A couple of years ago I heard a retailer food safety dude tell a group of farmers that his team keeps track of companies linked to illnesses and recalls. The buyer paid attention to how the incident was handled, especially watching for an expanding recall (indicating poor sanitation or traceability) and any public comments by the company. The collected info was used to evaluate whether they would buy from the supplier in the future.

Being linked to tragic illnesses usually results in more than just writing off product; fallout also often includes a loss of trust within the buying community and a poor reputation with consumers.

And that’s what I told Bill Shea of Crain’s Detroit Business  when he asked what might be ahead for Wolverine Packing Co.

The business fallout from Detroit-based Wolverine Packing Co.’s May 19 recall of 1.8 million pounds of ground beef that may be contaminated with potentially deadly E. coli bacteria won’t be known for some time. 

Investigations, both internal and by government officials, are underway. So is at least one lawsuit.

Wolverine, which had $1 billion in revenue last year, declined to discuss any business practices that may change, or how it may be affected financially, until it completes its own internal investigation.

“Since the voluntary recall was launched, the company still is conducting an internal investigation into the recall and assisting the U.S. Department of Agriculture’s Food Safety and Inspection Service as it continues to look into the matter,” said Chuck Sanger, Wolverine’s outside spokesman via Hartland, Wis.-based food industry public relations firm Charleston Orwig Inc.

Bad press and lawsuits trigger worry by suppliers, who may turn elsewhere.

“Trying to sell back to that industry that is purchasing can be an uphill battle,” said Ben Chapman, an assistant professor and food safety extension specialist at North Carolina State University. 

“The loss of that 1.8 million pounds is one thing. It’s difficult to put a monetary value on (goodwill); it’s more than just the product.”

Companies that have closed in the wake of a major recall couldn’t survive the combination of lawsuits and loss of trust, Chapman said.

In Wolverine’s case, he expects customers to have questions no matter what investigations show.

“If everything is up to what’s expected, the buyers may say, “What are you to doing to address what went wrong?’ ” he said. “It’s not a random act. Something happened. Either the system they have failed or the system they have wasn’t good enough.”