, uh, poultry company that sold about $50,000 worth of chicken to several hundred fast food retailers. And if you think about it, there's a high fixed cost with going to each one of those retailers. If you could take that same, uh, production and sell it to a smaller population of stores, which isn't always possible. But if you have the opportunity to think that way, you can limit your recall exposure by limiting how widely dispersed any single lot might be. So getting into some, you know, the last couple scenarios that I've seen, ah, an example, and this is again one where thankfully nobody was hurt. Uh, nothing was on CNN. Um, we had 40,000 pounds of berries that had, uh, listeria contamination. Um, this was a result of a supplier failure. Failure. Um, some of the irrigation water was bad with wildlife contamination. And that's the thing to think about. I mean, a lot of, you know, sometimes companies get a hard time for having a contamination event, but you're producing, you know, millions of pounds of berries and, you know, you know, helping to feed consumers across the nation. And you got birds and animals flying around and doing what they do. Um, you know, there's always going to be contaminations and pathogens out there. In fact, I would argue they've always been out there. When I was in industry, there was a lot of peanut butter recalls that happened all at one time. Around, uh, the time that Peter Pan had their public recall that was on the news. Um, and that was frankly because we mapped the genome for salmonella. And so now all of a sudden, epidemiology, from an epidemiological perspective, when someone comes in and has symptoms, the doctor can send that off. They've mapped the genome for salmonella. They can tie that back to a specific product production line, even employees, I mean, cases. And guess what happened not too long after they mapped the genome for Salmonella, same thing happened for listeria. And if you recall, there was a lot of ice cream, uh, recalls that happened for listeria around that same time, uh, that that happened. And so again, this has always been something that's been in our food supply chain. We just have the technology now to be able to understand that quicker, tie it back to a point of origin. Um, and that creates more responsibility on, on the part of you as food and beverage manufacturers to understand that things that may have been blamed on Taco Bell or somebody in the 80s, it turns out they've been doing a great job all along. Uh, we've always known that. Um, but, uh, now we have the epidemiological and scientific evidence to really tie that back to its point of failure. And these instances, excuse me, uh, are not just one claim. It's one of those where you often get to two for one, maybe even three for one. Right? If you have product liability for bodily injury, someone's been injured from that listeria, um, that's a bodily injury claim. In addition to the cost to recall the £40,000 of berries, to inspect the production lines and the sanitation records to make sure the next £40,000 weren't bad, um, the value of the product, you're going to destroy, contract penalties from retailers or customers. And so all these things can add up. And by the way, all these things can be insured. Excuse me, let me get my slide going here. So we talked about, uh, in fact, I just mentioned you can get two for one, maybe even three for one as far as claims from a product contamination event. Let me unpack that, uh, for a minute here as we talk about the importance of preparedness and response.

Speaker A: Right?

Speaker B: If you have a product contamination event, then you're having that business interruption claim. Something's bad. We have to destroy that product. We have to, have to recall it, and we maybe aren't able to produce while we figure things out. And again, that's one of the things you want to know from a business interruption perspective, is that $5,000 an hour, is it $100,000 an hour, is it no dollars an hour of disruption because some other facility can pick up the slack. And so those. Answering those questions helps inform what comes next. Um, but the important thing to remember is consumer safety is number one. So if bodily injury is occurring, we've got a general liability claim that's going to be going on, maybe even a number of or excess claim if enough people are injured. Um, and then if you've not made the right decisions around product contamination or recall insurance or the right decisions around preparedness, you have a director's officers claim. And if you search in the news around product contamination, recall you to name any names. It's out there in the news. You can see companies that have run into difficulties that go beyond just your standard recall and bodily injury claim. They've now Got directors and officers, claims, and in some cases, things that aren't covered by insurance that end up falling to the executives, um, and other terrible consequences can happen, right? Plants shut down, employees are laid off. And so this is one of those losses that I would call one of those risks I would call a business killer. And so that's why it's important to have a really great preparedness, uh, and response plan. And so when you. And this is something you want to practice beforehand, by the way. If you're a good food company, you shouldn't have a lot of practice with product recalls. But at the same time, when I have a company that brags to me and says, you know, we haven't had an incident in 100 years, I view that, you know, risk and opportunity are two sides of the same coin. That's, that's a wonderful representation of how great you are on the good side of the coin. But it also means that you aren't well practiced from a recall perspective, and you may have developed some blind spot over the, over those hundred years. So we want to practice that, and then we want to understand if there's a recall, you know, how widely dispersed could it be, what's the depth of the recall? Uh, again, depending on whether it's entered the stream of commerce and whether it's going to cause death or illness or likely to cause more mild illness or it's just a quality issue, uh, really dictates the level of media response you're required to make and also want to make, um, depending on how serious the recall is, is going to require different levels of effectiveness checks to make sure that it actually happened. Um, if you're supposed to, you know, I would tell, uh, any food and beverage company in a crisis, like really within four hours, you should know where all this product's gone, where it all came from. Um, and you should be able to get it off every store shelf in America and in the world, really within 48 to 72 hours and frankly, even faster if you can help it. And so these are things that matter, um, to me, a good, A good recall, uh, task force is one where you don't want to have too many cooks in the kitchen. If I can use a pun for the food industry, you want a strong, empowered recall coordinator, someone who, like the conductor in an orchestra, who is, who is helping to manage the flow of information to and from, uh, what I would call the five Ps, someone representing your product. And so that would be anything associated with why it's contaminated. What do we need to inform the regulatory bodies what kind of scientific testing needs to be done. Someone representing people, both communicating to your own workforce as well as anyone who might be impacted, um, consumers or whoever might be impacted by the event. Uh, somebody representing your partners, and that would be your customers and your suppliers. I mean, you really should be able to contact your customers and have all those lists and phone numbers accurate and ready to go, all your supplier lists ready and accurate to go, such that you're making those calls immediately when this happens, in order to spread, uh, excuse me, rather prevent the spread of the issue from a property and business continuity perspective, you know, can you continue to produce in that facility? Do you need to shut it down? What does that look like? Um, you know, if you look at some of the historic recalls that have happened, particularly around listeria, facilities can be down for a long time. Trying to get rid of listeria from, from your production facility and equipment. How are you going to make product during that time? Can you even make product during that time? Um, and is your insurance going to be enough to keep you going? Depending on how long that is. And that answer is not going to be the same for everybody. Um, you know, if you think about insurance like a pair of pants, workers compared to workers comp insurance is like a pair of pants you can go buy at any retail store. Um, product contamination recall insurance is like a finely tailored dress or suit. It really needs to match your operations. And then of course the press, you know, everybody always likes to talk about the Tylenol cyanide recall from the 80s and what a great best practice that was. And for the 80s, indeed it was. If that recall were to happen nowadays, it would be a much, you know, that speed, it would be a business ruining response. Um, because social media and everything moves a lot faster these days. So you want to have someone who's your sole voice to and from the press and is also locked down your social media channels to make sure employees aren't talking about things that they shouldn't be talking about. Because behind those five Ps is the larger, you know, subject matter area experts that should be part of your broader, uh, your broader contamination, uh, response plan. Again, to have all those folks in the room at one time would be too many cooks in the kitchen, too many things going on, and it would tie up too many valuable subject matter experts that need to be on the ground handling the various things that are happening during this event. You know, legal needs to be reviewing statements from communication and helping with the response to regulatory bodies and you know, notifying the insurance companies, uh, obviously quality control is going to be doing all the things you would expect around laboratory testing and uh, remediating the facility, um, and on and on. Again, you can think about each one of those, uh, roles and what they do, uh, uh, for you and your operation or if someone's producing product on your behalf, um, how their company manages each of those subject matter experts and how they would respond in the event of a recall. And by the way, what happens if that person's not out? Do you have backups? Um, in fact, that brings me to a point that I would make about that recall coordinator. Uh, I once worked with a company that they needed to decide almost immediately whether to initiate a recall. And the only person in power to do that was the CEO who just got on a flight to Japan. And what I told them is you need to find somebody else who can make this recall or talk to the air traffic controllers and see if they'll do you a solid and patch you into the plane. Because if you don't make this decision now, I don't know if you have a company by the time that plane lands. And so those are the kind of things you want to think about. Because if there's going to be a loss, the universe, if nothing has a sense of humor about when those things will happen. Um, the other thing to consider is time. Time is not your friend. Again, every, if every hour your plan is down is $100,000 an hour, being able to execute a recall in a day instead of four days, it's going to add up to significant savings. The other thing is the longer this goes, the more information drips out, the more credibility is damaged, the more it goes from just a manageable problem to an out and out disaster. And that's usually how you end up on CNN or one of the news networks is when you mismanage the response, uh, process. Like I said, consumers are pretty forgiving. Right? You've got birds and animals all around your fields. You know, eventually they're going to get one past the goalie and you're going to be judged on how you respond to that. Um, um. And if you mess up that response, that's generally we're going to get in the most trouble. And that leads me to some of the hazards and complicating factors that are out there. In addition to that 24, 7 news cycle, um, you know, we have consolidation in the food industry. So, you know, products are distributed a lot more nationally nowadays. Um, I'm praying for the Day when we get an in and out burger in Indiana. They're now in Tennessee so I'm hoping that they'll be here before too long. Um, but again as a company grows, there's more opportunity for multi state outbreaks. Again, because of genome mapping and epidemiological evidence, we're now able to tie those issues back to a specific, uh, supplier or source. You can have no injury class action lawsuits. Um, you know, I found a finger in my chili. I wasn't injured, but I was grossed out. And I'm going to sue you for that. Um, you know, the same kind of antibiotic resistance that's present in the bacteria that can impact us as humans. We also have, uh, pathogens that are resistant to being killed. And so all these things add up. The kind of supply chain issues I talk about, strict liability, all, um, those things add up to make this an issue that again moves very quickly and can get really serious really fast. So let's talk about uh, recall, uh, insurance and, and some of the provider considerations. Some of these you want to think about, um, as you manage this exposure. And I'll tell you, this is one that I think is traditionally uninsured or underinsured more than it should be. Um, when I was a product recall crisis consultant, I really didn't see a lot of companies that would buy this. Uh, a lot of the companies that I saw on my list of clients were on the coast. Um, again these are specialty lines of coverage. Sometimes they may come from Lloyds of London or an excess surplus lines carrier. Some of the ways those products are distributed, you know, a lot of those underwriters may visit Houston or San Francisco or New York. They don't always make their way to Indianapolis. Um, the other thing you have to consider, and I got my insurance license when I came back to industry to do the great work that I get to do at Hub International, um, I had to sit for my insurance license again. And they didn't cover product contamination or recall insurance. Uh, and the insurance license materials that I went through, they didn't cover pandemics either by the way. So if we run into one of those, again, we're not training folks uh, for what the insurance options look like. Um, so this is one of those things where you can't take for granted that your agent is always going to know what uh, they don't know. And so what this coverage you know will cover is accidental contamination, malicious tampering, uh, product extortion. Those are the kind of the big three. Um, product extortion does happen. You know, if you don't give me X amount of money, I'm going to do such and such to your product. I actually, as a product contaminations crisis consultant, I work with a gentleman who, you know, asked him. What'd you do this weekend, Jim? Oh, I went out to the Black Hills of Germany and left a duffel bag with a million dollars in there for a product contamination event or extortion event, um, to which I was like, geez, that's a really interesting weekend. We're in the Black Forest. Did you say you were? Um, so again, you're not going to run into that very often. And one of the benefits of buying this insurance is having access to an expert like Jim who's actually knows how to get a million dollars in a duffel bag. That's not as easy to do as you might think it is from the TV and movies. And so again, malicious tampering. You know, my job's going away because you're shutting down my plant or our operations were consolidated. I'm going to mess with the product. So those things happen. They're not as common, but they do. Um, axial contamination, as I talked about and we saw that in the USDA and fd FDA data is really what, what you're more likely to run into, right? Those, the foreign materials, the undeclared allergens, mislabeled products, all those kind of things. Again, some of the other things you could run into ingredients that are impaired. We see a lot more wildfires these days than we used to. You could have smoke hit your crops and it's not necessarily dangerous from a bodily injury perspective. It doesn't hit the triggers from a product contamination perspective, but you can't sell it because it's got off flavors and off taste, in which case that happens to you. Actually, we know some food technology companies that can help reduce, remediate your product through technology. But um, it's not something that's generally going to be insured unless you're looking at, you know, some of the endorsements that you might be able to get through various insurers. Same thing for adverse publicity. Maybe your product's not impaired, but the news is showing your product when they talk about somebody else's. And I've seen that happen before. It's very frustrating. Um, you know, government mandated recall. So there's a lot of types of different types of ways you can find yourself in a recall in a contamination type incident, um, and different ways that coverage can help you respond to that. And really the biggest takeaway I would say is your coverage needs will vary. I think most of all based on the type of food and beverage company you are. If you're a branded company, you really care about, again, that brand and protecting it and rehabilitating it and worrying about adverse publicity and social media crisis response. If you're producing for somebody else, then you're steward of, of their brand. That's, that's, that's an even higher bar in my opinion. Um, so you've got that third party recall exposure, you're responsible for their loss of profits and contractual liability. Um, private label, again, you could have product refused, you could have government advisory triggers. There's different, uh, customer identification things that can apply to you. Um, so really the takeaway is this is again, as I said, not a one size fits all coverage. Um, um, that applies, but it's a good one to have. And so with that, um, I'll kind of park it on my bio, but I'll close with any questions uh, Noel might have at the end here. But I guess the biggest takeaways are, um, really understand how your product is made from farm to fork. I think that's the most important thing. How does a 5,500 pound sack of nuts turn into a jar of peanut butter? And where did that 5,500 pound sack come from? And what are all the perils, uh, literally and figuratively along that journey, uh, that could result in a contamination incident or anything, um, what could disrupt that journey from even a fire or any other type of risk management issue? And what do you need to do to protect your company, uh, going forward? And the other recommendation I would make is learn the language of your business. Uh, one of the things you'll see in my bio is I have a HACCP food safety certification. Uh, it's not because I, I feel like I'm qualified to go out and give HACCP grade food safety advice, but I want to be able to understand what those folks are saying because they're so, you know, the HACCP food safety experts and quality control experts are so critical to this exposure. And one of the things, as risk managers, we have the freedom to move around the business to understand what different areas of the business are doing and how those risks and opportunities impact other areas of the business. And one of the things we have to understand is, is the folks that we work with need to be free to do those things to run the business. And we have a duty to meet them where they are and speak their language. And not expect them to learn our language and speak ours. So I would never expect a food safety person to learn insurance and risk management ease. Uh, as I said, I'd rather get a food safety certification and do my best to translate my advice into language they understand. Um, and so with that, we'll close it out. And hopefully that went well.

Speaker A: Well, as always, it's gone well. Uh, Zach, at least from my perspective, I appreciate you, um, your willingness always to join us, um, whether it's in the. Your expertise in the world of risk management or early talent development. Um, we thank you for joining us. Um, and we're, uh, happy to share this presentation on all of our platforms. So if you enjoyed, uh, today's conversation and want to follow us for future ones, ones that include Zach and all of our wonderful volunteers, be sure to subscribe so you don't miss those. Um, and until next time, I'm Noelle Kataspati with the Risk Insurance Education Alliance. Take care.