Online Extra: Following Every Link In The Food Chain
Brothers Doug and Edward Hawkins founded Litehouse Foods in 1963 at their father's restaurant in Hope, Idaho. In the beginning they sold fresh-made refrigerated salad dressings from old family recipes as a side business. By 1974, the salad dressings were pulling in revenues of $100,000 per year.
So the Hawkins brothers decided to turn their attention to salad dressing full time. Today, their company employs 500 people and grosses $100 million annually from sales of dressings, berry glazes, and freeze-dried spice mixes, among other goods. Shoppers can buy Litehouse products in most of the 50 states and at some of America's largest supermarket chains.
The Hawkins' recipe has remained essentially the same over the past 40 years. But the world of food processing -- the word used to describe the manufacture of everything from beer to steaks -- has become far more complex. Mad cow disease has spurred fears of beef and beef by-products from sick animals. The first reported case of mad cow disease in the U.S., last December, restoked fears that the brain-wasting illness had at last come to America.
In the 1990s, food-poisoning outbreaks hammered chains such as Jack-in-the-Box, which sold burgers contaminated with bacteria that killed four children. And of course, the September 11 terrorist attacks on New York and Washington, plus the dramatic increase in global terrorism ever since, have raised fears that the food supply could be a fat target for biological or chemical attacks.
What's a food company to do? In mid-2002, the Hawkins brothers signed up Atlanta software company Ross Systems (ROSS ) to install a so-called enterprise resource planning (ERP) system that would help the family business better track its manufacturing processes. At every point of production, a Litehouse employee enters information into the system that helps create a richly detailed view of what's happening.
For example, if a load of garlic granules comes in, the employee receiving the shipment enters the purchase order into the ERP system. When the time comes to use those granules to flavor a batch of dressing, the ERP system tracks their origin and notes which batches of salad dressing they're mixed into. That information is then printed on each container of dressing.
JOB NO. 1.
Litehouse quality-control manager Tony Butler says the company can thus track the exact source of any ingredient in any one of its products within 15 minutes, vs. the five or six hours it would have taken with the previous system -- an eternity in case of food poisoning or bioterrorism.
Litehouse has never had a recall, but Doug Hawkins isn't taking any chances. "Our recipe is the most delicate or fragile salad dressing on the market," Hawkins says. "Because of that, quality control has been paramount."
Better quality control and auditing isn't just good business -- it's also becoming the law. Both the European Union and the U.S. now require companies to carefully trace the origin of food products from the time ingredients enter a plant. "The FDA said, 'If we have reason for concern, you need to be able within four hours to identity the sources of all the ingredients that go into any finished products,'" says Scott McLeod, vice-president for marketing at Ross Systems. "A lot of companies are reacting to that -- and a lot of them can't [do it now]."
Most food companies are reluctant to discuss their specific safety measures for fear of tipping their hands. "Our production methods and food-safety and security programs are proprietary, especially in light of recent events," says Cathy Pernu, a senior manager with Kraft Foods (KFT ) in an e-mail. "We're confident we're doing what we can to ensure the safety of our products." Pernu adds that Kraft has sunk $30 million into shoring up its security in ways that go beyond what the government requires.
That's becoming par for the course: Industry experts say every major food manufacturer has given its plants and procedures a rigorous once-over to trace products and intercept problems. "Since 9/11, they've moved to shore up their response and recovery plans," says Jesse Majkowski, an associate with consultancy Booz Allen Hamilton and the former U.S. Agriculture Dept. assistant administrator for Food Security & Emergency Preparedness.
Making food more traceable is no easy feat. A single batch of beef can contain meat from hundreds of cows. And lots of food products contain dozens of ingredients from different sources. That has caused a shift in the way food companies view their entire supply chain.
ON THE SCENT.
"Most of my companies have looked very hard at their security measures," says Susan Stout, vice-president for federal affairs at the Grocery Manufacturers Assn., an industry trade group. "They now perceive them in a different light. It's not as much protecting the perimeter of people coming in as it is protecting the whole chain of custody of their product."
To help do that, they're using technology from the likes of SAP (SAP ), Siemens (SI ), Honeywell (HON ), and Ross. Beyond enhanced adaptations of existing software, food companies are considering exotic technologies. Using optical sensors to map chemical footprints and electronic "noses" to spot minute changes in odors that might indicate a problem, these gadgets could one day allow manufacturers to detect bacterial or chemical contamination in real time.
Such systems, many of which are based on military technology, are already in the prototype phase in Europe and the U.S., says Booz Allen's Majkowski. Still, most are a few years from widespread deployment. So in the meantime, food manufacturers are tinkering with new ways to sterilize food, including the use of high-pressure processes during manufacturing to kill germs.
Other researchers are working on ways to ensure that food, once it's packed, maintains its integrity, or at least offers a warning if it has started to go bad. "The solution rests on having devices that will maintain the integrity of the packages and the seals and issue some sort of alarm if the package is altered or disrupted," says Gustavo Barbosa-Canovas, a professor of food engineering at Washington State University.
For now, most food companies are adding patches to their production lines rather than rebuilding them from scratch. "When you start to change the processing line, you need a tremendous amount of capital," says David Lineback, director of the Institute for Food Safety & Applied Nutrition at the University of Maryland.
Even so, the improvements so far are significant -- and should deliver not only improved safety but a healthier bottom line. Being able to better track production has allowed Litehouse to streamline its purchasing schedule and stockpile fewer ingredients in bulk.
"It has saved us a lot of money," says Hawkins. "We can plan everything much more accurately." Apparently, vigilance can mean both doing good and doing well.