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Restoring Confidence in the Food Chain
A 22 percent drop in peanut butter sales, caused by an outbreak of salmonella, reveals just how exposed companies are to risks, and how quickly consumers can lose faith in the supply chain's ability to provide safe food products.
Feb 16, 2009—Last week, sales figures compiled by market research firm The Nielsen Co. indicated sales of jarred peanut butter for the four weeks that ended on Jan. 24 fell by 22 percent in the United States, compared with the same four weeks one year prior. The reason? Shoppers are concerned about the safety of such products, even though familiar brands, such as Jif and Skippy, have not been affected by the recent outbreak, which has sickened more than 550 people and may have caused eight deaths.
Federal investigators traced the outbreak to peanut butter manufactured at Peanut Corp. of America's southwest Georgia peanut processing plant. Most of that peanut butter is sold to food services companies that supply schools, hospitals and the like—it is not used in food sold off the shelf. But here's the thing: Many consumers don't care. They aren't taking chances, because there have been too many problems already, and too many reassurances that things were OK when they weren't.
Some members of the U.S. Congress are pushing for tighter regulation and track-and-trace requirements. Food producers are opposed to this idea, believing it will drive up food costs and hurt sales. Consumers want safer food, but that doesn't mean they necessarily want to pay for it.
One way forward would be to take a small portion of the stimulus money coming out of Washington to create joint government-private sector pilot projects, to determine how best to use such technologies as serialized bar codes, RFID and GPS to better track individual food shipments so they could be quickly traced and recalled if necessary. I'm sure companies would line up to participate in government-funded research projects, even if they had to kick in some money themselves.
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