“As it happened, everything was pulled from the shelves, and we lost not only the product right away but also sales over time,” he says. “We didn’t start selling spinach again until late October.”
For other produce growers, distributors, wholesalers and retailers, the spinach E. coli outbreak caused more than $100 million in lost sales. Industry wide, sales of packaged salads fell off about 30 percent immediately after the FDA’s warning, and have remained 15 percent to 20 percent below normal since.
Fresh Express, Salinas, CA, which supplies about 40 percent of all salads in the United States, was not implicated in the E. coli scare, but its sales have plummeted nonetheless. “We were guilty by association, says its president, Tanios Viviani.
“Many other companies also got caught in the wide net needlessly before the precise DNA fingerprint [of the E. coli strain] was identified,” says Kevin Hume, director of consulting services at supply chain consultants ESYNC, based in Toledo, OH.
But Surak and many others defend the FDA’s decision to issue the far-reaching warning against all spinach. “It’s a moral issue first, but also a due diligence issue,” he says. “It’s in their best interest to pull all product until they can trace its source exactly.”
“For the FDA, their first concern is to protect public health, and they had an obligation to issue a blanket warning,” adds Natural Selection’s Cabaluna. “It took time to determine what produce was at the root, and then from which company it came.
Track/Trace Interest Grows
Thanks to sophisticated supply chain solutions available today, many in the food industry are finding that tracking and tracing product through the supply chain, no matter how far-reaching, is not as difficult as it seems.
Using its HighJump ERP system, J&J Snack Foods, Pennsauken, NJ, a maker of pretzels, cakes, cookies, frozen drinks and novelty items, can locate anything in its supply chain in 10-15 minutes.
The company ships products across the country on hundreds of trucks every week. Every product in every one of those shipments is tracked with a unique lot number.
“Everything we produce is given a lot number based on the production date and time. HighJump automatically attaches that number to everything we do,” explains Tom Appleton, assistant manager at J&J’s Pennsauken warehouse facility.
During a recall, the system takes that same lot number and can give a complete report of what was shipped, how much was shipped, when it was shipped, where it was shipped and contact information there, the carriers involved, and where it is in the supply chain, he explains. “We can pull out every bit of information we need in about 10 to 15 minutes, and then pass it on to our Quality Control Department to address it with our customers.”
By implementing Ross Systems’ iRenaissance enterprise solution, including lot traceability, Berner Foods, Rock City, IL, a producer of cheeses and soy beverages, has cut the time needed to complete recalls to under an hour. It used to take almost an entire day.
“It’s a huge savings of time, and it provides some comfort level to know that we can respond quickly and reduce our pain in the process,” says Troy Grove, its director of business technology. “With full lot tracing, we can determine the disposition of any raw ingredient throughout production and distribution of all finished products and quickly contain the scope of a potential recall.
“Attribute tracking in iRenaissance allows us to monitor quality and product attributes uniquely for each batch or lot, and make sure we are delivering products that will meet the expectations of each customer,” Grove says.
That is what’s motivating Fresh Express, the packaged salad producer, to implement an RFID tracking solution from Boston-based TR3 Solutions.
“Fresh Express is excited about the opportunities that RFID presents to ensure that only the freshest product is on store shelves,” says Dan Wasser, vice president of business information and analysis at Fresh Express.