The E. coli outbreak caused by contaminated romaine lettuce from Yuma, Arizona, killed 5 people and sickened over 200 others. The CDC stated on June 28th that the outbreak had run its course.
What are the financial effects on the supply chain?
Farmers shifted production out of Arizona into California. Retailers cleared their shelves of the tainted greens. Restaurants changed their menu or found new suppliers for different lettuce. Disruptions have occurred throughout the lettuce supply chain, from farmers to consumers.
This post is based on the Fortune.com post, The financial impact of the romaine lettuce E. coli outbreak isn’t over, by Sarah Gray, May 30, 2018; on the CNN.com article, Five deaths, 197 illnesses in ongoing E. coli outbreak tied to romaine lettuce, by Susan Scutti, June 1, 2018, and on the CDC post, Multistate Outbreak of E. coli O157:H7 Infections Linked to Romaine Lettuce (Final Update), (no author cited), June 28, 2018. Image source: Author’s Image/Glow Images.
1. How did the E. coli outbreak disrupt the lettuce supply chain?
Guidance: The disruption is found throughout the supply chain from farmers to retailers to restaurants to consumers. Consider discussing how supply chain disruption leads to alternative supply chain paths.
2. What are the sources and extent of supply chain costs caused by the E coli outbreak?
Guidance: Financial losses range from thousands to millions of dollars: restaurants changed their menus to avoid serving tainted greens; retailers restocked shelves with uncontaminated greens; farmers moved production from Arizona to California; health issues ranged from sickness to death for customers. Consider other costs, such as transportation, storage and disposal of recalled products.