Food Suppliers Must Meet Strict Standards To Remain Healthy

Originally published in the Journal for Corporate Renewal

By Steven Agran, MorrisAnderson and Keith Dehaan, Food & Livestock Planning Inc.

In December 2003, mad cow disease was identified in the North American market, and the Japanese government immediately banned imports of U.S. beef for two years. The 2014-15 avian ﬂu epidemic resulted in 17 percent of U.S. poultry either dying from the disease or being euthanized to halt its spread. Chipotle’s E. coli outbreak in 2015 sickened 58 people and resulted in a 42 percent drop in the company’s stock price in three months.

Foodborne diseases have sickened and killed people through the ages and have more recently resulted in extensive government regulation in the United States and throughout the world. Whenever an outbreak of foodborne illness occurs, the U.S. food industry is scrutinized anew, and over the years strict laws have been enacted to ensure the safety of the country’s food supply. Those who are unaware of food safety requirements when they take over a food-related company are setting themselves and the company up for failure and potentially endangering lives.

But even when food safety is always at the forefront of everything turnaround professionals do when working with a food company, some things are out of their control and can make a distressed situation even more challenging.

Certiﬁcation of Industry Standards

When a maraschino cherry company engaged a chief restructuring officer (CRO) after the tragic death of the business’s owner, numerous discussions were held on the importance of food safety and making sure that the quality control officer had the requisite authority to ensure compliance with Safe Quality Food (SQF) Institute guidelines. The CRO was concerned, given the change in ownership, about how the customer base would perceive the company.

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