Blue Bell Back on Shelves, Can it Win Back Consumer Trust?

After a 4-month hiatus due to a Listeria outbreak that resulted in 10 people being hospitalized and three deaths in Kansas, Blue Bell Creameries began stocking grocery freezers with ice cream. This week Blue Bell announced it began making its ice cream available at stores in the Houston, Austin and Brenham, Texas, as well as parts of Alabama. The company expects to expand distribution to 15 states in the near future, but can the company recover financially and gain back consumer trust?

The ice cream maker first initiated a limited recall in March, the same month it was divulged that local, state and federal officials were collaborating to investigate an outbreak of listeriosis. On April 20, Blue Bell voluntarily recalled all its products, including ice cream, frozen yogurt, sherbet and frozen snacks, because it was possible the food was contaminated with Listeria monocytogenes. The company also closed production plants in Brenham, Texas, Broken Arrow, Oklahoma and Sylacauga, Alabama, resulting in thousands of layoffs.

Unfortunately, FDA documents released in May identified the presence of Listeria at Blue Bell’s Oklahoma plant as early as March 2013. FDA referenced five samples of Listeria subspecies in 2013, 10 samples in 2014 and two samples in the early part of this year. The bacteria was found in such places as the floor in front of a freezer, a catwalk behind a flavor tank and water hose in front of a pint filler. FDA said it was unaware of the Listeria findings before conducting its own inspection this year.

On July 8, the company notified state and federal health officials that it planned to begin testing ice cream production at a facility in Sylacauga, Alabama, after Among other measures, the plants are making repairs, cleaning and sanitizing equipment, and eliminating potential contamination pathways.

A statement posted on its website reads in part: “Blue Bell is committed to producing safe, high-quality, great-tasting ice cream for you and your family to enjoy, and to maintaining high standards for production processes and cleanliness. We have upgraded our procedures and employee training and have adopted the same overall philosophy at all of our facilities."

And while hungry consumers are snatching up their favorite flavors of Blue Bell ice cream right now, the bigger question of whether the outbreak, as well as the company’s response to the crisis, will affect public trust in its product and leadership. The fact that Blue Bell knew of Listeria contamination in its plant back in 2013 but failed to contact federal authorities is a major hurdle to overcome.

According to American International Group (AIG), on average, 30 class I and II product recalls occur every week in the food and beverage industry in the United States, and another 22 equivalent recalls are reported in Europe, according to the company’s analysis of data from USDA and the European Union Rapid Alert System for Food and Feed (RASFF). Expenses resulting from product contamination requiring a recall can include replacement and destruction costs and lost profit from plant shutdowns, government intervention and brand damage.

The number of food recalls in the United States has nearly doubled since 2002, driven mainly by regulatory changes and an increasingly globalized food supply chain. What’s more, 52 percent of all food recalls cost the affected U.S. companies more than $10 million each with losses up to more than $100 million in direct costs. According to USDA, the public cost of foodborne illness was $15.6 billion in 2013, and a significant portion of that cost was due to recalled foods. Approximately 8.9 million people fell ill from the 15 pathogens tracked, with more than 50,000 hospitalized and 2,377 fatalities.

The bottom line is food manufacturers operate in a vast, globalized supply chain, where one mislabeled product or contaminated ingredient can cause sickness, death, multimillion-dollar losses and massive reputational damage for the affected companies.

Only time will tell if Blue Bell can recover fully.