5 replies to this topic

[Brendan Triplett]

Hey guys,

 

I know it has been awhile, hopefully I have a bit more time to get active again.  We are currently working through a very large recall from one of our vendors that had an outbreak of Listeria Monocytogenes.  I have found that often times this can be a company killer.  The loss of consumer confidence and the damage it can do to a reputation is almost irreversible and the solution to fix it within the company can be as serious as the total removal and replacement of equipment and/or sections of a building.  I know it sounds awful to write a company off for this but have any of you had experience with a company that went through and outbreak and a recall and survived?

 

Cheers,

 

Brendan

[The Food Scientist]

Well Kellogg, one of the biggest companies in the world went through a huge recall for one of their peanut vendors (one of the deadliest Salmonella outbreaks in US history caused by Peanut corporation of America). At the beginning US consumers were afraid to consume peanuts from anywhere it caused a decline in sales for peanut butter. What it was , was time. I guess with time you will be gaining the confidence from your customers again (possibly they'll just get over it and forget about it). But after that we had big changes to FSMA and our food safety regulations in the US. And it was a public announcement to ensure consumers we are doing the best we can to prevent any of it from happening. I know it is a lot of work and resources, its not easy but hang in there! All you need is the time!

[SQFconsultant]

Only the strong survive... I was with a company that had a major recall due to listeria. But they were very well insured, lawyer'd up with lots of capital reserves.  Smaller companies that lack the resources for potential rainy days (or months) get wasted out.

 

I also remember having an off-the-record chat with a lawyer that represented one of the biggest food companies in the US and he explained that a contingency plan was in place that included an interesting statement based on averages - they actually planned for the possible killing of up to 100 people and up to 100,000 for damages short and long term in the event a major recall - and actually as horrible as that sounds - that they plan for it I was in the hotel franchise business as a cross-country inspector and our risk division estimated that any hotel over 5 stories high will have at least 3 jumpers a year, thus we planned for people jumping off the balconies.  Unfortunately, without suicide planning in the hotel industry many hotels would go out of business from just one person jumping.

[eatmoreomega3s]

This example is a little different, but take a look at Chipotle.

 

Here's a recent article on the company - https://www.mediapos...ood-safety.html

 

“CMG has implemented a comprehensive system of protocols, including limiting [the] number of food suppliers, DNA testing of all food items before they get to the stores, shifting some of the food preparation to centralized kitchens, retraining the firm’s food handling staff and hiring a University of Kansas professor as Food Safety Czar,”

[majoy]

No experience with an actual recall but what I heard from the grapevine is that companies with very deep pockets will survive this. Say, Maple leaf foods here in Canada, 20+ people died in 2008 due to listeriosis, and they're still here. Nobody really talks about the people who died, but how the company managed the outbreak and how they responded, their PR and lawyers were really good and they probably pay so much money.

 

Unfortunately, those with limited resources often times, just chose to sell or not to continue the business as consumer confidence is very difficult to rebuild.

[Brendan Triplett]

It does seem like money and planning seem to be the only safeguards for companies that have one of these.  I am not confident that the vendor that we are working with will survive as we are still working through their recall.  Given another few years of profit they might have but if this occurs within the first years of becoming a mid-size company it is pretty much a death sentence, barring a really great insurance plan.