What the FDA's Taylor Farms Lettuce False Positive Means

The Food and Drug Administration's reversal of a key piece of its cyclosporiasis research has created confusion in the United States, but the agency said Monday that it has not changed its main conclusions about the outbreak.

The agency said Sunday that a test indicating that a sample of iceberg lettuce supplied by Taylor Farms of Mexico contained the cyclospora parasite was a false positive. However, that only applies to a specific shipment of lettuce supplied by the company, which the agency does not believe was the vehicle that sickened more than 1,600 people and potentially thousands more.

In a clarification Monday, the agency said its false positive does not change its previous conclusion that the outbreak is linked to shredded iceberg lettuce from central Mexico supplied by Taylor Farms, which was also served at some Taco Bell locations. The agency continues to advise Americans not to eat recalled iceberg lettuce.

“FDA's traceback investigation and outbreak data continue to converge on shredded iceberg lettuce from Taylor Farms locations in central Mexico,” it said in a statement. “The FDA will continue to work with federal and state partners to investigate this multi-state outbreak and ensure that the products implicated in this outbreak have been removed from the market.”

Researchers continue to examine what exactly caused the outbreak, which can cause stomach virus-like symptoms for days or even weeks. CNBC has reached out to the FDA for details on the next phase of the investigation, including whether there are additional ingredients or suppliers under scrutiny and whether the agency expects to issue further guidance. The agency has not yet responded.

False positive testing occurs when ongoing research creates uncertainty for both consumers and the food industry. While the FDA has said not to eat Taylor Farms iceberg lettuce, some diners have stayed away from salads entirely as case numbers rise.

“Unfortunately, this latest development may add more confusion to what has already been a complex situation for consumers,” said Frank Yiannas, former FDA deputy commissioner for food policy and response.

Although industry analysts do not expect the outbreak to have a long-term impact on Taco Bell or other restaurant chains, it could at least temporarily affect sales, based on foot traffic data, and cause a one- to two-quarter impact for companies linked to it. Foot traffic at Taco Bell was down about 19% on Friday compared to the weekday. average so far this year, according to data from the research firm Placer.ai.

In foodborne outbreak investigations, a false positive can occur when an initial detection signal is not reproduced during confirmatory testing. Some doctors have noted that cyclospora is particularly difficult to recreate in the laboratory.

But it hasn't led to a change in how public officials view the root of the outbreak.

The Michigan Department of Health and Human Services, where the outbreak has seen explosive growth, says it continues to recommend that people buy whole lettuces instead of pre-washed, bagged or pre-mixed salad kits.

The agency added that, based on interviews with more than 2,000 infected patients, many of them did not report eating lettuce in a restaurant, although they frequently said they ate green leaf lettuce somewhere.

Taylor Farms said Monday morning that it will continue its voluntary recall of the implicated iceberg lettuce from central Mexico, and Taco Bell has already begun removing the suspect lettuce from restaurants in the affected states.

The ripple effects go beyond those companies.

Walmart said Monday that it proactively removed four bagged salad kit products, which are under its Marketside brand and supplied by Taylor Farms, from stores in 27 states, even though it said there was no indication that its products were part of the outbreak.

“There have been no confirmed illnesses associated with these products at this time,” the company said in a statement. “We are working closely with our supplier and taking immediate action to remove the products from sale.”

Former FDA Commissioner Dr. Scott Gottlieb suggested to CNBC that the test result does not clear Taylor Farms of its link to the outbreak. Friday's recall was for a product that was imported several weeks ago and was separate from the lettuce that tested positive to the FDA, he said.

He also noted that because cyclospora has an incubation period of up to two weeks and lettuce has a short shelf life, it is important to test multiple shipments, even if they come from the same farm.

While the outbreak may have come from a single supplier for now, the contamination may have already spread more widely, according to Dr. Norman Beatty, associate professor of medicine at the University of Florida College of Medicine.

“We may find that this current outbreak may have led to additional outbreaks due to the nature of this parasite,” Beatty told CNBC. “The reason this is important for this current outbreak is because there are over 30 states where it has been isolated and there could be other smaller outbreaks in other regions.”

For restaurants, the uncertainty is proving as challenging as the outbreak itself. Salad-focused chains and other operators that rely heavily on fresh produce are left wondering whether any other ingredients remain a potential risk.

Taco Bell told CNBC in a statement Saturday that it had voluntarily removed all suspect lettuce from its locations within 72 hours of starting the process and had adjusted its supply chain accordingly. The company added that it is “confident” that consumers can eat safely at its locations.

“Clearly, this is a nationwide, industry-wide issue, not an issue specific to Taco Bell,” the company said. “We hope that other members of the industry are taking the same degree of immediate action and responsibility toward the consumer as we are.”

Taco Bell isn't the only restaurant seeing slow business, according to Placer.ai. Other restaurant chains that sell lettuce, including Chopt, Panera Bread and Chipotle, also saw traffic declines on Friday, the company said.

As headlines about the outbreak appeared last week, the industry's main advocacy group emphasized that it is taking food safety seriously.

“The Food Code requires every restaurant to have a certified food safety manager on every shift,” National Restaurant Association CEO Michelle Korsmo said in a LinkedIn post.

“We will continue to support public health officials as they investigate the outbreak and ensure our members have the information they need to evaluate their food safety decisions,” he added.

And despite the false positive result, the parent company of Taylor Farms and Taco Bell Yum brands are still dealing with the fallout from a reputational outbreak that led to product recalls and widespread headlines. Still, restaurant analysts previously told CNBC they did not expect any long-term financial impact for businesses linked to the outbreak.

Yum Brands shares are down nearly 9% over the past five days.