This article outlines the key issues and hazards in food safety and how associated risks can impact consumers, protein producers and investors.
Why food safety risks matter?
Food safety describes the practices for handling, processing and distributing food in ways that prevent foodborne illnesses. Food safety risks directly affect the whole agri-food industry, as well as imposing wider indirect costs on economies and governments.
In the UK alone, the cost of food poisoning is estimated at £9 billion (US$12.2 billion) each year. For producers, it can cost over US$10 million to recall a product, due to the logistics, transportation, labour and indirect costs associated with lawsuits and a company’s damaged reputation.
Risks from foods of animal origin can arise during production, slaughter, processing, storage, distribution or when food is handled by consumers. Demand for protein in all its forms is expected to grow significantly as an increasingly affluent global population tops 9 billion by 2050.
Food safety is a critical factor in global food security. Scandals and livestock pandemics such as Avian Flu can also have significant impacts on the value of animal protein producers.
Hazards affecting food safety
Biological hazards: Biological hazards can come from raw materials or from food-processing steps, and include harmful bacteria, viruses or parasites such as salmonella, hepatitis A, E.coli, and norovirus. These are often referred to as foodborne illnesses.
Chemical hazards: Chemical contamination can happen at any stage in food production and processing. Chemicals, whether naturally occurring or intentionally added, are not hazardous if properly used or controlled. However, some can cause illness or injury due to immediate or long-term exposure, through allergic reaction or toxicity.
Physical hazards: Physical hazards include foreign objects in food, such as glass or metal fragments, which can cause harm when eaten.
Why is food safety a material financial risk and opportunity for investors ?
Food safety is one of the most immediate material risks related to investments in meat, dairy and other foods.
In the first quarter of 2025, dairy products led all categories in recall volume, driven by microbiological contamination and food handling issues, while poultry recalls more than tripled compared to Q1 2024, largely due to Salmonella and Listeria contamination.
US research shows that the most hazardous meat and dairy recalls increased by 83% between 2013 and 2017, relative to an overall increase in recalls of 10%.
Compliance failures and safety lapses can lead to fines, reputational damage and supply chain disruptions, while the cost of compliance with increasingly strict regulations can erode margins if not carefully managed.
Food safety also presents opportunities. Companies with strong standards and techniques can build consumer and investor confidence, access markets with stricter regulations, align themselves with consumer and investor sustainability preferences and future-proof themselves against new regulatory changes.
Food safety regulations
Governments, consumers and protein producers are increasingly focused on food safety risks, particularly in the aftermath of outbreaks and incidents:
In 2024, a Salmonella outbreak impacted egg production in France, resulting in the recall of over 3 million shell eggs prompted by a cluster of eight cases. Globally, Salmonellosis is a serious health concern, causing ~93.8 million incidences of gastroenteritis and 155,000 deaths per annum.
That year, the Chinese National Health Commission released draft regulations for new food labelling requirements (the Food Safety National Standard for the Labelling of Prepackaged Foods and Measures for Supervision and Administration of Food Labelling). Increased regulations have resulted in a 78% increase in imported food being rejected at customs due to quality and safety violations.
Outbreaks of Avian influenza in 2024 and 2022 have caused widespread infection in dairy cows and poultry in the US, costing the Department of Agriculture US$1.1 billion in egg farmer compensation, since 2020, tightening egg supplies and driving up consumer prices.
In 2023, the US Food Safety and Inspection Service proposed a new regulatory framework to reduce salmonella illnesses attributable to poultry.
In 2022, the UK invested £1.6 million (US$2.2 million) in a new Food Safety Network, while the FDA issued draft guidance for action on lead levels in infant foods as part of its Closer to Zero strategy on contaminants.
Food safety and sustainability
Closer adherence to food safety regulations can increase the environmental impact of food production:
Food waste: Stricter safety standards can mean some edible food is rejected, increasing food waste and associated greenhouse gas emissions if the waste is landfilled.
Excessive packaging: Packaging to promote food safety can result in increased single-use plastics, leading to environmental pollution.
Energy and chemical usage: High-energy or chemical-intensive processes to meet safety standards can increase the GHG intensity of food production and the risk of chemical contamination.
Summary
Food safety has wide-ranging impacts, with numerous material sustainability risks and opportunities for investors, particularly as governments introduce increasingly strict regulations to mitigate the possibility of disease outbreaks. The costs of not prioritising food safety can have significant public health and economic consequences.
Reference
[1] Centers for Disease Control and Prevention. (2022). Current bird flu situation in wild birds.
[2] FDA. (2023). Environmental contaminants in food.
[3] FDA. (2024). FSMA final rule on requirements for additional traceability records for certain foods.
[4] FAO. (2020). COVID-19 and food safety: Guidance for food businesses.
[7] FSSAI. (2019). FSSAI notifies new packaging regulations, replacing packaging requirements in FSSR.
[8] Fusaro, D. (2023). Food safety priorities for 2023. Food Processing.
[9] Grace, D. (2015). Food safety in developing countries: An overview.
[14] Njunina, V. (2021). Food safety definition & why is food safety important. FoodDocs.
[15] OECD (2025). OECD-FAO Agricultural Outlook 2025-2034. OECD Publishing.
[16] PIRG. (2019). How safe is our food?
[17] Porritt, J., & McCarthy, M. (2015). The global protein challenge.
[20] The US Congress. (2021). Protecting America’s Meatpacking Workers Act of 2021.
[21] Zmuni. (2025). 2024 in review: Key food regulatory updates in China.
