Blue Bell: A Cautionary Tale for All Food Companies
News about Blue Bell Creameries’ guilty plea and $19 million in federal fines linked to a deadly 2015 listeria outbreak that led to a series of ice cream recalls serves as a cautionary tale for all food companies operating in today’s punishing media and regulatory environment.
Blue Bell, whose former CEO is also charged by the Justice Department with conspiracy to cover up safety problems at its plants, started with the best of intentions. But its failure to adequately respond to repeated FDA warnings over several years – along with its attempts to delay recalling contaminated products – is ultimately costing the company hundreds of millions of dollars in sales and legal fees, massive reputational damage and a possible prison sentence for former CEO Paul Kruse.
Federal prosecutors charge that Blue Bell, a family-run business based in Brenham, TX, distributed ice cream manufactured under unsanitary conditions and contaminated with listeria. Three deaths and 10 hospitalizations across four states were tied to the 2015 outbreak, according to the Centers for Disease Control and Prevention.
The Kruse family are known to be good people who built a venerable brand beloved by millions of consumers. Yet their missteps in crisis nearly destroyed their company and present food companies everywhere with several vitally important lessons:
- Limited Recalls Almost Never Work. When it first agreed to conduct a recall of some ice cream products, Blue Bell limited the action to a few product lines and a single section of its Brenham plant. Within days, it was forced to broaden the recall to the entire plant and add more products to the recall list. More than a week later, the company was forced to shut down operations at all its plants in Texas, Oklahoma and Alabama and recall all of its products. It was a classic “rolling recall” that confused consumers, annoyed retailers and angered regulators. Like Blue Bell, companies that try to artificially limit recalls usually cause greater harm to their brands than if they just shut down operation completely from the start and get to the root of the problem.
- Take FDA Inspection Reports Seriously. Until Blue Bell’s 2015 recalls, journalists and consumers had to file a Freedom of Information request to see the FDA’s Form 483 reports, which list conditions at food, drug and medical devices manufacturing facilities that federal inspectors believe may violate federal law. Journalists at the time requested Blue Bell’s Form 483 reports, some of which the company had addressed satisfactorily, and some of which it had not. The news media – including CNN and CBS News – had a field day with the information and widely publicized the revelations. Today, largely because of Blue Bell, the FDA publishes Form 483s on its website, often without informing companies in advance.
- Keep Meticulous Records. Among problems FDA had with Blue Bell was the fact that its records of independent inspection reports and cleanup efforts were incomplete and disorganized. Regulators today are immediately suspicious when records are either deficient or appear too good to be true. As Joe Levitt, a former FDA official and renowned food-safety attorney at Hogan Lovells once observed: “Accurate record-keeping has become the single most important element in working with the FDA.”
- Seek Advice and Service from Professionals. Mr. Kruse is a lawyer who was confident during the first few weeks of the 2015 listeria outbreak that he could manage the situation without outside legal counsel or recall experts. His company also lacked a recall plan. By the time he asked experts for help, it was too late. Food companies can no longer afford to take such risks. Recalls are a fact of life for food manufacturers and retailers alike, and all must have plans in place to manage the record-keeping, logistics, consumer inquiries and news media attention that accompany any food-safety incident. Call in the professionals now, while you have time to prepare – or suffer the consequences.