Tag Archives: ice cream

Faith-based food safety sucks

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In a decision issued [June 19, 2019] in Marchand v. Barnhill et al., No. 533, 2018 (Del. June 19, 2019), the Delaware Supreme Court reversed the dismissal of a stockholder derivative lawsuit against the members of the board of directors and two officers of Blue Bell Creameries USA, Inc.

The lawsuit arose out of a serious food contamination incident in 2015 that resulted in widespread product recalls and was linked to three deaths. The Delaware Supreme Court, applying the “duty to monitor” doctrine enunciated in In re Caremark International, Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996), and noting the very high hurdle to claims under it, nonetheless ruled that the plaintiff had adequately alleged the requisite bad faith by the members of the Blue Bell board.

Plaintiff did so by using information obtained in a Section 220 books and records demand to show facts supporting their contention that the Company did not have in place “a reasonable board-level system of monitoring and reporting” with respect to food safety, which the Court deemed to be “a compliance issue intrinsically critical to the company’s business.”

After concluding that “food safety was essential and mission critical” to Blue Bell’s business, the Supreme Court ruled that bad faith was adequately pled by alleging “that no board-level system of monitoring or reporting on food safety existed.” The Court thus declined to dismiss a claim that the directors breached their duty of loyalty, potentially exposing directors to non-exculpated (and potentially not indemnifiable) monetary damages.

In light of the Blue Bell decision, boards of directors should review carefully their board processes and procedures to ensure that “reasonable compliance system and protocols” are in place with respect to “safety and legal compliance” and other regulatory and business threats that may pose significant risks for their particular company.

Equally important, boards should document the procedures followed to identify significant risks, including advice from management, counsel and other advisors, as well as the processes and procedures implemented to provide for board reporting and appropriate supervision of these risks, and maintain written records of the implementation of these processes and procedures in practice. The principal basis upon which the Court in Blue Bell found the record to support the complete failure to impose any board-level “system of controls” with respect to food safety was the absence of any written board procedures or documented discussion on the topic, and the lack of any mention of food safety in board minutes in periods before the food contamination outbreak, despite previous food safety issues that allegedly had arisen in previous years, including positive tests for listeria in Company facilities beginning in 2013.

The Blue Bell decision makes clear that oversight with respect to these kinds of issues is a board-level responsibility, and goes beyond mere compliance with laws. The Delaware court opined that “the fact that Blue Bell nominally complied with FDA regulations does not imply that the board implemented a system to monitor food safety at the board level.”

“In short,” the Delaware Supreme Court ruled, “to satisfy their duty of loyalty, directors must make a good faith effort to implement an oversight system and then monitor it.” While “routine regulatory requirements, although important, are not typically directed at the board,” companies should ensure that they have written processes and procedures in place for the board to be timely informed about, and to monitor regularly, compliance, safety and business developments that are important to the company, or may be viewed as critical to the company in hindsight. [1]

This decision, while only on a motion to dismiss, illustrates the continued importance of the Caremar kdoctrine as a strand of Delaware law governing the conduct of directors. While the burden for withstanding a motion to dismiss a Caremark claim is high, and the theory remains “possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment,” [2] it can be met. Caremark is an important tool in the Delaware jurisprudential arsenal for enforcing what Delaware courts view as reasonable director conduct, and when applied sends a powerful message because of the potential it creates for personal director liability.

11.jul.19

Harvard Law School Forum on Corporate Governance and Financial Regulation

Brian Frawley, Joseph Frumkin and Krishna Veeraraghavan

https://corpgov.law.harvard.edu/2019/07/11/bad-faith-monitoring-on-food-safety-issues/

Machines are difficult to clean yet poop emoji soft-serve is all the rage in Tokyo

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It was our most popular blog post for years.

Baskin Robbins decided to offer free soft serve ice cream to expectant mothers on May 21, 2008, in California, Chicago, New York, Nashville, and El Paso, Texas. It was apparently the beginning of a national roll-out of soft serve ice cream at Baskin Robbins.

I have no idea why they targeted expectant moms, or why they recruited a pregnant D-list celebrity like Tori Spelling as spokesthingy.

Problem is, soft serve ice cream is on the Australian list of foods pregnant women should avoid. Sanitation with the equipment appears to be an on-going problem.

In 2015, a year after a giant recall of Snoqualmie ice cream tied to Listeria, a third illness was blamed on the bug after it apparently lingered in a machine used to make milkshakes for hospital patients.

Yet in Japan, Poop emoji soft-serve is here to haunt your dreams.

A cafe in Tokyo’s fashionable Harajuku neighborhood is hawking soft-serve that looks like the poop emoji, complete with googly eyes and a toilet-shaped bowl.

Yummy.

Be wary of thy service providers: Listeria in ice cream edition

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Last week a restaurant operator called me about their tomato sauce. It’s apparently amazing, not the typical tomato, basil, garlic combo (or so I was told). They wanted to know how to bottle and process it so they could sell it. I stepped them through the food safety concerns with canning, told them about how to apply for a variance to the food code. And told them about another option -copackers – service providers who will take a recipe and process something.

Picking the right one, who knows how to manage food safety, matters.

Altijira Murray Products, LLC got caught up in some service provider mess and has recalled about 4000 pints of Foxy brand ice cream.

All of the recalled products were manufactured and packaged in a facility owned by a contract manufacturer, Dr. Bob’s of Upland, LLC. ucm534040

The U.S. Food and Drug Administration (FDA) found samples positive for Listeria monocytogenes in the contract manufacturer’s facility and in finished product of another company’s brand, leading the contract manufacturer to recall all ice cream products.

About Altijira Murray Products LLC.

We make amazing ice cream that’s just a little healthier for you. Ice Cream is not supposed to be healthy. It’s a treat, a reward, something sweet at the end of the day. We’re members of 1% For The Planet and use local, smaller manufacturers where possible to stimulate jobs and look after the environment. Our Foxy’s brand is a super premium ice cream with 20% less sugar and probiotics snuck in at the last minute – but don’t panic, you’d never know the difference.

Altijira Murray Products LLC is an extremely small business – just two people. Please leave a message on the Recall line and someone will call you back as soon as possible.

Uh huh.

 

What is the infectious dose of Listeria? Who are susceptible?

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The relationship between the number of ingested Listeria monocytogenes cells in food and the likelihood of developing listeriosis is not well understood.

listeria4Data from an outbreak of listeriosis linked to milkshakes made from ice cream produced in 1 factory showed that contaminated products were distributed widely to the public without any reported cases, except for 4 cases of severe illness in persons who were highly susceptible. The ingestion of high doses of L. monocytogenes by these patients infected through milkshakes was unlikely if possible additional contamination associated with the preparation of the milkshake is ruled out.

This outbreak illustrated that the vast majority of the population did not become ill after ingesting a low level of L. monocytogenes but raises the question of listeriosis cases in highly susceptible persons after distribution of low-level contaminated products that did not support the growth of this pathogen.

Infectious dose of listeria monocytogenes on outbreak linked to ice cream, United States, 2015

Emerging Infectious Diseases, December 2016, Volume 22, Number 12, https://dx.doi.org/10.3201/eid2212.160165

http://wwwnc.cdc.gov/eid/article/22/12/16-0165_article

Texas health officials fine Blue Bell a little following Listeria outbreak

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Karen Robinson-Jacobs of Dallas News reports Blue Bell Creameries has been fined $850,000 by Texas health officials as a penalty for a Listeria outbreak, announced last year, that sickened 10 people and lead to a total shut down of company operations.

blue.bell.jul.15Three people died, but the company may only end up paying a fraction of that amount.

Under an enforcement agreement announced Friday between Brenham-based Blue Bell and the Texas Department of State Health Services, $175,000 must be paid within 30 days. The remaining $675,000 will be paid only if the company violates the terms of the agreement in an 18-month period, according to the state agreement.

Assuming all goes well with monitoring and testing, “upon successful completion of the eighteen-month term, the remaining balance of funds held in abeyance will be forgiven by” the state, the agreement said. 

Officials with Blue Bell could not be reached for comment.

Attorney Bill Marler, who specializes in representing victims of food-borne illness, said he thinks the fact that Blue Bell was hit with a fine is noteworthy.

“If it is $1 or $1 million, I think any fine for producing bad food sends a powerful message,” said Marler. “Any fine is very unusual. That is why any amount is significant. “

He said he has not heard whether any fines were levied by Oklahoma or Alabama, home to additional Blue Bell plants, but added “I would imagine they will.”

Under the agreement, makers of the iconic Texas brand will continue to test and monitor the ice cream following last year’s outbreak of Listeria monocytogenes linked to Blue Bell products made in Brenham.  

Research firm PrivCo estimated that, due to the recall, Blue Bell’s 2015 sales plummeted by nearly 60 percent to $288 million.

Recall reality: Make the best before dates bigger, I can’t see a damn thing

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I report on recalls every day, and usually don’t think much about it unless people are barfing.

blue.ribbob.recall.dp.16This morning, Unilever recalled 1.25 and two-litre Blue Ribbon ice cream tubs sold across Australia due to cases of plastic pieces causing injury risks.

I thought, maybe that’s what’s in the freezer?

Affected products have a best before date between April 28, 2017 and April 27, 2018 and shouldn’t be eaten, the company said in a statement on Wednesday night.

According to reports the plastic pieces found their way into the ice cream via machinery during the production process at Unilever’s Minto factory where Blue Ribbon products are made.

The recall is a “precautionary measure” and tubs with a best before date from April 28, 2018 are not affected, the statement said.

Products can be returned to the place of purchase for a full refund.

coles.blue.ribbon.ice.cream.recall.coles.16I got the ice cream out of the freezer.

I put on my reading glasses.

I couldn’t see a damn thing.

Amy had a look and finally found the date, and we eventually made it out to say, best before March 21, 2018 (right, exactly as shown).

So I wandered off to the local Coles supermarket, and they refunded my $4.90.

I wandered over to the ice cream isle, and the Blue Ribbon was gone (left, exactly as shown).

Well done.

Blue Bell says Listeria likely spread in Oklahoma plant drainage

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Blue Bell Creameries told federal inspectors that it believes Listeria spread at its Oklahoma plant through a drainage system, but the company said it couldn’t identify a single source of Listeria that contaminated equipment at its flagship facility in the Central Texas town of Brenham.

blue.bellThe Texas-based ice cream company revealed the findings in documents sent to the Food and Drug Administration, KXAS-TV in Dallas-Fort Worth reported Friday.

In its filing to the FDA, Blue Bell said cleaned equipment that came into contact with products made at its Broken Arrow, Oklahoma, plant was being stored in a small room with a floor drain. The company said an investigation revealed that particles at the plant may have carried listeria and washed into the building’s drainage system, gone through the room’s drain and settled on the clean equipment.

“We believe that this mechanism — particles emitted from a drain — was the most likely source of listeria,” Blue Bell wrote in the February filing.

The company said it no longer uses the room for equipment storage, and that the drain was removed and the floor replaced.

listeria4Blue Bell also told the FDA that it believes listeria likely entered its Brenham plant from “various potential sources” and settled on some pieces of equipment, but that investigators “could not identify a single common source of listeria in the facility.”

The company said it focused on cleaning affected pieces of equipment or removing it altogether, cleaning and sanitizing the plant and enhancing sanitation procedures and testing programs.

“We identified and implemented specific corrective actions to address the likely source, and adopted comprehensive facility-wide programs to enhance our overall ability to confront any possible sources of contamination,” Blue Bell spokesman Joe Robertson said Sunday.

Blue Bell: The rise and fall (and rise again?) of an ice cream empire

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Mark Collette of the Houston Chronicle writes that Paul Kruse’s father had warned him about the perils of family-run businesses, but he couldn’t escape his place as the obvious heir of a dawning ice cream empire.

blue.bell.jul.15After ascending to the corner office in 2004, Kruse delivered Blue Bell Creameries to its greatest height, becoming the No. 1 U.S. brand.

This year, it took barely two months to undo everything.

Ironically, Blue Bell’s food-poisoning crisis could give it a one-up on competitors, because it already has been forced to make expensive changes to equipment and safety protocols that other ice cream makers soon will have to emulate under new federal regulations. It took most of the year to upgrade while other brands gobbled up market share.

Under Paul Kruse, Blue Bell’s annual sales grew by 70 percent from 2006 to 2014, versus just 8 percent for the entire U.S. industry, according to figures from the market intelligence firm Euromonitor. It rose from fifth to third in U.S. market share. Relative to its own past, it abandoned any notion that slow was better, roughly doubling the geographical reach it had attained in the previous century. In 2014, for the first time, Blue Bell stole the No. 1 spot in brand sales from Dreyer’s, the longtime U.S. favorite.

Before the listeria crisis struck in March, it sold more than $333 million, according to Euromonitor figures updated in August. As a privately held company, Blue Bell doesn’t publicly disclose sales. But by that reckoning, it had, in one quarter, sold more than half of what it did in all of 2010 – and peak summer sales hadn’t even set in yet.

All that production came with a price. Brenham plant workers said sanitation was hurried. Hot water ran low. And federal records showed that problems reached to plants in Oklahoma and Alabama, negating the possibility that the listeria outbreak was a failure of one supplier, one machine or one employee. Somewhere amid all that growth, reality couldn’t keep up with the clean country image. Worse, it hadn’t been keeping up for years. Epidemiologists this year determined that illnesses from as early as 2010 were caused by Blue Bell – retroactive medical sleuthing made possible by the DNA database.

Had Blue Bell folded, it would have joined the majority of third-generation businesses, only a small percentage of which survive into the fourth, according to various consulting firms.

Unlike public companies, which send CEOs packing after six years on average, family bosses are entrenched, raising a host of challenges, said Andrew Hier, senior partner of the Cambridge Family Enterprise Group. They may have more difficulty coping with shifts in technology over time. Decision-making becomes more complicated in the so-called “cousin generation,” with more personalities at the table. Though privately held, Blue Bell now has hundreds of shareholders. Kruse’s cousin, Greg Bridges, is the vice president of operations.

After 10 illnesses and three deaths linked to Blue Bell, it now has been forced to modernize. It faces a task like Odwalla, the homegrown juice brand roiled by E.coli poisonings in 1996, and, more recently, Chipotle, the fast-food burrito chain plunged into crisis from at least four separate disease outbreaks in a span of months.

Odwalla had to abandon its raw-is-better philosophy and start pasteurizing its juices. Similarly, Chipotle is instituting pathogen testing standards unlike any others in fast food.

And lots more.

Soft-serve a bitch to clean: Listeria linked to ice cream sickens 3rd victim — a year later

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It was our most popular blog post for years.

bumpday_baskinrobbinsIn May, 2008, Baskin Robbins decided to offer free soft serve ice cream to expectant mothers on May 21, 2008, in California, Chicago, New York, Nashville, and El Paso, Texas. It’s apparently the beginning of a national roll-out of soft serve ice cream at Baskin Robbins.

I have no idea why they targeted expectant moms, or why they recruited a pregnant D- celebrity like Tori Spelling as spokesthingy.

Problem is, soft serve ice cream is on the Australian list of foods pregnant women should avoid. Sanitation with the equipment appears to be an on-going problem.

Today, JoNel Aleccia of The Seattle Times writes that a year after a giant recall of Snoqualmie ice cream tied to Listeria, a third illness has been blamed on the bug after it apparently lingered in a machine used to make milkshakes for hospital patients.

A woman in her 40s being treated at the University of Washington Medical Center was diagnosed in November with listeria. When experts did tests, to their surprise, they found the bacteria matched the genetic fingerprint of the germ that sickened two other UWMC patients in 2014.

The common factor? All three drank milkshakes made with ice cream from the same UWMC machine, said Dr. Jeff Duchin, health officer with Public Health — Seattle & King County.

“We’re assuming it’s linked to Snoqualmie ice cream from last year that persisted in the machine,” Duchin said. “The most likely explanation is it persisted in some nook or cranny somewhere where it escaped the cleaning process.”

The 2014 illnesses were traced to an ice-cream mix used by Snoqualmie Gourmet Ice Cream and sparked a voluntary recall of a year’s worth of ice cream, gelato and other products. The plant underwent extensive cleaning before reopening.

However, UWMC isn’t using Snoqualmie mix in their ice cream now. Instead, they use another commercial brand.

That means the listeria from the Snoqualmie mix likely remained inside the machine for more than a year, he said. UWMC cleaned and sanitized the equipment twice weekly, which is less often than recommended by manufacturers, health officials noted in a blog post.

Pregnant women, the elderly and others are urged to avoid foods such as lunchmeat and soft cheeses because of the risk of listeria. Soft-serve ice cream isn’t usually included on the list in the U.S., though officials in Australia and elsewhere warn pregnant women against consuming the treat.

The unusual outbreak at UWMC may underscore the need for more research into a link between listeria and the ice-cream machines, Duchin said.

In 2008, a reader asked if I would serve my then pregnant wife soft-serve ice cream.

No.

Jeni’s ice cream back after Listeria positives, changes

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Jeni’s Splendid Ice Creams LLC is reopening its production kitchen, but it no longer will be making its ice cream.

jenis-ice-creamThe Columbus-based ice cream maker’s facility at 909 Michigan Ave. will now be used to handle and prepare ingredients, but final production of its products will continue to be done by Orrville-based Smith Dairy, which has been making the company’s ice cream since the production kitchen closed for a second time back in June.

The company declined to answer questions about its new production process at this time.

(Note to self: building trust requires transparency).

Ingredients from farms will be processed in a kitchen separate from the production facility. Produce will not move into the production kitchen until it has been cleaned, peeled, shucked or hulled in that first kitchen.

The production kitchen will still prepare certain ingredients because it has the specialized equipment to do so.

Ingredients then will be transported to Smith Diary, which supplies Jeni’s with its grass-grazed milk and cream, and will be mixed with dairy and frozen into ice cream there.

Every batch will be tested for listeria and other bacteria before going to the public.

The company will continue to handle all of its own research and development and ingredient sourcing, as it was doing prior to the shutdowns.