In 1993, Jack in the Box fast-food restaurant had an E-coli outbreak that spanned multiple states, harmed over 600 people, and killed at least 4 children (Murano, 2018). “In the year and a half following the outbreak, Jack in the Box lost approximately $160 million both in court and from lost sales” (Marler, The Marler Clark network 2021).
Jack in the Box lost millions of dollars by breaking consumer trust in its products. People stopped buying food at Jack in the Box and often boycotted or protested outside the restaurants, as well as outside federal offices (Murano, 2018). According to the Securities and Exchange Commission report (2021), sales went from $1,088,269 in October of 1993 down to $843,038 by October of 1994.
Jack in the Box adamantly denied any wrongdoing and blamed the outbreak on its suppliers. Documents found during litigation found that Jack in the Box was undercooking their hamburgers intentionally as it thought the burgers had a better texture at lower temperatures and had been warned by local health departments and by its employees that it should cease this practice (Marler Clark, 2021). After the outbreak, Jack in the Box changed many of its processes and began doing testing. “The company went from having no microbial testing at all to conducting a random test every 15 minutes” (Andrews, 2018). The company has not since had any other E.coli outbreaks thanks to these new testing procedures, laws, and regulations in the meat and restaurant industries (Andrews, 2018). Cleaning up its act has helped Jack in the Box recover its reputation.
Jack in the Box could have avoided much of these issues if it had listened to its employees and local health officials about cooking the burgers to the proper temperature. Unfortunately, Jack in the Box prioritized profits over people in this instance. Jack in the Box should have had mitigation techniques in place instead of waiting until a crisis appeared. Jack in the Box should have been performing quality checks and constantly improving its standards. Jack in the Box has been lucky that it regained consumer trust so quickly by implementing the techniques it should have already had.
Although it would not take responsibility for the outbreak, Jack in the Box did agree to alter its cooking and testing procedures. It also agreed to pay the hospital bills of anyone who had eaten at the restaurant resulting in E. Coli poisoning (U.S. Department of Defense, 2021). According to Jack in the Box (2021), “Our food quality and safety program has been recognized as one of the most comprehensive systems in the industry. In 2004, Jack in the Box received the Black Pearl Award from the International Association for Food Protection and the NSF International Food Safety Leadership Award for outstanding food-safety achievements.” It seems the company has recovered by changing its ways and maintaining a clean record since the 1993 incident, now boasting a net earning of 50.9 million dollars in the first quarter of the 2021 fiscal year (Jack in the Box, 2021).
Andrews, J. (2018, July 30). Jack in the box and the decline of E. coli. Retrieved April 03, 2021, from https://www.foodsafetynews.com/2013/02/jack-in-the-box-and-the-decline-of-e-coli/
Jack in the Box. (2021). Jack in the Box Inc. Reports first quarter Fy 2021 EARNINGS; Declares Quarterly cash dividend. Retrieved April 03, 2021, from https://investors.jackinthebox.com/news/news-details/2021/Jack-in-the-Box-Inc.-Reports-First-Quarter-FY-2021-Earnings-Declares-Quarterly-Cash-Dividend/default.aspx
Marler Clark. (2021, March 26). Jack in the Box E. coli Outbreak lawsuits – western States (1993). Retrieved April 03, 2021, from https://marlerclark.com/news_events/jack-in-the-box-e-coli-outbreak-western-states
Marler, Clark. (2021). The Marler Clark network. Retrieved April 03, 2021, from https://billmarler.com/key_case/jack-in-the-box-e-coli-outbreak#:~:text=Settlements%20for%20individual%20and%20class,court%20and%20from%20lost%20sales.
Murano, E., Cross, H., & Riggs, P. (2018, September 19). The outbreak that changed meat and poultry inspection systems worldwide. Retrieved April 03, 2021, from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6951920/
Securities and Exchange Commission. (2021). Annual Report on Jack in the Box. Retrieved 2021.
U.S. Department of Defense. (2021). Jack in the Box E. Coli Crisis. Retrieved April 03, 2021, from https://www.ou.edu/deptcomm/dodjcc/groups/02C2/Jack%20in%20the%20Box.htm
Photos from Outbreakmueseum.com, 2019 Oregon Health Authority