AMR Research study finds most food and beverage companies lagging in adoption of modern traceability systems

According to a new study conducted by AMR Research, a majority of food and beverage companies surveyed participated in at least one product recall in 2007 with more than half of the losses associated with those recalls exceeding $10 million. In fact, the study, which was developed in conjunction with Lawson Software (Nasdaq: LWSN), found that 40 percent of respondents had incurred losses of at least $20 million in 2007. This is despite the fact that traceability processes and systems can make many of these recalls avoidable.

The AMR Research study, “Traceability in the Food and Beverage Supply Chain,” conducted by Research Directors Lora Cecere and Lucie Draper, and Senior Research Analyst Simon Jacobson, surveyed companies in the United States, the United Kingdom, France and Sweden. More information is available at www.lawson.com/pressroomtracestudy.

The study reveals that, on average, it takes food and beverage companies 14 days to sense the need for a recall and 34 days to enact it. By that time, less than 40 percent of the affected product can be collected because the rest either has already been consumed or thrown out, respondents said.

“Despite a perception among food companies that they’re doing a good job managing product quality, the staggering cost of recalls proves ‘business-as-usual’ isn’t working,” said Rob Wiersma, industry strategy director for Lawson. “Food producers can be much more proactive in managing food safety to improve product quality and reduce supply chain risk.”

While the food and beverage industry has been slow to adopt modern traceability software, many companies appear to recognize it may be time to change. More than three in four companies surveyed plan to spend money this year to improve their time to sense a quality issue and enact a recall. An equal share of respondents plan to invest in the improvement of supply chain traceability this year.

Modern traceability software like Lawson Trace Engine helps food companies track information about every raw ingredient they use, such as when an apple was harvested, at what temperature it was shipped, and in which batches of which product it was used.