Leggo Some Eggo: Beneath the Shortage

In November of 2009, the major news outlets carried the story of a pending food shortage in the US.  The story also spread across Facebook and Twitter. The product shortage would last until the summer of 2010.  The food in short supply, Kellogg frozen waffles—Eggos.  Not a major crisis for consumers but it is a problem for Kellogg.  Shortage means less sale of the product.  Moreover, the shortage is a result of business discontinuity.  Kellogg manufactures Eggos in four locations in the US.  The largest bakery was offline while major equipment changes were in being made.  That was a planned stoppage.  The cause of the shortage was the unexpected shutdown of the bakery in Atlanta, GA.  When heavy rains flooded Atlanta, the Kellogg facility was a flood casualty.  Flood waters are not clean so the facility needed to be thoroughly scrubbed before it could reopen.  Here is how Kellogg explained the situation on their web site:

“Question:

I have not been able to find Eggo® waffles in the store. When will they be available again?

Answer:

Kellogg Company recently experienced supply constraints caused by flood damage at our bakery in Atlanta.  In addition, we’ve been making significant equipment enhancements and repairs in our largest waffle bakery.  Unfortunately, this is taking longer than anticipated. 

The Eggo™ team is working around the clock to bring everyone’s favorite waffles back to store shelves as quickly as possible.  We hope to regain full distribution of Eggo products by the middle of 2010. This is a top priority for Kellogg Company.
 

 

Click here to receive periodic updates from the Eggo® brand about your favorite products, including news about when they will be back on shelf, or for more information, call 866-971-3320.  Thank you for your patience during this time, and we apologize for any inconvenience.”

http://www2.kelloggs.com/general.aspx?id=3006&terms=eggo

Most of the news reports repeated Kellogg’s story.  Flood coupled with an equipment change created the shortage.  For a sample story see http://www.usatoday.com/money/industries/food/2009-11-18-eggo-shortage_N.htm?csp=34

But there was more to the Atlanta facility closure and business interruption than the flood story revealed.  The Atlanta facility has been closed prior to flood for extensive cleaning.  According to the Georgia Department of Agriculture (GDA), the facility was closed due to Listeria monocytogenes being found in some samples of Eggos.  Listeria is a rather harmless bacteria but can be dangerous for people with weak immune systems, newborns, and pregnant women.  It is estimated that 4,500 cases of Eggos were recalled in early September.  The facility was then closed for cleaning and was about to restart when the floods hit.  The news stories and Kellogg information did not address the Listeria shutdown, all the blame rested on the flood.  http://www.wsbtv.com/news/21661515/detail.html

The Listeria recall was not a secret.  The recall was voluntary and reported in September.  It was an FDA Class II recall meaning the probably of serious illness was remote.  There were no illnesses reported from the tainted Eggos either.  The GDA oversaw the cleaning process.  The exact products recalled were:

Kellogg’s Eggo Cinnamon Toast waffles, 10-count package, UPC code 3800040440 with “Best If Used Before” dates beginning with: NOV22 10 EA, NOV23 10 EA and NOV24 10 EA.

Kellogg’s Eggo Toaster Swirlz Cinnamon Roll Minis eight-count package, UPC code 3800023370 with a “Best If Used Before” date beginning with NOV15 10 EA. http://www.webmd.com/food-recipes/food-poisoning/news/20090902/eggo-recall

Questions to Consider

  1.  Was it ethical for Kellogg to avoid the discussion of Listeria when explaining the Eggo shortage?
  2. Why would Kellogg want to avoid mentioning the Listeria in the shortage coverage?
  3. What is the advantage to Kellogg discussing the Listeria issue given that a few media outlets and online commentators made the connection?
  4. What does this case illustrate about the power of the Internet and the news media to reveal information companies wish to avoid—why it is hard to “hide” information these days?
  5. How could Kellogg use the shortage to benefit the Eggo brand, especially its online presence?
  6. How would you rate Kellogg’s handling of the initial Listeria problem and what justifies your rating?
  7. How is this case related to risk communication?
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