These risks are bananas: Dole CRO tackles shipwrecks, listeria

From managing the risks of Dole’s self-owned cargo fleet to preventing another US$25m listeria outbreak, Jeff Stolle goes the distance to get your bananas to market – ripe and unbruised

These risks are bananas: Dole CRO tackles shipwrecks, listeria

Risk Management News

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When a cruise ship sinks off the coast of Italy, Jeff Stolle gets to work calibrating his risk management strategies to make sure that an unfortunate end to some vacationers’ well-deserved holiday half a world away doesn’t prevent Dole’s bananas from reaching your local market in tip-top shape.

Connecting the dots between seemingly disparate risk events is part of what makes Stolle’s seven-year tenure as director of risk management at Dole Food Company exciting. “A lot of people think bananas just show up at your grocery store,” he says, “but I learned early on that there’s a big process that goes into getting those bananas to the consumer in a timely fashion.”

The global fruit and vegetable company owns its own fleet of cargo ships, which is a huge competitive advantage, but it also adds a whole extra dimension to Stolle’s management of risk. The exposures faced in those journeys are tenfold, ranging from cargo and marine haul dangers to protection and indemnity risk to temperature maintenance (Dole must make sure that the bananas maintain a comfortable temperature from the time they’re picked until the time they’re delivered to the end user). Therefore, he needs to be attuned to any event that could affect the marine insurance market like sinking cruise ships. “It brings a lot of unique risks to the program from the marine insurance side,” he says.

The bananas and pineapples most associated with the brand are sourced in Latin America and undergo a long ocean journey to North America and Europe. “We have ships going into the east and west coast of the US and then also Antwerp,” he says. “From there, they get distributed throughout Europe.”

The exposures faced by owning ships create a unique set of threats for Stolle to manage. “[It’s] a completely different insurance market than anything else you’re dealing with,” he says. That’s why when cruise ships go down, Stolle is at the ready because the shipping insurance market changes rapidly.

Stolle’s risk management team uses Marsh as their marine and cargo provider. Despite large shipping disasters occurring over the last five years, Stolle hasn’t seen a huge increase in the cost of available coverage because capacity has remained sufficient.

With so much that could go wrong in a food-related business, Stolle prioritises extensive mitigation measures. That’s particularly true for Dole’s vegetable division, where a very public 2017 listeria outbreak in its leafy greens resulted in a US$25m loss and extensive litigation for the company.

Dole gets its hands dirty – literally – to safeguard its products and prevent another outbreak. “There’s a lot of science involved in [our mitigation strategy] and we’re constantly sampling and testing the product from the time that it’s in the field to the time it’s picked and bagged,” says Stolle. “It’s a constant testing and swabbing of product to make sure that it’s always coming up clean.” Insurance is there, too, but only to help recover from a disaster that Stolle hopes his strategy will prevent from coming to – wait for it – fruition.

 

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