Political Economist

Recall Leads Whole Foods to a Change

Whole Foods Market said Monday it would tighten oversight of its suppliers to keep substandard products out of stores, after recalling ground beef that apparently sickened customers in two states.

Scrambling to contain the fallout from a recall that threatens the chain’s reputation for quality, Whole Foods acknowledged that it had failed to catch an important change made by one of its suppliers of ground beef, Coleman Natural Beef.

After coming under new ownership, Coleman Natural began using a slaughterhouse in Omaha that had received multiple citations and had fought a long-running battle with the Agriculture Department. The government has said the plant was the source of ground beef that has sickened scores of people around the country.

Most of the beef was sold at grocers other than Whole Foods and recalled this summer. An additional 1.2 million pounds were recalled on Friday by the processor after illnesses in several states were tentatively linked to ground beef sold at Whole Foods and other stores.

At least four regional grocery chains — Fred Meyer, King Soopers and City Market, all owned by the Kroger Company, and Dorothy Lane — have also recalled suspect beef packages in recent days.

Whole Foods acknowledged that a code stamped on beef packages arriving at its stores accurately reflected the change in processing plants. But the grocery chain said it had no procedures in place to watch the codes on arriving meat packages, and therefore failed to notice it was getting beef from a packing plant it had never approved.

Whole Foods will immediately institute new procedures to detect such a change in the future, the chain said. A spokeswoman, Libba Letton, said the company would also undertake a broad review of procedures for approving suppliers and scrutinizing the quality of products.

“It’s going to mean going back and examining these other things and making sure there aren’t holes, especially in terms of food safety,” Ms. Letton said.

In addition to auditing shipments more carefully, Whole Foods will also require E. coli testing of beef that goes beyond government requirements, she said.

The recall is the latest blow for a company already struggling with anemic sales growth because of the economic slowdown.

“The assumption is that for the extra money that you pay for most Whole Foods products, in return you’re getting something that’s safer, fresher and more nutritious,” said Gene Grabowski, head of the crisis and litigation practice at Levick Strategic Communications, who has handled several food-recall cases. “And this damages that perception a great deal.”

The beef in question, which has been linked to illnesses in several states, came from an Omaha company called Nebraska Beef. The same company had, earlier this summer, processed the 5.3 million pounds of beef linked to nearly 50 cases of infection with a disease-causing strain of the organism E. coli.

Whole Foods has long bought beef from Coleman Natural Foods, of Golden, Colo. That company announced in April it would sell its beef line to Meyer Natural Angus, of Loveland, Colo. After the sale, Coleman apparently started processing some of its beef at Nebraska Beef, of Omaha.

Ms. Letton said Coleman was obliged to get Whole Foods’ approval for the change, but did not do so. “We relied on our suppliers to follow the rules,” she said.

After buying the beef line, Meyer received rights to use the Coleman brand name for a year with existing customers, said Katie Coakley, a spokeswoman for Coleman Natural Foods. A Meyer Natural Angus spokesman, Del Holzer, confirmed that Meyer is using the Coleman name.

He declined to comment further and would not address questions about why Meyer began using the Nebraska plant. A representative for Nebraska Beef did not return calls on Monday requesting comment.

Ms. Letton said Whole Foods scrutinizes every supplier on how it raises, transports, slaughters and processes animals, and audits suppliers every year.

“They already have a lot more inspection than most retailers would have,” said Doc Hatfield, a rancher in Brothers, Ore., who is part of a cooperative that sells beef to Whole Foods.

Whole Foods recalled all fresh ground beef sold between June 2 and Aug. 6 at its stores in Connecticut, Rhode Island, Maine, Massachusetts, Florida, New Jersey, New York, Kentucky, Maryland, Ohio, Pennsylvania, Virginia, the District of Columbia, Alabama, Georgia, North Carolina, South Carolina, Tennessee, Illinois, Michigan, Minnesota, Missouri, Nebraska, and Wisconsin.

Food-safety advocates said that the recall was troubling.

“Part of this is, this is another example of a broken federal system that hasn’t put enough resources into stopping this problem,” said Jaydee Hanson, policy director at the Center for Food Safety in Washington.

As for Whole Foods, “they have positioned themselves as a company that takes food safety very seriously,” he said. “If they really didn’t know who was processing beef for them, they should have.”