Retailers Rid Record Recalls

Whenever Peter Pan peanut butter returns to store shelves, Kim Eskew will likely pick up a jar.
How much he’ll order for his customers at Harps isn’t as certain.
Eskew, executive vice president of the Springdale-based grocer, said he had a nearly empty jar of the recalled peanut butter at his home, but hadn’t suffered the same effects as more than 400 people nationwide who became ill after salmonella poisoning was traced to a ConAgra Foods Inc. plant in Sylvester, Ga.
“We’ll probably be reluctant to buy in large quantities until we see what is going to happen,” said Eskew of his store’s former top-selling peanut butter brand.
“It may rebound quickly. I like Peter Pan peanut butter. I will probably start buying it again. Maybe a lot of people will. I’d venture to say if you got sick, you’ll probably never buy Peter Pan again.”
Harps received full credit on the recalled items after collecting the affected products from its 52 stores and sending them to reclamation centers. Eskew said Harps hadn’t estimated the effect on its bottom line, but did say suppliers like Jif haven’t always been able to keep up with the additional demand and Harps has dealt with some out-of-stock issues.
ConAgra and Canada-based Menu Foods Inc. — the main source of a contaminated pet food recall which began March 16 and continues today — have lost more than $100 million combined. The spinach industry lost millions of dollars per day for a few weeks in September after an E. coli outbreak that killed three and sickened hundreds in 44 states was traced to growers in three California counties.
Managing a food recall is typically a matter of pulling one or two items specific to a certain flavor, size or production location. Or a food item may be safe but not properly labeled with ingredients like eggs or milk, which can cause sickness in people with food allergies.
What grocers in the $500 billion American market have been through since September has been an unprecedented string of widespread recalls that has caused a shortage of items on shelves and shaken confidence of consumers.
“This kind of left you wondering, ‘What is going to be recalled next?’” Eskew said.
Eskew said he received no reports of pets becoming ill from food their owners purchased at Harps.
Wal-Mart Stores Inc. was not as fortunate with Menu Foods as one of its largest suppliers for its private label Ol’ Roy and Special Kitty brands.
At least two class action lawsuits filed in the recall’s aftermath name the Bentonville retailer along with Menu Foods as defendants in the deaths of cats that ate food containing wheat gluten imported from China and contaminated by melamine, an industrial chemical used in plastics and pesticides.
When the recall news broke, Wal-Mart stood on the side of caution and pulled every Menu Foods product regardless of whether it was included on the initial recall notice. From its corporate headquarters, Wal-Mart issued a cash register block on all Menu Foods products to keep them from being rung up if they somehow remained on the shelves.
The preemptive move turned out to be well-founded.
Since March 16, Menu Foods has expanded its list of recalled products at least five times and as recently as May 3 when it included items produced at facilities where the wheat gluten was used after evidence of cross contamination was discovered in foods that did not actually include the tainted ingredient.
To date, Menu Foods has recalled more than 60 million items and the list has grown to 5,854 products across several brands and lines.
“We were ahead of the game there,” said Wal-Mart spokesperson Karen Burk. “We felt that was the right thing to do to ensure customer confidence in our products.
“This was a very confusing issue. It was very difficult for the [Food and Drug Administration] to provide clarity early on. We wanted to go over and beyond for our customers.”

Regaining Trust
Recovering customer confidence is the biggest challenge in the aftermath of a recall.
The retailer is often least responsible for how a product is manufactured, but is always on the front-line of dealing with the problem.
“We feel like one of the worst things that can happen is to sell someone some product and their pet gets sick and dies,” Eskew said. “Even though we had nothing to do with it, it would be a very bad thing. Food safety and ensuring everything we sell is safe is critically important.
“The consequences, even if we were without fault, could be severe. It’s a terrible thing if a pet dies, but a person multiplies it greatly. It’s always a concern. It’s always a fear. But at the same time, the incidence of illnesses caused by food are relatively infrequent.”
An average of 325,000 citizens are hospitalized from food-borne illnesses every year, or about 0.11 percent of the population.
The most infamous recall in American history is no doubt the Tylenol recall of 1982 when seven people died in the Chicago area after taking cyanide-laced capsules.
While that was a product tampering issue and not a quality control breakdown, the consequences for Tylenol, and its parent company Johnson & Johnson, were severe.
The public panic forced the company to recall 31 million bottles of pain reliever, offered replacement products and within two months had new product in tamper-proof packaging available.
The recall and marketing blitz cost the company $100 million but helped it move from a low of 7 percent of the market back to 30 percent within a year.
The Tylenol recall set off alarms across all industries and introduced a wave of tamper-proof packaging in many product lines.
“Before 1982, nobody ever recalled anything,” said Albert Tortorella, a managing director at Burson-Marsteller Inc., the New York public relations firm that advised Johnson & Johnson, in a 2002 article in the International Herald Tribune. “Companies often fiddle while Rome burns.”
With its position as the world’s largest retailer, Wal-Mart is doing anything but strumming along.
The company has the ability to affect changes in its suppliers even while the FDA has been conducting fewer inspections on domestic food and even fewer — at least until recently — on imported food ingredients like the wheat gluten or rice protein concentrate tainted by melamine in China.
Burk said Wal-Mart requested and received written assurances from its other pet food suppliers that their products were free of the contaminated ingredients before restocking their shelves.
Since then, Wal-Mart has worked with its suppliers to develop action plans for quality control and is even conducting third-party audits of some suppliers to ensure food safety, Burk said.