Cyclospora outbreak shows risks of food supply consolidation

The cyclospora outbreak that has sickened thousands of people in the United States is drawing renewed attention to a decades-old change in the way fresh food moves across the country.

As investigators work to identify the original source of contamination, some Food safety experts say the industry's centralized supply and distribution networks after a wave of consolidation may help turn what once may have been an isolated contamination event into a multistate outbreak.

“The general trends that have taken place in the food industry, the way food was sourced and then distributed, have played some role here,” said Dr. David Relman, a professor of microbiology and immunology at Stanford University.

The long incubation period of the cyclospora parasite, the difficulty in tracking its trajectory and what some experts have criticized as a haphazard federal response have played a role in the widening of the outbreak. Some experts say the structure of the food system has also contributed.

“It is possible that as food supply and distribution consolidate, what could have been a very local contamination problem will accumulate and then be redistributed so that it now becomes a widely distributed contamination problem,” Relman said.

Marion Nestlé, professor emeritus of nutrition, food studies and public health at New York University, said the industry's shrinkage has amplified the consequences when contamination occurs.

“Consolidation means that if something goes wrong, it will go wrong big time,” Nestle said.

Centralized processing can further expand the scope of an outbreak, he said.

The current FDA investigation into cyclosporiasis has focused on shredded iceberg lettuce distributed through Taylor Farms' foodservice business, an ingredient that found its way into Taco Bell restaurants and other foodservice customers in several states.

Relman referenced bagged lettuce as an example of how changes in distribution could spread a foodborne illness.

“Think about the difference between a head of lettuce and a bag of chopped lettuce that can come from many, many heads,” he said. “These bags are now produced in large quantities and distributed in widespread distribution networks.”

The industry's evolution toward fewer distributors has been driven in part by a drive toward efficiency. Nestlé said those improvements for companies come with food safety trade-offs.

“Bigger is not necessarily better,” he said. “The larger the supplier, the greater the chances of contamination.”

According to the USDA, over the past several decades, U.S. agriculture and food distribution have steadily consolidated as companies seek greater efficiency and national scale.

For example, Taylor Farms, the salad maker under scrutiny for the recent cyclospora outbreak, has seen significant expansion through a series of acquisitions over the past decade, including Earthbound Farm in 2019, Curation Foods in 2021 and, most recently, Equinox Growers in March.

Meanwhile, restaurant offerings have also become increasingly concentrated, with powerful distributors such as sisco, American foods and Performance Food Group serving hundreds of thousands of restaurants and institutional kitchens nationwide.

While federal regulators blocked Sysco's proposed $8.2 billion acquisition of US Foods in 2015 on antitrust grounds, both companies have continued to grow through smaller acquisitions of regional distributors and fresh produce processors.

Sysco, the nation's largest foodservice distributor, has spent the past decade expanding its fresh produce business by acquiring regional distributors, including Paragon Foods in Pennsylvania, The Coastal Companies in the mid-Atlantic and Greco and Sons, a specialty foods distributor with 10 distribution centers nationwide.

Those deals expanded Sysco's reach into fresh-cut produce and value-added processing, allowing a greater proportion of restaurants to source ingredients through the same distribution network.

In 2016, US Foods acquired Freshway Foods, a processor, repackager and distributor of fresh fruits and vegetables in the eastern half of the United States.

Some food distribution experts believe that having a smaller number of companies in the industry exacerbates problems when they arise.

But not everyone agrees that consolidation is the enemy.

Timothy Lytton, a health and safety regulation expert at Georgia State University, said large producers and processors of agricultural products often operate with more sophisticated food safety systems than smaller farms because they have the financial resources to invest in testing, traceability, audits and quality control.

“It's not at all clear that larger operations have more food safety issues than smaller operations,” Lytton said.

In California, he added, there have been studies at farmers markets that have found that fresh produce grown by small farmers was contaminated with E. coli.

“While you may have a farmer who is very concerned about the quality of the product, in an organic model you also have a more holistic idea about farming that often involves animals near the crops,” Lytton said. “That combination of animals and crops can create food security problems.”

Still, Lytton acknowledged that when contamination occurs within large networks of handlers, the resulting recalls at the distribution level are much broader and more difficult to manage.

CNBC has reached out to the group of major food suppliers about safety precautions and tracing procedures. Sysco pointed out to CNBC the International Foodservice Distribution Association.

“The foodservice supply chain that feeds our communities is complex and foodservice distributors are highly trained to track and trace the food they distribute,” an IFDA spokesperson said. “They maintain robust records, identifying the source, internal movement, and recipient of all products they handle, and have a proven track record of providing the FDA with critical traceback information within 24 to 48 hours to support investigations of foodborne illness outbreaks and quickly removing products from commerce.”

Relman emphasized that while consolidation itself does not create contamination, it does change the consequences when contamination occurs.

“We often don't appreciate a system like the food inspection system, or the public health system in general, until it fails,” Relman said. “We can't keep doing that.”