Consolidated food supply may be worsening cyclospora outbreaks, experts say

The cyclospora outbreak that has sickened thousands in the U.S. is drawing renewed attention to a decades-long shift in how fresh food moves through the country.

While investigators work to identify the original source of contamination, some food safety experts say the industry's centralized sourcing and distribution networks after a wave of consolidation can help turn what once may have been an isolated contamination event into a multistate outbreak.

"The general trends that have taken place in the food industry, the way in which food has been sourced and then distributed has played some role here," said Dr. David Relman, a professor of microbiology and immunology at Stanford University.

The cyclospora parasite's long incubation period, the difficulty in tracking its path and what some experts have criticized as a bumpy federal response have all played a role in the widening outbreak. Some experts say the structure of the food system has also contributed.

"It's possible that as food sourcing and distribution becomes consolidated you get pooling and then redistribution of what might have been a very local contamination problem, so that it now becomes a widely distributed contamination problem," Relman said.

Marion Nestle, professor emerita of nutrition, food studies and public health at New York University, said the shrinking of the industry has amplified the consequences when contamination occurs.

"Consolidation means that if something goes wrong, it goes wrong big time," Nestle said.

Centralized processing can further expand the reach of an outbreak, she said.

The current FDA investigation around cyclosporiasis has focused on shredded iceberg lettuce distributed through Taylor Farms' foodservice business, an ingredient that reached Taco Bell restaurants and other foodservice customers across multiple states.

Relman referenced bagged lettuce as one example of how changes in distribution could spread a foodborne illness.

"Think of the difference between one head of lettuce and a bag of chopped lettuce that may have come from many, many heads," he said. "These bags are now being produced in huge numbers and distributed in far-flung distribution networks."

The industry's evolution toward fewer distributors has been driven in part by a push for efficiency. Nestle said those improvements for businesses come with trade-offs for food safety.

"Big is not necessarily better," she said. "The bigger the supplier, the greater the opportunity for contamination."

Over the past several decades, U.S. agriculture and food distribution have steadily consolidated as companies pursue greater efficiency and national scale, according to the USDA.

For example, Taylor Farms, the salad producer under scrutiny for the recent cyclospora outbreak, has seen significant expansion through a series of acquisitions over the past decade — including Earthbound Farm in 2019, Curation Foods in 2021 and most recently Equinox Growers in March.

Meanwhile, restaurant supply has become increasingly concentrated too, with broadline distributors like Sysco, US Foods and Performance Food Group serving hundreds of thousands of restaurants and institutional kitchens nationwide.

While federal regulators blocked Sysco's proposed $8.2 billion acquisition of US Foods in 2015 on antitrust grounds, both companies have continued growing through smaller acquisitions of regional distributors and fresh produce processors.

Sysco, the nation's largest foodservice distributor, has spent the past decade expanding its fresh produce business by acquiring regional distributors including Paragon Foods in Pennsylvania, The Coastal Companies in the mid-Atlantic and Greco and Sons, a specialty food distributor with 10 distribution centers across the country.

Those deals expanded Sysco's reach in fresh-cut produce and value-added processing, allowing a larger share of restaurants to source ingredients through the same distribution network.

In 2016, US Foods acquired Freshway Foods, a fresh fruit and vegetable processor, repacker and distributor in the eastern half of the United States.

Some experts on food distribution believe having a smaller number of companies in the industry compounds issues when they arise.

But not everyone agrees that consolidation is the enemy.

Timothy Lytton, a health and safety regulation expert at Georgia State University, said larger produce growers and processors often operate with more sophisticated food safety systems than smaller farms because they have the financial resources to invest in testing, traceability, audits and quality control.

"It's not entirely clear that larger operations have more food safety problems than smaller operations," said Lytton.

In California, he added, there have been studies at farmers markets that have found fresh produce grown by small farmers have had contamination with E. coli.

"While you may have a farmer who's very concerned about the quality of the product, you also have in an organic model a more holistic idea about farming that often involves animals near crops," Lytton said. "That combination of animals and crops can create food safety problems."

Even so, Lytton acknowledged that when contamination does occur within large handler networks, the resulting recalls at the distribution level are much broader and harder to manage.

CNBC has reached out to the group of major food suppliers about safety precautions and tracing procedures. Sysco pointed CNBC to the Foodservice Distribution Association.

"The foodservice supply chain that feeds our communities is intricate and foodservice distributors are highly skilled in tracking and tracing the food they distribute," said a spokesperson for the IFDA. "They maintain robust records, identifying the source, internal movement, and recipient of all products they handle, and they have a proven track record of providing FDA with critical traceback information within 24-48 hours to support foodborne illness outbreak investigations and swiftly remove products from commerce."

Relman stressed that while consolidation itself doesn't create contamination, it does change the consequences when contamination occurs.

"We often don't appreciate a system like the food inspection system, or the public health system in large until it fails," said Relman. "We can't keep doing that."