How Taylor Farms became integral to America's food supply system

The cyclospora outbreak that has sickened thousands of people across the U.S. has brought fresh scrutiny of the integral role Taylor Farms and other massive suppliers play in the country's food supply.

The company, which the Food and Drug Administration has linked to the parasite's spread, is one of the world's largest producers of fresh-cut vegetables and salads, supplying some of the biggest grocery chains and restaurant companies in the U.S. Its products are sold at retailers including Walmart, Kroger, Whole Foods and Target, and its restaurant customers include McDonald's, Taco Bell and Chipotle. Taylor Farms says 40% of salad kits sold at grocery stores come from the company, giving it a massive role in supplying a convenient and cheap vegetable option for many shoppers.

The company, founded in 1995, has grown through a combination of scale and acquisitions, building an operation that spans much of the food supply chain. Taylor Farms works with hundreds of family farms for its produce and handles processing, packaging and distribution itself.

That reach has made the company an increasingly important link between farms and some of America's biggest food companies, and heightens the risk of food safety problems spreading. Taylor Farms' scale has put the company under a brighter spotlight as the FDA investigates the cyclospora outbreak that the agency has linked to iceberg lettuce processed at Taylor Farms' facility in central Mexico, some of which was served at Taco Bell restaurants.

Taylor Farms declined CNBC's invitation for an interview but sent comments defending the steps it has taken to respond to the outbreak and keep its produce safe.

"We are confident in our food and food safety systems and will continue to be transparent as more information becomes available," a spokesperson for Taylor Fresh Foods, the corporate name for Taylor Farms, told CNBC.

Taylor Farms said in an August post on its website that it spends more than $200 million a year on food safety. The company added in a statement to CNBC that safety is its "biggest area of funding by several orders of magnitude."

Taylor Farms has also voluntarily suspended iceberg lettuce sourcing and production from central Mexico and commissioned independent experts to conduct a review of food safety practices at its facility there. The FDA has not reported a positive product sample for cyclospora, because it can take weeks for symptoms to show and lettuce has a short shelf life, so it is difficult to test the right crop.

The breadth of the outbreak, which has led Walmart to recall bagged salads and Taco Bell to pull lettuce at some restaurants, underscores how integral Taylor Farms has made itself to the U.S. food system, and why broader industry consolidation risks worsening foodborne illness outbreaks.

Taylor Farms generated roughly $7.3 billion in sales last year, according to PitchBook.

The company handles much of the processing and distribution of the produce it sources, including washing, chopping, packaging, labeling, shipping and refrigeration. Taylor Farms and other suppliers like it have succeeded in part by making themselves indispensable to big restaurants.

Chains rely on their ability to offer a consistent supply on a huge scale, said Stephen Zagor, a restaurant consultant and adjunct associate professor at Columbia Business School.