- CDC said not to eat shredded lettuce from Taco Bell restaurants in Indiana, Kentucky, Michigan, Ohio and West Virginia.
- Federal health officials have identified lettuce from Mexico served by Taco Bell locations across five US states as a source of the widespread outbreak.
- A Food and Drug Administration (FDA) investigation identified a single supplier of the lettuce.
- Taco Bell has committed to stop using any lettuce from the supplier identified by FDA’s traceback investigation.
- The outbreak has currently affected more than 1,600 people across five states, according to the Centers for Disease Control and Prevention.
- Taco Bell's parent company saw its stock sink nearly 7% over the past five days as the company grappled with the health scare.
- Analysts say the outbreak likely won't have a major effect on Yum Brands' stock, especially based on how restaurants have fared during past health scares.
- Cyclospora is a microscopic, spherical parasite that commonly causes watery diarrhea according to the US Centers for Disease Control and Prevention.
- The illness, called cyclosporiasis, is less common than foodborne illnesses caused by other germs, including salmonella and E. coli.
- Yum! Brands, parent company of Taco Bell and KFC, named food-borne pathogens including cyclospora as a prominent risk factor in its most recent filing.
- Nearly 7,000 people have likely been sickened by cyclospora, per CDC estimates, with cases spread across at least 34 states.
- Sweetgreen and Cava saw their shares rise more than 17% and about 2% on Friday, respectively, due to apparent relief that the CDC did not identify their ingredients as potential sources of cyclosporiasis.
The CDC and FDA have identified shredded iceberg lettuce from Taco Bell as the source of a cyclospora outbreak affecting over 1,600 people across Indiana, Kentucky, Michigan, Ohio, and West Virginia.481011
The outbreak has been linked to lettuce supplied by Taylor Farms, which has raised concerns about food safety across the fast-food industry.
According to the CDC, more than 30 states have reported infections this year, surpassing the previous record of about 4,700 cases set in 2019. The illness, known as cyclosporiasis, is caused by a microscopic parasite and can lead to severe gastrointestinal symptoms.9
Taco Bell has responded by voluntarily removing the affected lettuce from its supply chain and is working with the FDA to ensure no contaminated products remain on the market. The company stated, “The affected ingredient from our supplier is being indefinitely removed from our supply chain nationwide and will be replaced within 24 hours in select states.”
Despite the health scare, analysts believe the impact on Taco Bell's sales will be temporary. TD Cowen analyst Andrew Charles noted, “The historical playbook for food-safety scares... points to a one-to-two-quarter demand air-pocket and a stock that tends to recover within two quarters.”7
As the situation develops, the focus may shift from Taco Bell to Taylor Farms, the supplier implicated in the outbreak. “Our guess is that over the coming weeks this food safety issue fades from the headlines,” analysts at Evercore ISI wrote.
The CDC continues to investigate the outbreak, which has raised alarms about food safety practices in the restaurant industry, particularly regarding reliance on third-party suppliers.
“The CDC investigation identified lettuce supplier Taylor Farms as the source of contamination; the outbreak has sickened at least 1,600 people across five states. Taco Bell and other chains had previously warned investors about cyclosporiasis in SEC filings, naming it the No. 1 threat.”
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