The Impact of Food Safety Incidents Across Brands: The Case of the Peter Pan Peanut Butter Recall

Abstract

The effect of negative publicity on consumer demand for brands is examined in the context of recall of a peanut butter brand as a result of pathogen contamination. The recall was associated with negative impacts for the implicated brand and positive effects on the leading competitor brand. Consumers responded to the foodborne illness outbreak within three weeks. The case demonstrates that consumer response is an incentive for companies to prevent safety lapses and that the problems of one brand do not necessarily harm rivals within the category.

The Safe Food Imperative: Accelerating Progress in Low- and Middle-Income Countries

“…Estimates of the effect of media reports on bacterial contamination of meat in the United States show a modest impact on consumer demand of 1-3 percent of total sales (Lusk and Schroeder 2002;Piggott and Marsh 2004). Similar modest effects were found for the widely publicized recall of peanut butter in the United States in 2007 (Bakhtavoryan, Capps, and Salin 2014). So, while consumer responses to food safety incidents can be dramatic in the short term, the impact on demand tends to taper off over time (Burton, Young, and Cromb 1999;Piggott and Marsh 2004).…”

Management of food incidents by Australian food regulators

“…Ideally, good management of food incidents will minimise unnecessary loss of consumer trust and unnecessary changes in dietary habits and nutritional status, which may have implications for public health. Similarly, good management of food incidents is important to avoid unnecessary economic effects previously reported as outcomes of food incidents . It is clear that fostering trust and the development of relationships between food regulators, using the strategies identified in this research, will facilitate effective management of food incidents.…”

“…Similarly, good management of food incidents is important to avoid unnecessary economic effects previously reported as outcomes of food incidents. 3,21 It is clear that fostering trust and the development of relationships between food regulators, using the strategies identified in this research, will facilitate effective management of food incidents. Providing clarity of the roles of food regulators, both within and between organisations, is also important to facilitate effective food incident management.…”

“…Food incidents have been demonstrated to have a number of impacts across multiple systems, often with economic consequences. For example, milk sales declined following contamination of fresh milk in Hawaii and a food recall of a specific brand of peanut butter had a negative impact on the demand for that specific brand . Food incidents are also a cause of morbidity and mortality, and may also affect consumer dietary intake.…”

“…For example, milk sales declined following contamination of fresh milk in Hawaii 2 and a food recall of a specific brand of peanut butter had a negative impact on the demand for that specific brand. 3 Food incidents are also a cause of morbidity and mortality, 4 and may also affect consumer dietary intake. For example, during 2010, it was estimated that 4.1 million cases of foodborne gastroenteritis occurred annually in Australia, with an estimated 31 920 hospitalisations and 86 deaths because of foodborne illness.…”