Hey Friends.
McDonald’s dominated the headlines last week with some unfortunate news as they were linked to a recent E.coli outbreak. The outbreak impacted several states, leading to recalls of certain products that may have been contaminated during the supply chain process. Other restaurants and grocers are under pressure to prioritize food safety measures and improve transparency, with this incident renewing calls for stricter industry standards and faster tracking of potentially contaminated items.
Health officials are still investigating the exact source, suspecting fresh produce such as lettuce or onions. This incident has led to precautionary closures and intensified safety inspections at affected locations. McDonald’s issued a public statement emphasizing its commitment to food safety and cooperation with health authorities, including bolstering supplier monitoring. The outbreak has reignited discussions around food safety standards in the fast-food industry, especially regarding the handling of fresh ingredients.
McDonald’s is set to resume sales of its Quarter Pounder burgers nationwide after recent tests in Colorado showed no traces of E. coli in the beef patties used in the sandwiches. This decision follows investigations by the Colorado Department of Agriculture, which analyzed patties from restaurants linked to the outbreak. Results indicated that the fresh beef patties were not the contamination source, although earlier suspicions had pointed to either the beef or slivered onions as the potential culprit.
As a precaution, McDonald’s restaurants that previously received onions from Taylor Farms' Colorado Springs facility will serve Quarter Pounders without slivered onions. This adjustment affects 900 restaurants across Colorado, Kansas, Wyoming, and other nearby states. Meanwhile, the FDA and CDC continue to investigate, focusing on onion samples and supply chain data.
The E. coli outbreak has resulted in 75 illnesses, 22 hospitalizations, and one death across 13 states, primarily in Colorado. In response, Taylor Farms has withdrawn yellow onions, and US Foods has issued a recall for four onion products.
The Food Safety Modernization Act (FSMA) is increasing its regulatory reach in food safety, aiming for stronger traceability and preventive controls to help minimize outbreaks like the recent E. coli cases linked to McDonald’s and other contaminated food events. Key among these new rules is the FSMA's Section 204, which focuses on rapid traceability throughout the supply chain, especially for foods prone to contamination like fresh-cut produce and dairy. Under these guidelines, businesses must track “Critical Tracking Events” (CTEs), such as receiving and shipping products, and record specific “Key Data Elements” (KDEs), including traceability lot codes and dates. This structure is designed to help the FDA and food companies swiftly trace sources of contamination in the event of an outbreak, potentially within 24 hours, a marked improvement over previous methods.
Starting in June 2025, compliance will become essential as major grocery chains like Kroger are requiring suppliers to use advanced traceability systems, which will involve scanning and tracking at the case level rather than relying on bulk data. This transition aligns with FSMA’s broader push for digital tracking and preventive controls across the food industry, affecting farms, food processing facilities, and retail establishments alike. Despite the operational challenges it presents, this move toward enhanced traceability is expected to reduce contamination risks and help maintain consumer confidence in food safety.
The FDA’s final rule under FSMA also provides exemptions for smaller operations and certain foods, though large-scale companies are expected to adhere fully to these standards as they aim to strengthen food supply safety from end to end. In combination with advanced technologies such as RFID and AI-driven data analytics, these new FSMA requirements are expected to make outbreaks less frequent and more easily contained, potentially reducing the economic and public health impacts of foodborne illnesses in the future.
For more details on these regulations, visit the FDA’s summary of FSMA traceability rules and compliance updates.
Can technology help?
RFID technology is a valuable tool in helping companies meet FSMA Section 204 traceability requirements by providing precise, real-time data on the location and movement of food items throughout the supply chain. Here’s how RFID aligns with FSMA 204 requirements:
Enhanced Traceability: RFID tags allow for continuous, automatic tracking of products through all stages—from farms to processing facilities and ultimately to retail locations. By embedding critical tracking events (CTEs) like receiving, processing, and shipping data, RFID supports accurate record-keeping. This aligns with FSMA’s requirement to track key data elements (KDEs), including product type, batch information, and lot codes, ensuring that companies can meet the FDA’s 24-hour traceability request in case of contamination.
Real-Time Monitoring and Response: RFID enables companies to detect and respond to anomalies in real time. For instance, if temperature-sensitive items experience fluctuations, RFID can alert staff to take immediate corrective action. These proactive measures reduce spoilage risks and help maintain food quality standards, both critical to FSMA compliance in preventive controls.
Efficiency in Recall Scenarios: During a foodborne illness outbreak, RFID can drastically reduce the time it takes to locate and remove contaminated items. RFID tags can store and transfer product-specific data, which helps pinpoint affected batches across the supply chain quickly, minimizing recall costs and public health risks.
Data Integration for Compliance: RFID systems can integrate with existing enterprise resource planning (ERP) or inventory management systems, making it easier to compile and submit records that meet FSMA standards. This also means that audits and inspections can be more efficient, as food companies can access a full traceability history at any time.
In sum, RFID technology enables more efficient compliance with FSMA Section 204 by providing the granular visibility and quick access to data that food companies need to ensure traceability, uphold safety standards, and rapidly respond in emergencies.
Rather timely, Kroger is enhancing its inventory management systems by expanding its use of RFID (radio frequency identification) technology. This update is expected to provide better tracking of products throughout the supply chain, leading to improved stock accuracy, reduced losses, and a more streamlined shopping experience. Avery Dennison has partnered with Kroger to introduce RFID technology for item-level digital identification, beginning in Kroger’s bakery section. By embedding RFID labels on individual items, Kroger aims to improve inventory accuracy, extend product freshness, reduce waste, and streamline employee tasks. The RFID technology allows for real-time inventory tracking, helping associates optimize shelf restocking and spend more time assisting customers.
Kroger’s Vice President of Retail Operations, Jordan Poff, highlighted that the initiative is designed to ensure product availability and enhance customer satisfaction. Avery Dennison's RFID solutions, including high-performance tags like AD Dogbone and AD Squarewave, support high-speed readings and end-to-end traceability. This partnership not only enhances supply chain transparency but also aligns with broader industry goals of improving food safety and consumer trust.
Fresh Thyme is expanding its use of Afresh’s AI-driven ordering and inventory management technology to its deli and prepared foods departments. This system uses AI to assess complex factors like shelf life, seasonality, and demand fluctuations, providing insights for precise ordering and reducing food waste. In prepared foods, the technology also helps employees manage shared ingredients and potential substitutions.
By the end of 2023, Fresh Thyme plans to implement Afresh's platforms across all core fresh departments in its 70 stores, aiming to enhance sustainability through waste reduction. Other grocers, including Albertsons, Cub Foods, and Heinen’s, are also using Afresh’s technology, with Albertsons piloting a separate Afresh forecasting solution for its distribution centers.
In other food related news…..Chick-fil-A Entertainment App Release: Chick-fil-A is launching a new entertainment app for its customers. The app will offer games, rewards, and interactive features, creating an engaging way for customers to interact with the brand and participate in promotions, which may drive more frequent visits and increase customer loyalty.
Whole Foods is launching a new, smaller store format aimed at urban and high-density areas. These stores are expected to offer a more curated selection of the chain’s popular organic products, focusing on convenience and local flavors, which could make Whole Foods more accessible in areas where large retail space is limited.
Amazon has launched a small-format grocery store within the One Chicago Building at 14 W. Superior St. in River North, where there is also a Whole Foods Market. This pilot store aims to attract more grocery customers by offering both Amazon's broader product selection and Whole Foods’ natural and organic products in one convenient location, allowing shoppers to save time and money. The new concept reflects Amazon's strategy to enhance in-store and online grocery shopping options.
7-Eleven is also trying out a new footprint and plans to open over 600 large-format stores in North America by 2027 under a new “New Standard” design, which features a broader product selection and expanded food and beverage offerings. The new stores, described as “more contemporary facilities,” are part of the company’s shift toward foodservice to bolster its financial position, especially in the U.S., where economic challenges have impacted its performance this year. CEO Joseph DePinto highlighted the new format’s potential to attract more customers and improve sales amid shifting market conditions.
Amazon’s top grocery executive, Tony Hoggett, is leaving the company after nearly three years, with his last day set for November 1. Hoggett did not provide a reason for his departure or indicate his next career move. His tenure at Amazon coincided with major developments in Amazon’s grocery operations, including the expansion of the Amazon Fresh store chain, the launch of a second-generation store design, and efforts to unify its grocery brands, such as Amazon.com, Whole Foods, and Amazon Fresh, into a seamless shopping experience.
Amazon has not announced a successor or whether it plans to replace Hoggett. Prior to joining Amazon, Hoggett spent most of his career with British retailer Tesco, where he held various executive roles, including CEO of Tesco Asia.
Amazon is discontinuing its "Amazon Today" service, which provided same-day delivery on a limited selection of items in certain cities. The decision reflects Amazon's recent trend of trimming underperforming services as part of cost-cutting measures amid a broader restructuring of its logistics network.
Amazon has introduced a gas discount for Prime members, partnering with select fuel stations to offer a few cents off per gallon. This perk adds another incentive to attract and retain Prime subscribers, especially during a time when fuel prices are fluctuating. It also expands Amazon’s membership offerings beyond shopping and streaming.
Marks & Spencer is implementing self-checkout stations within fitting rooms across its UK clothing stores. This move aims to streamline the shopping experience by allowing customers to scan and pay for items directly after trying them on, eliminating the need to queue again at the main checkout. The initiative, which should reach over 100 stores by 2028, reflects the brand's push for convenience and efficiency. However, some customers have raised concerns about accessibility and the reduction in staff interactions, as self-checkout technology becomes more widespread in retail.
Wayfair has introduced a paid loyalty program designed to deepen customer engagement and create a more predictable revenue stream. Members will receive exclusive access to discounts, faster shipping options, and other perks, positioning Wayfair to compete with similar offerings from other online retailers.
Capri Holdings saw a sharp drop in its stock price following news that the FTC paused its acquisition by Tapestry, the parent company of Coach and Kate Spade. This halt reflects the FTC's current scrutiny of major retail mergers and could complicate future luxury industry consolidation plans.
Lululemon’s recent partnership with the NHL and Fanatics aims to bring a high-end, fan-oriented apparel collection for hockey enthusiasts. Set to launch on October 29, this collaboration will feature premium pieces like the Scuba Hoodie and Align Pant, branded with select NHL team logos, marking Lululemon's entry into the hockey fan apparel market. Initially, 11 teams will be represented, including the Toronto Maple Leafs, New York Rangers, and Boston Bruins. For the 2025-26 season, Lululemon plans to expand the range to cover all 32 NHL teams. The collection will be available on Fanatics' digital platform, Lids stores, the flagship NHL Store in New York City, and various NHL arenas.
The campaign features NHL stars, such as Chicago Blackhawks’ rookie Connor Bedard, who is also a Lululemon brand ambassador. By collaborating with Fanatics—a leader in sports merchandise—Lululemon aims to bring comfort, style, and team pride to both male and female fans through a “New Feel of Gameday” collection.
In addition to this collaboration, Lululemon has forged other notable partnerships, including as the official outfitter for Team Canada for the 2022 and 2024 Olympics, and partnerships with professional athletes across various sports, showcasing its commitment to expanding its athletic and lifestyle brand presence. These collaborations align with Lululemon's strategy to strengthen its position within the sports apparel market and connect with diverse sports audiences.
Lululemon's financial performance in FY2024 shows strong growth in revenue and profit through the first two quarters. In Q1, revenue increased by 14% to $2.42 billion, with net income rising 24% to $407.7 million. Q2 saw continued momentum, with a 7% revenue growth to $2.37 billion and a 15% rise in net income to $392.9 million. Both quarters reported improved operating margins, highlighting efficient management. For FY2024, Lululemon projects annual revenue between $10.7 billion and $10.8 billion, driven by its "Power of Three ×2" growth strategy, which includes expanding men’s products and international sales.
Lululemon has pursued high-profile partnerships to enhance its presence in sports, wellness, and lifestyle. Key collaborations include:
Team Canada Olympic Partnership: Official outfitter for Team Canada in the 2022 Winter and 2024 Summer Olympics, providing apparel for ceremonies, training, and casual wear, elevating its global athletic image.
Mirror Home Workout: Acquired Mirror in 2020, allowing customers to access interactive, at-home workouts, aligning with demand for home fitness tech.
Athlete Collaborations: Partnerships with athletes in various sports, including NHL rookie Connor Bedard, promoting Lululemon's performance-focused lines.
Boston Marathon Sponsorship: Official outfitter, supplying branded gear and strengthening its presence in the running community.
These partnerships underscore Lululemon's expansion from yoga into diverse athletic markets, combining technology, high-performance sportswear, and brand collaborations to reach wider audiences.