U.S. product recalls surge 11% in 2023 to hit seven-year high

Sedgwick brand protection releases year-in-review analysis of 2023 recall data

MEMPHIS, Tenn., Feb. 15, 2024 /PRNewswire/ -- U.S. product recalls reached a seven-year high in 2023, increasing 11% from 2022 to 2023. According to Sedgwick brand protection's 2024 State of the Nation Recall Index report, there were 3,301 recall events in 2023 across the five industries tracked by Sedgwick. While the number of defective units recalled in 2023 did not surpass one billion, as seen in the previous two years, there were still 759 million units recalled. Although the number of defective units decreased nearly 50% from 2022, the number of recall events has now increased for two consecutive years. Companies need to remain vigilant about product safety.

This special edition of Sedgwick's Recall Index report goes beyond its traditional quarterly reviews, offering a year-in-review analysis of 2023 recall data and product safety trends. The report also provides essential insights and predictions from Sedgwick's brand protection experts and network of strategic partners on the legal, regulatory, and economic risks facing the automotive, consumer product, food and drink, medical device, and pharmaceutical industries in 2024.

2023 recall data highlights

• Automotive recalls decreased for the second consecutive year in 2023, falling from 955 in 2022 to 916. However, the number of units recalled increased 23% year-over-year, to 38.43 million in 2023, led by electrical system issues.
• The number of consumer product recalls reached a 12-year high in 2023, with 322 events. Similarly, the number of units impacted reached a seven-year high at 135.2 million units recalled in 2023. It was also a record year for fines with $55.3 million issued.
• There were 506 Food and Drug Administration (FDA) food recalls in 2023, a five-year high for the industry and 19.6% more events than were recorded in 2022. Undeclared allergens remained the leading cause of food recalls in every quarter of 2023. U.S. Department of Agriculture (USDA) recalls also increased, rising 41.6% year-over-year. The volume of units recalled also increased a more notable 132.8% from 2022 to 2023.
• The U.S. medical device industry experienced a second consecutive year of growth in recall activity, rising to 975 events, with three out of four quarters dominated by quality-related incidents. However, the number of impacted units fell to a six-year low, with 283.44 million.
• Recall events in the pharmaceutical industry reached a 19-year high in 2023, rising 42.4% from 2022 to 2023 driven by an increase in sterility-related incidents. In contrast, the number of units impacted fell 82.6% to 98.5 million in 2023.

What's ahead in 2024

• Automotive: While the automotive industry and policymakers are still focused on the transition to electronic vehicles (EVs), hesitation amongst consumers has prompted some manufacturers to revisit hybrids as an intermediate option to still make progress towards emission reduction goals. However, officials are still working to implement a nationwide charging infrastructure and to otherwise incentivize the manufacture and purchase of EVs and lower emission vehicles. The industry should also expect continued scrutiny of vehicles that use emerging technologies like autonomous driving systems, as regulators work to adapt rules to address driverless vehicles.
• Consumer product: In 2024, consumer product companies can expect aggressive enforcement from both the Federal Trade Commission (FTC) and Consumer Product Safety Commission (CPSC), with a greater focus on seller responsibilities and the duty to report product defects. As online shopping remains popular, scrutiny of secondary marketplaces is likely to continue, and regulators are also expected to remain focused on addressing artificial intelligence (AI) in consumer products. As we saw in 2023, the number of fines and regulatory actions will likely increase again in 2024.
• Food and drink: 2024 will see many changes for the food and drink industry, as the FDA continues its restructuring, including the creation of the Human Foods Program. Despite this restructuring, the industry can still expect regulatory scrutiny and enforcement activity to continue around food traceability and ingredient contamination.
• Medical device: Many medical device manufacturers could be impacted by the FDA's creation of the Digital Health Advisory Committee, which will provide guidance on issues relating to digital health technologies, including AI, wearables, virtual reality, and remote patient monitoring. While the FDA rolls out burdensome new regulations that will continue to evolve as new innovations spread in the market, the agency does seem to be trying to give manufacturers some ability to make minor adjustments without going through the onerous approval process.
• Pharmaceutical: The implementation of certain provisions from the Modernization of Cosmetics Regulation Act of 2022 (MoCRA) will remain a focus for the pharmaceutical industry, as the FDA irons out details and issues final guidance to aid manufacturers in the transition. In 2023, the FDA and Federal Trade Commission (FTC) worked together to protect consumers from improper or inaccurate listings in the Approved Drug Products With Therapeutic Equivalence Evaluations, commonly known as the Orange Book, a trend that is expected to continue in 2024.

"As product recalls reached a seven-year high in 2023, it is clear that strict regulatory enforcement is more than a passing trend," cautioned Chris Harvey, Senior Vice President of brand protection for Sedgwick. "2024 will see continued oversight from regulators, policymakers, and consumers, making it essential for businesses to plan and practice for product recalls and in-market crises."

To download the latest Sedgwick Recall Index report, visit Sedgwick's U.S. 2024 State of the Nation Recall Index page.

The Sedgwick brand protection Recall Index is published every quarter. It is the only report that aggregates and tracks recall data across multiple regulatory agencies and industries to help stakeholders navigate the regulatory environment, product recalls, and other in-market challenges. For more information, visit www.sedgwick.com/brandprotection.

About Sedgwick
Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. The company provides a broad range of resources tailored to clients' specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick's majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.

SOURCE Sedgwick Claims Management Services, Inc.