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Cost of Foodborne Outbreak

09/11/2018

In recent study economists at Johns Hopkins University determined that the cost of a single foodborne illness outbreak at a restaurant could range between $4,000 and $2.5 million.  The magnitude of loss is a function of the extent of infection, the pathogen involved, the vehicle of infection, the value of the brand and whether the chain concerned is publically quoted.

 

In addition to compensation, losses accrue from decontamination, disruption of the supply chain, interruption of business, loss of goodwill, the need to retrain employees, compensation to patients and legal fees.

 

It is obvious that the Johns Hopkins calculation does not take into account the effect of multiple foodborne outbreaks such as experienced by Chipotle Mexican Grill which loss approximately 50 percent of equity in over a year following salmonellosis, E. coli and norovirus infections.

 

The magnitude of losses is also a function of the response of a company to an outbreak including crisis control, and the use of social media.