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Total Recall

Total Recall

From peanut butter to bikes, product recalls are breaking records. Will your supply chain be ready when you have to run it backward in order to track, trace and collect a recalled product?

Reader ROI

  • How to limit a recall's cost and scope
  • What supply chain systems are needed for recall efficiency
  • Why the frequency of recalls is increasing

At lunchtime one day last January, Jill Hein, an Iowa mother of eight, took a jar of Peter Pan peanut butter out of her pantry. She opened the lid. Everything seemed fine. No funny odour. No odd colour.

Hein fed the Peter Pan to one son and one daughter. Within hours, they were cramping and vomiting. Hein's three-year-old boy, Bowen, had to be taken to the emergency room the next day. Hein ate some herself two weeks later and was hospitalized for dehydration. And renal failure.

Alone or with jelly, for US consumers peanut butter is as classic as Elvis, who preferred his on white bread, mashed with bananas and fried. Americans eat 700 million pounds of crunchy and creamy each year - enough, the Peanut Advisory Board says, to coat the floor of the Grand Canyon.

Hein never expected a simple peanut butter sandwich to go so wrong.

Neither did ConAgra Foods, the $US12 billion conglomerate that makes Peter Pan.

One of ConAgra's oldest and best-known brands, Peter Pan brought in $US109 million in sales in 2006, says Information Resources, which tracks retail spending. ConAgra also supplies some of Wal-Mart's Great Value house brand and sells peanut butter toppings to companies like Carvel and Sonic, bringing total peanut butter sales to $US147 million in 2006. But when an outbreak of a rare salmonella strain was traced to ConAgra peanut butter, the company would have to try to get it all back.

The Peter Pan recall eventually involved 148 million kilograms of its own and Wal-Mart's peanut butter, plus 99,953 cases of toppings. So far, ConAgra has spent more than $US78 million dealing with an estimated $US1 billion worth of potentially infected product. Its peanut butter sales were down 63 percent in fiscal 2007, the company says.

No one knows how much ConAgra will need to spend to re-establish trust in its product. Hiring Tinker Bell to ask people to clap if they believe in Peter Pan won't fix this.

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