Foodborne Outbreaks, Product Recalls, and Firm Learning

Firms in the food industry may experience more than one contamination incident over time. In the context of food safety, increasing the interval between foodborne outbreaks represents a key objective for both the food industry and public health officials. We demonstrate a systematic approach to analyzing repeated recalls, specifically to evaluate factors influencing the time until the next recall and, more importantly, to identify the extent of organizational learning from inter-event times. An analysis of meat and poultry recalls issued by publicly traded firms in the United States between 1994-2015 indicates that more diversified firms face a lower risk of repeat recalls as firm size expands, compared to firms primarily producing meat and poultry products. The hazard of a recall incident decreases with the severity of the previous recall. Some evidence of firm learning is found, but there is no definitive evidence indicating that a firm’s ability to prevent recalls improves with the number of foodborne outbreaks it has experienced.