Starbucks Recalls Highlight Challenges With Suppliers

By Cory Leahy

Reverse logistics process. That’s the technical term for a recall, and it’s something Starbucks experienced twice in the first week of March.

The first involved the presence of an undeclared allergen — cashews — in a snack box sold by Starbucks stores in Washington state. The next day, Starbucks removed breakfast sandwiches from 250 stores in Texas, Arkansas and Oklahoma because they had the possibility of being contaminated with Listeria monocytogenes.

Both recalls were initiated by the product manufacturers (Gretchen’s Shoebox Express and Progressive Gourmet, respectively) out of an abundance of caution, and no illnesses have been reported.

But in both cases, Starbucks was the more recognizable name in news stories, highlighting a challenge retailers face in managing safety practices at all points along the supply chain.

“As long as fresh food is sold in retail outlets, there’s always risk,” says Lamar Johnson, senior associate director of the Supply Chain Management Center of Excellence at The University of Texas at Austin McCombs School of Business.

In these cases, the suppliers identified problems and alerted Starbucks, which would have immediately notified its stores to remove the offending items from shelves.

“Today’s technology and communications methods make that possible,” Johnson says. He estimates that “within an hour of the notification, the product was off all shelves” and likely tossed, the quickest way to dispose of relatively small inventories of inedible products.

“In the old days, notification would have happened via telephone or maybe FedExed messages” and wouldn’t have been as immediate, Johnson says. “Consumers can feel good about the checks and balances in the system.”

But if a customer had bought a product and became ill, an investigation would have followed to determine the weak link in the supply chain, a process that can take weeks or even months. (See Chipotle’s recent adventures with e coli contamination.)

Perhaps it was lax standards at the manufacturer (e.g., failing to test for pathogens frequently enough) or missteps in the distribution process (e.g., a refrigerated truck breakdown). Or maybe the retailer itself was to blame (e.g., selling expired merchandise).

“Management of reverse logistics and reverse profitability along the way is a pretty big job,” Johnson says, noting the various points of liability and loss of business and reputation in the food supply chain.

Having intimate knowledge of your suppliers’ safety and quality protocols is a good business practice, but it’s not a legal requirement, Johnson says.

That said, these high-profile, low-impact recalls offer a reminder for other companies to examine their processes. In other words, Johnson adds, “It may be time to inspect my inspector.”