Voluntarily recalling fresh-cut melon products from Caito Foods cost owner SpartanNash $2.9 million this summer.
The company pulled items from the supply chain after the Food and Drug Administration and the Centers for Disease Control and Prevention said epidemiological and traceback evidence showed that fresh-cut melon products from Caito Foods were the likely source of a salmonella outbreak that sickened 77 people, hospitalizing 36.
Costs of the recall included the disposal of product, decreased efficiencies, increased production and other costs, according to a news release.
SpartanNash, which acquired Caito Foods in 2017, referenced the recall in its comments on second-quarter financial results.
“The voluntary product recall at Caito negatively impacted both our sales growth and profitability in food distribution during the quarter,” CEO and president David Staples said in the release. “We continue to focus on being a best-in-class producer, working to ensure our suppliers are leaders in food safety and that consumers are provided the highest quality fresh products.
“It is worth noting that not one of the over 500 tests taken by the various parties showed positive evidence of salmonella,” Staples said. “I believe these results are a testament to our commitment to operating a high quality manufacturing process.”
Tests were done by third-party food safety professionals and the FDA, according to the release.
Staples projected growth ahead for the company in several areas but noted that the recall put some projects behind schedule.
“We also anticipate lower sales and profit growth than originally expected from our food processing operations,” Staples said in the release. “Despite strong interest in our offerings, the new business development timeline is taking longer than anticipated and production efficiency improvements are running behind plan, partially due to disruption caused by the voluntary product recall.”
SpartanNash reported that its net sales in the food distribution segment were up 4.3% to $941.7 million, mostly thanks to sales growth from new and existing customer programs, per the release. Sales for SpartanNash as a whole were $1.9 billion, up 2.1%.