Grocer Works to Repair Its Image
Tuesday, August 12, 2008
Whole Foods said yesterday that it is inspecting all shipments of meat and tightening its guidelines for suppliers following last week's recall of two months' worth of ground beef that potentially was contaminated with E. coli.
The moves were part of the company's efforts to restore confidence in its products. The upscale grocer rose from a single store in Austin to a $6.6 billion company over the past three decades by betting on a singular corporate philosophy and business strategy: Shoppers are willing to pay more for natural and organic products. And with those high prices come high expectations.
"We're quite upset as well. This is not how we have our protocol set up with our producers," said Margaret Wittenberg, Whole Foods global vice president for quality standards. "We already have very tight standards."
Whole Foods recalled ground beef on Friday that was sold between June 2 and August 6 after seven people in Massachusetts and two in Pennsylvania who shopped at its stores were infected by E. coli. Wittenberg said employees at distribution centers are now checking labels on all meat shipments to insure that it comes from approved processors. It is also requiring processors to inspect each box of shipped meat for contaminants, a previously unwritten expectation, the company said.
The recalled meat was linked to Omaha meatpacker Nebraska Beef, which has recalled 6.5 million pounds of meat since July and has a long history of safety, health and labor violations. Whole Foods spokeswoman Libba Letton said one of its suppliers, Coleman Natural Beef, was seeking to work with Nebraska Beef following its sale to Meyer Natural Angus in June.
Whole Foods said it had received assurances that none of its meat had been processed by Nebraska Beef. One of Whole Foods' buyers had visited Nebraska Beef's facilities, but the processor had not been approved when the recall occurred last week. Meyer Natural Angus did not return phone calls yesterday.
"They're kind of a victim of their own success," Mark Kastel, co-founder of the Cornucopia Institute, which promotes sustainable and organic agriculture, said of Whole Foods.
"They have to deal with large-scale suppliers. The infrastructure of that supply mechanism has the same potential for contamination as conventional meat."
Whole Foods sets a high bar, positioning itself as more socially conscious than its competitors. It caps top executives' pay at 19 times the average worker pay while chief executive John Mackey gets just $1 a year. It has been a leader in retailers' green movement, recently tightening its policies on farmed seafood, for example. Its hormone-free meats, antibiotic-free seafood and pesticide-free produce attract throngs of affluent shoppers.
But those customers are often demanding. The company has been criticized for not stocking only organic produce and even for carrying sugar on its shelves. Mackey has famously defended the company as Whole Foods -- not holy foods.
"This is a big blow to their reputation, obviously," said Gene Grabowski, chair of the crisis and litigation practice at Levick Strategic Communications. "We tend to look at Whole Foods not only as more nutritious but also safer, and we're willing to pay a premium for that."
Whole Foods' Letton said the recalled beef was labeled as natural, which means it is free of artificial flavors and coloring but does not meet the more rigorous U.S. Department of Agriculture standards for organic. The company additionally prohibits meat suppliers from using growth hormones or antibiotics, among other requirements.