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The Impact of Food Safety Incidents Across Brands: The Case of the Peter Pan Peanut Butter Recall

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  • Bakhtavoryan, Rafael
  • Capps, Oral
  • Salin, Victoria

Abstract

The effect of negative publicity on consumer demand for brands is examined in the context of recall of a peanut butter brand as a result of pathogen contamination. The recall was associated with negative impacts for the implicated brand and positive effects on the leading competitor brand. Consumers responded to the foodborne illness outbreak within three weeks. The case demonstrates that consumer response is an incentive for companies to prevent safety lapses and that the problems of one brand do not necessarily harm rivals within the category.

Suggested Citation

  • Bakhtavoryan, Rafael & Capps, Oral & Salin, Victoria, 2014. "The Impact of Food Safety Incidents Across Brands: The Case of the Peter Pan Peanut Butter Recall," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(4), pages 559-573, November.
    • Handle: RePEc:cup:jagaec:v:46:y:2014:i:04:p:559-573_02
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    References listed on IDEAS

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    Cited by:

    1. Chantal Toledo & Sofia Berto Villas-Boas, 2019. "Safe or Not? Consumer Responses to Recalls with Traceability," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 519-541, September.
    2. Zhou, Pei & Liu, Yizao, 2023. "Recall information heterogeneity and perceived health risk: The impact of food recall on fresh meat market in the U.S," Food Policy, Elsevier, vol. 114(C).
    3. Shigeru Matsumoto & Viet‐Ngu Hoang, 2020. "Economic Loss Due to Reputation Damage: A New Model and Its Application to Fukushima Peaches," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(2), pages 581-600, June.
    4. Olagunju, Kehinde Oluseyi & Feng, Siyi & Patton, Myles, 2021. "Dynamic relationships among phosphate rock, fertilisers and agricultural commodity markets: Evidence from a vector error correction model and Directed Acyclic Graphs," Resources Policy, Elsevier, vol. 74(C).
    5. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2014. "Dynamics of Consumer Response to Food Contamination: The 2007 Peanut Butter Recall," Journal of Food Distribution Research, Food Distribution Research Society, vol. 45(2), pages 1-16, July.
    6. Kayode Ajewole & Elliott Dennis & Ted C. Schroeder & Jason Bergtold, 2021. "Relative valuation of food and non‐food risks with a comparison to actuarial values: A best–worst approach," Agricultural Economics, International Association of Agricultural Economists, vol. 52(6), pages 927-943, November.
    7. Zarebanadkoki, Samane & Zheng, Yuqing & Woods, Timothy & Buck, Steven, 2016. "Examining the Effect of Food Recalls on Demand: The Case of Ground Beef in the U.S," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236112, Agricultural and Applied Economics Association.
    8. Page, Elina Tselepidakis, 2018. "Trends in Food Recalls: 2004-13," Economic Information Bulletin 276244, United States Department of Agriculture, Economic Research Service.
    9. Bakhtavoryan, Rafael & Capps, Oral, Jr. & Salin, Victoria, 2016. "Times Series Analysis of the Peanut Butter Demand in Light of the Food Safety Issue," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235621, Agricultural and Applied Economics Association.

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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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