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    Irradiation Being Viewed As Risk Management Tool

    CHICAGO, Ill. - Banks, insurance companies and other institutional investors are starting to weigh the cost-benefits of irradiating ground beef, poultry and other foods, as part of their due diligence on loans to restaurant chains, food service providers, food processors and food retailers, according to Dr. Mark R. McLellan.

    CHICAGO, Ill. - Banks, insurance companies and other institutional investors are starting to weigh the cost-benefits of irradiating ground beef, poultry and other foods, as part of their due diligence on loans to restaurant chains, food service providers, food processors and food retailers, according to Dr. Mark R. McLellan, director of the Institute of Food Sciences & Engineering at Texas A&M University and president of the Institute of Food Technologists.

    McLellan said that financial investors' interest in food irradiation is a new development, even as recent as the last six months, based on inquiries he's received at the Institute of Food Sciences & Engineering.

    "The impetus is due to the 66 recalls for listeria or E.coli-contaminated beef, pork and poultry in 2002, totaling approximately 60 million pounds of meat, or nearly three times as much as in the prior year," McLellan said.

    "The largest of these recalls involved about 27 million pounds of product and cost $81 million, not including litigation costs. By contrast, Dairy Queen, one of the restaurant industry leaders in introducing irradiated hamburgers, estimates its costs for irradiated ground beef at 7 cents a pound. For the same amount of product, that would equate to $1.9 million, or 2.4 percent of the cost of the largest recall. It's no wonder then that financial lenders and insurers are taking a closer look at
    irradiation," McLellan said.

    Up to now, the primary drivers of food irradiation have been the consumer benefits of food safety consumer choice, McLellan said. "Additionally, there has always been the litigation issue, understanding that protection of consumers equates to protection of the company. Now, there's a second economic driver: the availability of investment capital for expansion and growth."

    While the retail sector of the food industry has led the way with irradiated product introductions, especially over the past year, McLellan foresees an acceleration of irradiated foods in the restaurant and food service industries, especially with the recent USDA provision for offering irradiated ground beef through the School Lunch Program. Public education will demystify the technology and lead to greater acceptance, he says.

    Calling irradiation "a pillar of public health," McLellan said just as there are few places today that sell unpasteurized milk, the same will be true in a few years for raw ground beef.

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