Prepared foods are an increasingly important part of the grocery business, delivering fat margins at a time when sales of traditional packaged foods are lackluster. But the strategy also comes with serious risks as Whole Foods warned to address food safety.
In the clearest example yet, the Food and Drug Administration this month sent a stern warning letter to Whole Foods Market, a longtime champion of fresh and healthy foods, saying that the company had failed to address a long list of food safety issues at its food processing plant outside of Boston.
Among the problems cited: condensation dripping from the ceiling near food; an ammonium-based sanitizer used on a work surface near the preparation of a salad; and a failure to separate dirty dishes from ready-to-eat-salads.
The letter from the F.D.A. is just the latest headache to afflict Whole Foods. Over the last couple of years, the company has struggled with slower growth as competitors have gotten better at copying what it did to distinguish itself in the grocery market. Other wounds have been self-inflicted, like last year, when the New York City Department of Consumer Affairs called it out for mispricing some merchandise based on weight.
Prepared foods, which have almost double the profit margins of packaged foods sold on grocery shelves, have remained a bright spot at the company — at least for now. Such foods accounted for almost 20 percent of its sales in 2014, ringing up $2.7 billion in revenue.
Last fall, Whole Foods voluntarily recalled batches of Curry Chicken Salad and Classic Deli Pasta Salad after a sample prepared at the North Atlantic Kitchen tested positive for Listeria monocytogenes, a pathogenic strain of the bacterium. The plant is one of three preparation kitchens that help stock its stores in the Northeast, mid-Atlantic and South. (Most of the company’s foods are prepared at the stores themselves.)
In February, the inspectors spent five days at the plant and then shared their findings with Whole Foods, which responded within 15 business days. The company told the F.D.A. that it had retrained employees to address most of the issues the agency raised.
That response, however, failed to satisfy the F.D.A. “We do not consider your response acceptable because you failed to provide documentation for our review, which demonstrates that all your noted corrective actions have been effectively implemented,” the agency wrote in its June 8 warning letter.
More articles at: