Executive Summary
The consumer-packaged goods and restaurant industries play a crucial role in the global food supply chain, providing a wide variety of food options that consumers rely on for their daily nourishment. However, the integrity of food quality is continually challenged by production practices, and contamination risks, as highlighted by recent food recalls and foodborne illness outbreaks.
An extensive range of food items are processed, packaged, and marketed to both consumers and restaurant proprietors. The safety and quality of these products are paramount, as they directly impact public health and brand reputation. Recent food recalls highlight the vulnerabilities in food production and distribution, emphasizing the need for stringent quality control measures.
We will cover food quality standards, and analyze high-profile food recalls, including those involving produce, chicken products, deli meats, and frozen waffles, among others. Some of these incidents have required significant monetary investment to resolve, such as the reported $100 million associated with the recent McDonald’s outbreak, as well as the much greater impact that comes with deaths caused by something that is entirely preventable.
Despite Current Public Perception, Foodborne Illness Outbreaks are Trending Down
While there has been a significant amount of media coverage around foodborne outbreaks recently, the number of these incidents has been declining for over 20 years. This improving trend was accelerated during the pandemic years when most Americans were cooking at home.
Source: U.S. Centers for Disease Control and Prevention
Foodborne Illness Impacts Every State
Source: U.S. Centers for Disease Control and Prevention, 2017
Food Quality Standards Help Provide Consumer Protection
U.S. food laws provide an enforceable, standardized legal framework that ensures consumer protection and accountability. This is accomplished through a network of agencies that establish and enforce food safety standards like the Food & Drug Administration (FDA), United States Department of Agriculture (USDA), Environmental Protection Agency (EPA), and Center for Disease Control and Prevention (CDC). Food quality is governed by various standards and regulations that are focused on consumer protection and the prevention of outbreaks.
Hazard Analysis Critical Control Point (HACCP): A management system that helps manufacturers identify and control food safety hazards. It is used to analyze and control biological, chemical, and physical hazards at every stage of food production, from raw materials to consumption. The seven principles of HACCP are:
- Conduct a hazard analysis to identify potential hazards at each stage of food handling.
- Determine critical control points (CCPs) to identify points in the process where hazards can be prevented, eliminated, or reduced to safe levels. Examples of CCPs include thermal processing, chilling, testing ingredients for chemical residues, product formulation control, and testing products for metal contaminants.
- Establish critical limits and set maximum or minimum values for food safety parameters.
- Establish monitoring procedures to create a system to monitor the control of CCPs.
- Establish corrective actions to determine what to do if monitoring indicates a deviation from a critical limit.
- Establish verification procedures to validate the HACCP plan and confirm that it is working.
- Establish record-keeping and documentation procedures to create records of all procedures and their application.
USDA, FDA, and Food Safety and Inspection Service (FSIS) agencies conduct regular inspections and surveillance to ensure compliance with food safety laws. This provides a system of oversight and a high level of accountability which is essential for maintaining consumer trust and preventing foodborne outbreaks.
Third-Party certifications such as the International Organization for Standardization (ISO), Safe Quality Foods (SQF), and Good Manufacturing Practices (GMP), provide additional assurance of quality. These standards must comply with the FDA Food Safety Modernization Act of 2011.
Rigorous Lot Tracking to ensure that in a moment of crisis, all product batches impacted can be quickly identified and recalled.
Foodborne Agents Still Create Significant Public Health Risks
Even though these practices are in place, the CDC estimates that each year roughly one in six Americans (or 48 million people) gets sick from foodborne illness. Of those who get sick, about 128,000 are hospitalized and more than 3,000 die of foodborne diseases.
Source: U.S. Centers for Disease Control and Prevention
Source: U.S. Centers for Disease Control and Prevention
Source: U.S. Centers for Disease Control and Prevention
Many Companies Face Reputation Risks from Recent Food Safety Incidents and Recalls
McDonald’s E. Coli Outbreak - October 2024
McDonald’s recent outbreak caused by sliced onions had a significant financial cost to the organization of a reported $100 million. According to the CDC, most people affected by this outbreak reported eating the Quarter Pounder hamburger at McDonald's before getting sick.
As of November 13, 2024, the CDC said that epidemiologic and traceback information shows that fresh, slivered onions are the likely source of illness in this outbreak. Taylor Farms, the supplier of slivered onions to the affected McDonald's locations also recalled onions. Food service businesses were contacted directly by Taylor Farms. These onions are past their shelf life and are not available for sale. The likelihood of contaminated onions still being available for sale is low.
As with most foodborne outbreaks, the true number of sick people is likely much higher than the number reported, and the outbreak may not be limited to the states with known illnesses. This is because many people recover without medical care and are not tested for E. coli.
The documented outbreak across 14 states led to 104 illnesses, 34 hospitalizations, and one death.
Immediate Actions and Consumer Communication:
- McDonald's issued a statement that food safety is their top priority and that they took swift action to protect customers and public health.
- McDonald’s collaborated with the CDC, FDA, and local health departments to monitor the situation and provide updates as investigations progressed.
- Temporarily removed Quarter Pounders from the menu in some states.
- Communicated that beef patties were unlikely the source of contamination as the beef patties in Quarter Pounders are cooked at a high enough temperature to kill E. coli and come from multiple suppliers.
- Stopped using fresh slivered onions in some states while the source of the illness was confirmed.
- McDonald's found a new supplier for the restaurants that had stopped serving Quarter Pounders with onions.
- The company committed to transparency, sharing investigation findings with the public to rebuild trust.
Treehouse Foods Frozen Waffles Recall – October 2024
While there were no confirmed reports of illness linked to recalled products, Treehouse Foods took the precaution of voluntarily recalling all products manufactured at one of its facilities due to concerns surrounding Listeria contamination. The issue was discovered through routine testing.
Products recalled included frozen toaster waffles, Belgian waffles, and pancakes. Products were carried by most major retail chains, including Walmart, Target, Aldi, Dollar General, Kroger and Publics, and more. The recall included brands like Kodiak Cakes, Nature's Path Organic, and Wild Harvest.
Immediate Actions and Consumer Communication:
- The company issued a recall notice detailing the affected product sizes, lot numbers, and where they were sold.
- Retailers were instructed to pull the affected products from shelves and issue refunds to customers.
Boar’s Head Meats Recall - July 2024
Boar’s Head, recognized for its premium deli meats, faced a recall due to potential listeria contamination in certain deli meats, which can pose serious health risks, especially to vulnerable populations such as the elderly and immunocompromised.
On July 25, 2024, Boar’s Head recalled liverwurst products made in their Jarratt, VA facility, which has since been indefinitely closed and the product has also been permanently discontinued. Other recalled products made at the facility included ham, bologna, frankfurters, sausage, and bacon. These products had significant distribution and were sold at various grocery stores across the U.S.
The documented outbreak across 19 states led to 61 illnesses, 60 hospitalizations, and 10 deaths.
Immediate Actions and Consumer Communication:
- Affected products were identified and consumers were notified of specific batch numbers to discard due to contamination.
- Retailers were notified and informed to remove the affected products from shelves immediately.
- The company engaged in public communication and outreach to inform consumers through social media and news outlets.
- Appointed a new Chief Food Safety & Quality Assurance Officer (CFSO), reporting directly to Boar’s Head’s president.
- Established a “Boar’s Head Food Safety Council” comprised of independent industry-leading food safety experts, some of whom assisted with the investigation at the Jarratt facility. The Food Safety Council will assist with the company’s adoption and implementation of enhanced quality assurance programs.
- Creation of an enhanced companywide food safety and QA program. The goal is to develop an industry-leading program that addresses food safety standards and strengthens a culture of food safety throughout the supply chain.
Tyson Chicken Recall – November 2023
Chicken recalls have become increasingly common due to contamination risks, primarily from pathogens such as Salmonella and Listeria Monocytogenes. These bacteria can lead to severe foodborne illnesses, affecting a significant number of consumers. However, in recent years there have also been recalls for extraneous materials ending up in products, due to issues in production practices.
In November 2023, a large-scale recall was initiated by Tyson Foods after several consumers reported pieces of metal contained in frozen, cooked, breaded chicken patties. The products affected, produced in Berryville, Arkansas, had been shipped to distributors in Alabama, California, Illinois, Kentucky, Michigan, Ohio, Tennessee, Virginia, and Wisconsin.
The recall affected approximately 30,000 pounds of the popular Tyson Fun Nuggets.
Immediate Actions and Consumer Communication:
- The company issued a swift recall on the product in early November 2023 after consumers reported finding metal fragments in the product.
- The Food Safety and Inspection Service issued consumer guidance, advising consumers to check their freezers for specific product codes and to return or dispose of any affected items.
- The FSIS launched an investigation to trace the source of the contamination, focusing on processing plants and farms, which eventually led back to a production plant in Berryville, Arkansas.
While Incidents Occurred Many Years Ago, Chipotle and Maple Leaf Foods Show Differing Rates of Longer-Term Recovery
Chipotle's Food Quality Issues 2015 to 2018
Chipotle Mexican Grill has faced significant food safety challenges from 2015 to 2018, leading to a series of high-profile outbreaks and public health concerns that led to criminal charges being filed by the Department of Justice. Chipotle agreed to pay a record-setting $25 million fine and to institute a comprehensive food safety program to resolve the criminal charges.
Key Issues:
- Chipotle experienced multiple outbreaks of foodborne illnesses, primarily linked to E. coli and norovirus. These outbreaks resulted in hundreds of illnesses and significant negative publicity.
- Two E. coli outbreaks in October and November 2015 sickened about 55 people in 11 states, but no deaths were reported. 22 people were hospitalized.
- In August 2015, a norovirus outbreak sickened about 80 customers and 18 employees at a Chipotle in Simi Valley, California. No deaths were reported.
- In December 2015, 141 people reported norovirus-like illnesses after visiting a Chipotle in Boston. No deaths were reported.
- In July 2018, about 647 people reported clostridium perfringens illness after eating at a Chipotle in Powell, Ohio. No deaths were reported.
- Issues with the supply chain, particularly regarding produce sourcing and distribution, were also identified as contributing factors to the outbreaks.
Immediate Actions and Consumer Communication:
To address these issues, Chipotle implemented several critical measures.
- The company invested heavily to enhance food safety protocols through food safety training, improved sanitation procedures and strengthened its supply chain.
- Increased audits and safety inspections were conducted to monitor compliance with food safety standards.
- Chipotle developed a comprehensive crisis management plan to respond effectively to future incidents.
- The company increased transparency and communication by sharing information about its food safety initiatives and responding promptly to customer concerns.
While Chipotle has made significant strides in improving its food safety practices, the company continues to prioritize food safety and quality to maintain consumer trust and prevent future outbreaks. Chipotle’s financial performance and stock valuations have recovered and are reaching all-time highs.
Maple Leaf Foods 2008 Listeriosis Outbreak
Maple Leaf Foods, a leading meat and poultry processor based in Canada, has faced scrutiny due to the potential for Listeria contamination in its products, which can lead to serious health consequences.
The 2008 Maple Leaf Foods listeriosis outbreak was a significant public health crisis in Canada. This outbreak, linked to contaminated cold cuts produced at a Maple Leaf Foods plant in Toronto, Ontario, resulted in a devastating toll:
- 57 confirmed cases
- 22 deaths
This tragic event led to significant reforms in Canada's food safety regulations and practices. It also spurred Maple Leaf Foods to invest heavily in food safety measures to prevent future outbreaks.
Immediate Actions and Consumer Communication:
- The company issued an immediate recall notice identifying the specific products and their distribution locations.
- Consumers were notified of the safety risk and advised to check their refrigerators and freezers for the recalled items and to return them for a refund.
- Maple Leaf Foods implemented enhanced testing protocols and sanitation practices across its production facilities.
The economic impact of the outbreak was substantial. Maple Leaf Foods faced significant financial losses due to product recalls, legal costs, and damage to its reputation. While the exact cost is difficult to quantify, it is estimated to be in the hundreds of millions of dollars. In the years since the incident, the company’s financial performance and stock price have posted only a modest recovery.
Prevention of Food Safety and Quality Incidents Requires Action
It is a given that no food manufacturer ever wants to have an issue with quality or safety, as this can have significant detrimental impacts on public health, brand image, sales, and profitability. Prevention should be the highest priority that a manufacturer aspires to. Achieving this will alleviate the need for extensive remediation and costly litigation. A strong focus on key actions can help food manufacturers to remain as healthy as they want their consumers to be.
Perform a comprehensive evaluation to determine specific preventive actions:
- Enhance Quality Control: Implement more robust quality assurance programs, including regular audits and testing.
- Enforce Plant Maintenance: Following strict preventive maintenance and cleaning schedules will alleviate unplanned downtime and contamination.
- Improve Supplier Collaboration: Work closely with suppliers to ensure comprehensive compliance with safety standards. This includes upstream testing and controls for ingredients vendors, packaging suppliers, and transportation partners (especially those with cold-chain implications).
- Increase Consumer Transparency: Improve labeling practices and provide clear information about food sourcing and safety measures. Transparency shows that manufacturers have nothing to hide and are doing everything they can to protect public health.
- Develop Crisis Management Plans: Develop comprehensive recall plans to respond swiftly to potential food safety issues. This includes the creation of communication playbooks with concrete action plans to proactively inform the public and stay ahead of critical developments.
Conclusion
Recent recalls and food safety incidents serve as a reminder of the ongoing challenges faced by the food industry in ensuring the safety and quality of their products. Continuing to focus on prevention by learning from these incidents and finding ways to improve food safety practices will allow manufacturers to better protect all of their stakeholders, most importantly those who consume the food they produce.
Sources:
- CDC, November 13, 2024: E. coli Outbreak Linked to Onions Served at McDonald’s
- FDA, October 18, 2024: TreeHouse Foods Announces Voluntary Recall of Certain Waffle Products Due to the Potential for Listeria monocytogenes Contamination
- CDC, November 21, 2024: Investigation Update: Listeria Outbreak, Meats Sliced at Delis (Boars Head)
- USDA, November 4, 2023: Tyson Foods Inc. Recalls Chicken Patty Product Due to Possible Foreign Matter Contamination
- US Department of Justice, April 21, 2020: Chipotle Mexican Grill Agrees to Pay $25 Million Fine to Resolve Charges Stemming from More Than 1,100 Cases of Foodborne Illness
- Canadian Medical Association Journal, September 1, 2009: Listeriosis Probe Identifies Multiple Deficiencies
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© Copyright 2024. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.