I thought I was getting over my shock and outrage regarding the recent salmonella contamination of peanut butter and peanut products stemming from The Peanut Corporation of America (PPA). But, an article last week in the New York Times, Food Problems Elude Private Inspectors, raised my awareness even more about flaws in food industry supply chains. This article exposes the fact that the contaminated PPA facility in Blakely Georgia had been inspected by a privately hired inspector in March of 2008, and according to this inspector, “the overall food safety level of this facility was considered to be: Superior..”.  .

This inspector, who was employed by the American Institute of Baking, had performed his inspection on behalf of Kellogg and other food companies, but his inspection services were reportedly paid for by PPA. The specified inspector had less than a day to inspect the entire plant, and as noted in this article, was not aware that salmonella bacteria could survive in plant such as PPA.  Another audit by a Michigan based firm found two dozen minor problems but scored the PPA plant 91 out of 100. 

The article further explains that while audits are not required by the U.S. government, food companies are increasingly requiring their suppliers to undergo such voluntary audits.  The rigor of these audits can contrast from cheap, to an FDA class audit. Also noted was these private auditors inspect only manufacturing plants, not the suppliers that feed ingredients to these facilities.

Last week, I applauded the food industry for publicly calling for increased funding of the U.S. FDA for broader inspection and transparency control.  It seems that these same food companies need to extend these controls to their private inspection processes as well.

Yes, every food related company should indeed insure that it was a comprehensive food safety plan in place. But in light of this latest revelation, that plan needs to include comprehensive audits from either private or government agencies.

 Bob Ferrari

I first alerted Supply Chain Matters readers to a new outbreak of human infections involving salmonella in a posting on January 8^th.  At the time, federal investigators had not been able to determine the specific source of the infections and I urged risk management professionals and product managers to be very diligent to the ongoing CDC investigation.

In an update posting of January 15^th, I alerted to the fact that the U.S. CDC and FDA agencies  had begun to link the infection to peanut butter, specifically production originating from a specific Peanut Corporation of America (PCA) manufacturing plant in Blakely, Georgia.  We sounded the alert that since the contamination was suspected to have involved institutional and bulk-packaged peanut butter products, that the concern for potential contamination would echo through various food production supply chains and indirectly impact consumers and brands. I also applauded The Kellogg Company for being the first to take proactive action to place a precautionary hold on the sale of a variety of its peanut butter cracker products.

In this post, I observe that the implications of this contamination have indeed been working their way through food production supply chains.  As of this morning, over 125 products have had to be recalled, and my unofficial count would indicate that at least 27 brands, both public and private, have also been impacted.  The products that have been recalled include peanut butter, crackers, cookies, candy, fruit and vegetable, snack food, and other products.  It also now includes certain pet-food products.  If you would like to search the complete list of products, here is the link to the listing on the FDA website.  The latest CDC update also indicates that the count of infected persons is now 486 within 43 states.  This qualifies for the term of nationwide outbreak.  Infections may have contributed to six deaths, according to the CDC. 

While the frequency of illness may be waning, the implications of this incident will continue to impact each of the companies involved. Almost all national and local media outlets are reporting the story of contaminated peanut butter. Both the CDC and the FDA now urge manufacturers to inform consumers about whether their products contain peanut butter or peanut paste acquired from PCA.  These agencies also urge institutions, food service establishments, as well as retailers to not serve or sell specific recalled products.  While these same agencies continue to clarify that the contamination does not involve retail-based peanut butter, consumers who have been constantly hearing of unsafe products are sure to be very wary of consuming any form of peanut butter products. 

Similar to the last year’s salmonella incident involving tomatoes and peppers, the dollar-impact to brands and brand equity are yet to be quantified. For the time being, supply chain risk management teams involving any of these recalled products will need to move from reactive to proactive means to deal with this incident.  Visibility to inventory throughout the supply chain, as well as alternative sources of supply will prove invaluable. While Kellogg was proactive in its response, these other impacted manufacturers are most likely in react mode, attempting to not only insure recalled products are accounted for, but also mitigated for any long-term impact.

Yet another reminder that a supply chain risk event that may initially seem small in scope, can echo itself through many impacted supply chains.

 Bob Ferrari

Just about a week ago, I alerted Supply Chain Matters readers to the ongoing investigation by the U.S. Center for Disease Control of a human outbreak of infection due to Salmonella serotype Typhimurium. At the time, 388 persons were identified as sickened, with ongoing investigations from multiple agencies to determine the cause. As of today, the number of reported sick has risen to 430, and five deaths have been reported across three states (Idaho, Minnesota, and Virginia).

It has not taken long to now identify the potential cause of this outbreak linked to peanut butter.  Virginia based Peanut Corporation of America (PCA), which distributes its peanut butter in bulk to institutions, private label food companies, and other food producers, issued a nationwide recall on January 13^th for 21 lots of peanut butter made since July 1 at its plant located in Blakely Georgia.  PCA utilizes the brand Parnell’s Pride in its institutional products, and is also sold by the King Nut Company under the name of King Nut, An open container of King Nut peanut butter in a Minnesota long-term care facility was found to contain the strain of salmonella.

While FDA and media reports continue to stress that none of the recalled peanut butter is sold to end consumers in retail stores, the implications of the potential contamination will echo through various food production supply chains, and indirectly impact consumers.  The first indicator is that The Kellogg Company announced a precautionary hold of the sale of a variety of its Austin and Keebler branded peanut butter cracker  sandwiches.  Consumers and retail stores are being asked to hold onto the Kellogg products, but not eat them, until the investigation is complete.

We need to applaud PCA and King Nut for their prompt and proactive actions in voluntarily recalling their institutional products.  I especially applaud Kellogg for taking bold action to not only protect consumers, but proactively respond to a supply chain risk situation.  Crisis what-if, and business continuity planning are important tenets of an effective supply chain risk management plan.  This ongoing situation is yet another opportunity to observe these plans in action.  Other consumer product companies utilizing peanut butter or paste should focus upstream and proactively act.  Consumers and customers should be your first priority.

Bob Ferrari