LETTUCE. According to Yum Brands Inc.’s earnings release dated May 1, 2007, its U.S. operating profit declined 11 percent in 2006 due primarily to the performance of its Taco Bell restaurants. They were negatively affected by an E. coli outbreak that was ultimately traced to tainted lettuce, and by publicity around a rodent infestation at a Taco Bell in New York City. In its first-quarter earnings report, Yum said same-store sales at all of its U.S. restaurants, including Taco Bell, KFC, Pizza Hut, and Long John Silver’s, fell 6 percent, with Taco Bell the chief culprit. Yum also said it is now requiring, among other things, that its suppliers test lettuce at the farm where it is grown. — R.M.
A Better Burger Industry
Seattle attorney William Marler earns his living suing food producers and restaurants suspected of selling contaminated food. In 1995, he won a $15.6 million settlement on behalf of Brianne Kiner, who suffered severe E. coli–related health problems after eating an undercooked hamburger from a Jack in the Box restaurant. Lately, though, he’s not earning much money on the back of the burger trade, and for that he credits the meat-packing industry for embracing end-product testing of its products for pathogens, partly in response to customer demand.
“From 1993 to 2002, 95 percent of my revenues came from cases involving E. coli tied to hamburger,” Marler says. “That has dried up to nearly zero since 2003. Once producers started testing and getting a lot of positives, they began looking at their procedures and processes to figure out how to eliminate the contamination. The fact that they were able to eliminate it to such a degree has put me out of the hamburger business, and I’m happy about that, candidly. I never thought I would say this, but I think the food industry across the board needs to take a really hard look at what the hamburger industry has done.”
Dexter Manning, national food and beverage practice leader for accounting and consulting firm Grant Thornton, says much of the industry is already moving in that direction. “The government continually comes out with new recommendations and rules for food safety, but nothing as stringent as what companies themselves are doing,” he says. “They’re doing audits and bringing in consultants. Nobody wants an E. coli scare, and nobody wants people to get Salmonella.” — R.M.
The Spice Trade
How McCormick Manages a Global Supply Chain
While most food company supply chains are still relatively short — the less distance perishable goods have to travel, the better — the supply chain for Sparks, Maryland-based McCormick & Co., the world’s largest spice company, spans the globe several times over. McCormick buyers trek to Uganda and Madagascar for vanilla, to China and Nigeria for ginger, to Yugoslavia and Albania for sage, and to India, Turkey, Pakistan, and Syria for cumin seed.