Shares of Surebeam, the US provider of electronic beam food safety systems, yesterday soared more than 30 per cent after the company won its latest grocery contract amid concern over meat safety following several US outbreaks of food-borne illnesses.
Surebeam, based in San Diego, California, said that it had secured a contract with the Price Chopper grocery chain in the Northeast, providing fresh meat treated with so-called "cold pasteurisation," a form of irradiation, for 102 groceries.
Shares in Surebeam, whose electron beam and X-ray technology destroys harmful food-borne bacteria such as listeria and E-coli, were up 60 cents, or 29.7 per cent, to $2.62 (€2.68) in late Nasdaq trading yesterday.
Analysts said news of the Price Chopper contract, which comes on the heels of a similar deal with Pathmark stores, is a hopeful sign that business is picking up for Surebeam, whose stock had been depressed after little progress in the first eight months of the year.
They estimate that ground beef treated with Surebeam technology is now available in nearly 600 stores nationwide, up from little more than 60 in August.
"We expect to see some substantive progress on those (new contracts) fronts in the coming months," said A.G. Edwards & Sons analyst Mark Jordan.
Also fuelling potential for the technology is heightened consumer awareness over food-borne illnesses, particularly in meats and poultry.
Earlier this week, US poultry giant Pilgrim's Pride recalled 27.4 million pounds of fresh and frozen ready-to-eat turkey and chicken under its Wampler brand. Federal health officials linked some of the product to an outbreak of listeria in the Northeast.
In September, agribusiness giant Cargill recalled about 400,000 pounds of beef after federal authorities linked it to an E. coli outbreak in the Midwest. And in July, ConAgra Foods recalled some 19 million pounds of ground beef due to E. coli contamination.
"Clearly the recall by Pilgrim's Pride highlights the fact that there is a meaningful food problem out there that irradiation can address,"Jordan said.