Dynamics of Consumer Response to Food Contamination: The 2007 Peanut Butter Recall

We investigate the foodborne illness outbreak affecting a national brand of peanut butter to determine how demand for the product category was affected. The illness outbreak coincided with growth in the quantity demanded for the peanut butter category. The negative impact on the category associated with the initiation of the product recall was significant and dissipated over time. The recovery of the product category after the recall indicates that the information was correctly targeted and actions of the companies in the market overcame the initial food scare.