Taco Bell, a restaurant chain owned by Yum! Brands NYSE:YUM, has temporarily removed unspecified ingredients from select locations as public health officials investigate a cyclospora outbreak that has sickened thousands of people across the United States. The company described the move as voluntary and precautionary, emphasizing that authorities have not confirmed any connection to Taco Bell, a particular ingredient, a supplier, or another business. Some Taco Bell franchisees in Michigan had previously stopped serving lettuce, while state health officials indicated that contaminated lettuce or salad greens may be connected to the outbreak. Michigan appears to be the center of the investigation, although the US Centers for Disease Control and Prevention said infections had been reported in more than 30 states during the previous two weeks.
The developing health concern placed pressure on restaurant stocks on Tuesday as investors assessed the possibility of ingredient disruptions and rising produce costs. Shares of Yum! Brands, the restaurant company that owns Taco Bell, fell 2.7% by 3:40 p.m. in New York, although the stock remained up about 4% for the year. Sweetgreen, a restaurant company with a salad-focused menu, declined as much as 13%, marking its largest intraday drop since February. Bloomberg Intelligence analyst Michael Halen said Sweetgreen could face a greater challenge if lettuce becomes unavailable or prices rise sharply because salads represent a substantial portion of its sales.
Smaller restaurant operators have also started removing fresh ingredients while officials continue searching for the source of the outbreak. The Buzz, a cafe in Monrovia, Maryland, removed certain menu items, while Aberrant Ales, a restaurant operator in Howell, Michigan, stopped serving lettuce. Green Table Restaurant, a Florida vegan restaurant chain, removed lettuce from all of its locations, and owner Niki Becker also advised against using raw scallions and fresh basil. Becker said she had not received a recall notice from suppliers but chose to act to protect customers, suggesting that uncertainty surrounding the outbreak may continue to influence restaurant operations and investor sentiment until authorities identify its origin.