FBI investigates spinach grower

Rachel Dornhelm Oct 5, 2006

TEXT OF STORY

SCOTT JAGOW: There’s no evidence anyone tampered with the bagged spinach in this recent E. coli outbreak, but the FBI thinks some kind of crime may have been committed. Yesterday, federal agents raided two spinach plants near Salinas, California. One of the plants belongs to Natural Selection Foods. As Rachel Dornhelm reports, the company may not be fit enough to get through this.


RACHEL DORNHELM: Natural Selection Foods is one of the biggies in the greens business. Before it was implicated in the E. Coli epidemic, it packaged spinach sold under 34 brand names.

Food business strategist Aaron Johnson says the company faces some big financial obstacles.

AARON JOHNSON: They are more than likely going to lose any co-packing or co-processing arrangements that they had with any companies, and that’s going to be a hard one to come back from.

Johnson says Natural Selection Foods may not have brand recognition with shoppers, but the firm’s direct customers – like Dole, Emeril’s and Sysco — do. And they will self-police.

JOHNSON: They don’t want to invite risk when they don’t have to, they’re very good at managing risk.

The grocery chain Trader Joe’s is just one previous customer that’s already advertised a new spinach vendor.

Johnson says it’s very possible Natural Selection Foods won’t survive this crisis.

I’m Rachel Dornhelm for Marketplace.

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