A Salmonella contamination incident cost candy producer Barry Callebaut $77 million, according to the company’s full-year results.
The impact of the problem was CHF 76.9 million Swiss Francs ($77.3 million) in the fiscal year 2021/22, which ended on Aug. 31, 2022.
The Salmonella incident at the Wieze factory in Belgium and temporary production stoppage, followed by a gradual ramp-up toward the end of the fiscal year, had a “notable impact” on volume and profit in Europe, the Middle East, and Africa region. There was a loss because operations were paused at the factory.
As of October, cleaning of the factory was nearing completion and it began operating again at normal capacity after production was stopped in late June.
Impact not over
The food manufacturers segment, particularly in Western Europe, was impacted by a significant volume drop in the fourth quarter because of the incident.
“Our Wieze factory runs again at normal capacity, though we will still experience an impact in the first quarter 2022/23 as we are catching up on delayed volume,” said Peter Boone, CEO of the Barry Callebaut Group.
Figures related to the incident are estimates of meeting contractual obligations as well as costs for transportation, storage, destruction, and disposal of contaminated products. It also includes charges for cleaning including dismantling, disinfecting, and reassembling all contaminated product lines.
In a letter to shareholders, Boone and Patrick De Maeseneire, chairman of the board, said the cleaning process was “meticulous.”
“The way in which our teams solved the Salmonella incident in Wieze combined the strength of each of our values. Many teams, globally, regionally, and locally, gathered to contribute to solving the issue. Within days we detected the root cause, a lecithin batch from a supplier, and prevented the affected chocolate from entering the retail chain. We also thank our customers for their loyalty and cooperation during this extraordinary time,” they said.
One batch of contaminated lecithin was unloaded at the Wieze factory on June 25. Barry Callebaut confirmed Salmonella Tennessee in the lecithin system of the factory and in samples of the raw material. The implicated batch came from a lecithin manufacturer in Hungary and was transported by a third party. The lecithin involved was only used at the Wieze site.
On June 27, Barry Callebaut detected a Salmonella positive on a production lot manufactured in Wieze, and lecithin was identified as the source of the contamination on June 29, with production stopped.
Lecithin is used in all chocolate production lines, so the company blocked all chocolate products manufactured from June 25 to 29, except for cocoa production which is not linked to the lecithin circuit. On July 1, Barry Callebaut officials confirmed that no affected products had entered the retail supply chain.
Sanitization of the affected solid chocolate line started on July 5 and July 14 for the liquid line in consultation with the Belgian Federal Agency for the Safety of the Food Chain (FASFC). On Aug. 8, the first cleaned and disinfected production lines were reopened, and over the next few weeks operations were gradually ramped up to normal capacity.
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