Jeremy Schutz serves as Director of Business Development for Sedgwick Brand Protection where he helps companies in the consumer product, food and beverage, medical device, and pharmaceutical industries protect their brands before, during, and after a recall. Jeremy brings to this role more than 20 years of experience helping businesses solve some of their most pressing challenges.
Richard: Your company, Sedgwick is the publisher of the Recall Index, a resource for information on “past, present and future product safety trends and recall data. Consumer Products is one of the categories you cover. Can you tell us about the Recall Index, how it is compiled, and what executives in the toy industry can learn from it.
Jeremy: The Recall Index compiles data from the CPSC, USDA, FDA, and NHTSA from the previous year and quarters to highlight trends in product safety. In addition to providing unrivaled analysis on the latest product safety regulation and recall data, the Recall Index also features insightful perspectives from our strategic legal partners on the regulatory priorities facing U.S. industries.
Downloaded by the world’s leading brands in over 100 countries, the Recall Index has established itself as a key aid in helping mitigate recall risk, litigation and reputational damage caused by product crises and in-market events.
It serves as a valuable guide highlighting how products may be regulated from quarter to quarter and year to year. For example, the CPSC took a much more aggressive enforcement approach in 2022 with the highest number of recalls issued in the past six years. Additionally, more than $38 million in civil penalties were levied to manufacturers who neglected to respond to product safety in a timely and effective manner.
The safety of children and infants has always been a high priority by the CPSC. This is more apparent now than ever as new laws have been instituted for the prevention of tip overs with clothing storage units and the banning of padded crib bumpers and incline infant sleepers.
Another topic that will continue to have an intense focus by the Federal Trade Commission (FTC) and the CPSC is Perfluoroalkyl and Polyfluoroalkyl substances (PFAS).
In addition to our U.S. Recall Index report, we also publish a European edition which analyses key product safety data and trends from regulatory agencies across the EU and UK. We take consumer products one step further there, breaking the category down into clothing, electronics and toys sectors. The latest edition of the European report can be downloaded here: https://marketing.sedgwick.com/acton/media/4952/gte
Richard: In what ways does your report differ year to year?
Jeremy: The Recall Index is consistent in approach but differs with the data provided from the regulatory agencies. Each quarter is a snapshot of the previous quarter’s trends. Once a year we publish a State of the Nation that compiles all data from the previous year and compares it with years prior.
The report also reflects the regulatory requirements that may be play with each agency.
Richard: How do toys rank when it comes to recalls?
Jeremy: Of the 78 consumer product recall event recorded by the CPSC in Q4 2022, Toys ranked third with nine. Sports & Recreation led with 21 events, followed by Electronics with 13. For context, Sports & Recreation has been the leading category of consumer product recalls for the past eight quarters. When looking at 2022 as a whole, Toys ranked fourth in terms of consumer product recalls (with 28 events), behind Apparel (29 events), Home Furnishings and Décor (31 events), and Sports & Recreation (77 events).
While Toys experienced a surge in recall events in 2022 (increasing 300% from 2021), the number of units fell dramatically from 10.1 million to just 1.4 million. This however was caused by a single anomalous recall of magnets in 2021 which impacted 10 million units.
Richard: What categories of toys are currently most prone to recalls?
Jeremy: Toy recalls (by units) in 2022 were dominated by “Plush” items which accounted for a total of 626,000 units. This was followed by Play Tents and Playhouses with 252,000, and Magnetic Balls with 120,000.
There have been over 200 toys recalled in the past ten years. Of these the most common theme are toys with loose parts that can cause a choking hazard. Additionally, sharp parts, and material that exceeds federal limits on toxicity are a high concern when manufacturing.
Richard: What types of mistakes are occurring that lead to recalls?
Jeremy: The biggest mistake that manufacturers make when it comes to recalls is not having a firm understanding of the regulatory requirements that accompany the sale of such products. Prohibitive material, lack of testing and certification, as well as mislabeling can cause major issues and potential litigation. All toys intended for use for children under the age of 12 must have a Children’s Product Certificate and be tested by a CPSC approved third party laboratory.
Richard: How can readers learn more about the Recall Index?
Jeremy: The Recall Index is published quarterly. Readers can download both the U.S. and European editions clicking here.
Sedgwick provides a free webinar that reviews the data each quarter.