September 18, 2007
Menu Foods On Comeback Trail
This has not been a good year for Menu Foods as the company lost a reported 80 percent of its contract business after pet food it manufactured sickened and in a number of confirmed instances killed dogs and cats that ate product tainted with melamine.
Now the company is in the process of trying to get back on its feet despite the loss of $45 million tied to the recall and the potential to take more financial hits from lawsuits filed against the company in connection with the tainted pet food.
For its part, Menu Foods is in the processing of trying to find its way back from its catastrophe. The company sold one of its production facilities to help it raise funds to deal with its losses. It has also instituted a number of changes, including finding a new wheat gluten supplier (not from China), inspecting ingredients coming into its plants and making a pitch to retailers that its products are safe and ready for sale on store shelves.
One of the notable retailers that have begun selling Menu Foods again is Wegmans. According to WHEC-TV in Rochester, NY, Wegmans sent four of its employees to assess Menu Foods’ quality control procedures at its Pennsauken, NJ plant. The retailer also requires proof that Menu Foods has tested raw ingredients to accept shipment.
“Our most important responsibility to customers is food safety,” said Mary Ellen Burris, senior vice president for consumer affairs at Wegmans. “Living up to our responsibility is more complicated today than a generation ago, because foods now come from more places. We have to be systematic in reducing risk wherever we can. We do that by sharing with supplier partners what we know about best practices, by making our expectations and requirements clear, and by requiring testing — often by a third party — to verify safety.”
Despite the assurances that Menu Foods has taken the steps necessary to safeguard the pet food it makes, consumers still have the recall and reports of sick and dying animals top-of-mind.
According to a report on WSFA 12 News in Montgomery, Ala., consumers were concerned after finding original product codes on Special Kitty brand cat food were covered with new labels. There was worry that the product could be repackaged tainted food.
Menu Foods responded to WSFA with the pledge that all tainted product has been removed from shelves. A company spokesperson Randall Copeland said the new UPC labels were put over old ones to “delineate that this is a new product.”
Discussion Question: How much reluctance do you think consumers will have to buying product back on store shelves after being involved in the pet food recall? Will simple cents-off or similar promotions be enough to bring consumers back? What, if anything, will retailers and manufacturers have to do relative to discussing the safety of their pet food brands with consumers?
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Menu Foods has 4 things going for it: (1) some folks’ memories are short (2) their proliferation of brand names (3) they have very low wholesale prices (4) a reasonably long history. If they can hold out financially for the next year or so, they’ll probably pull through OK. But if they continue to make mistakes like pasting new labels over the old labels, their comeback will take more time.
The Menu pet food crisis revealed to the public four previously hidden or at least not well understood truths that were disturbing: 1.) Many, many ingredients for food products (and not just for animals) are coming from China; 2.) These products and ingredients are not nearly as carefully monitored, regulated or guaranteed safe as we thought they were; 3.) A single company, Menu, was procuring their own ingredients to make hundreds of similar products under contract for different brand names (and price points) and producing millions of units in the same plants on the same machines; and 4.) This type of cost-cutting mega production can put an entire category of product, and extraordinary numbers of lives in jeopardy if something goes terribly wrong.
It is doubtful that Menu can ever regain the trust it lost. My prediction is that Menu may survive in some smaller fashion as a producer of inexpensive private label pet food. But, they still have much litigation to contend with (both pet owners and breach of contract) which may put them “under” for good. And, large national brand companies such as Iams and others who were exposed and embarrassed by this debacle and suffered both serious image and financial loss are already bailing from Menu and setting up their own production facilities.
Those thousands of families who lost beloved pets and the thousands more who are still paying off veterinary bills and will be nursing their living but damaged pets for the rest of their shortened lives have not forgotten Menu foods’ role in this, nor will they. Adding to these numbers the millions of other pet owners who became “enlightened” during the publicity from the recalls suggests that Menu’s comeback trail will be rocky, indeed.
Many veterinary nutritionists will tell you that some of the ingredients commonly in pet food are just plain dubious, even if they’re “safe”. We’ve only scratched the surface of this topic with the recalls.
I think companies are missing an opportunity to place true premium pet foods without byproducts, mystery meats, preservatives, artificial colors and flavors, and additives like wheat gluten on supermarket shelves. Consumers are ready.
Put me in the short memory camp. I think as long as a product is on the shelf (especially in a retailer with huge consumer trust) people will forget the past and purchase it.
The outcome for Menu Foods is difficult to predict. Their success at coming back in the short term is predicated upon their ability to cash flow and win back their contracts. Their long term success presumably is dependent upon retail customers willingness to trust the brands that they contract manufactured.
The first step, winning back their contracts, is dependent upon the breadth of alternative sources there are. It there is an abundance of supply ready to fill this sudden demand, then I would bet that Menu Foods has a limited future. On the other hand, if the field of suppliers is limited, due to previous consolidations, then they may benefit from their customers inability to replace them.
The second step, should they survive the first, is to re-instill confidence in their product’s quality and safety, which in turn allows the retailers to proclaim the same to their customers. The question to be considered is whether the majority of the customers have long enough memories that it really matters. If all parties can communicate and market their corrective action plans then the bet is simply on whether there is significant long term damage.
Seems to me that most people, after the initial shock and shopping pattern disruption, after reassurances are likely to forgive and forget, at least as it applies to something like pet food products. Now, baby food and children’s toys? That is a whole other scenario…we will all have the opportunity to see how customers react in the long term to a premier brand like Mattel.
I have a loving dog pet and I know why.
He wages his tail, will occasionally cry.
He loves food that are safe and nutritious
But new labels and off-cent deals are suspicious.
And since his health and safety sustains me,
I trust not returned pet food to feed He.
Menu Foods–and any retailer that does business with them–must absolutely focus on quality control. If governments don’t mandate improved testing after this debacle, certainly the industry does.
Relying on short memory is a poor answer. Menu Foods must step forward and do everything in its power to buy product under the strictest standards, test, and brand its products with test that customer can trust.
Otherwise, Menu Foods might be in court room next to Michael Vick.
There is a large block of consumers that are ready for high quality pet food. They are flocking to stores like mine (an independent pet supply shop) looking for the perfect food. Buy American has never been stronger. My best selling brands are the ones where I can assure the pet owner that the pet food plant is US based, US owned, and US sourced ingredients. They are willing to pay higher prices if I can assure them of quality.
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Menu Foods has 4 things going for it: (1) some folks’ memories are short (2) their proliferation of brand names (3) they have very low wholesale prices (4) a reasonably long history. If they can hold out financially for the next year or so, they’ll probably pull through OK. But if they continue to make mistakes like pasting new labels over the old labels, their comeback will take more time.
The Menu pet food crisis revealed to the public four previously hidden or at least not well understood truths that were disturbing: 1.) Many, many ingredients for food products (and not just for animals) are coming from China; 2.) These products and ingredients are not nearly as carefully monitored, regulated or guaranteed safe as we thought they were; 3.) A single company, Menu, was procuring their own ingredients to make hundreds of similar products under contract for different brand names (and price points) and producing millions of units in the same plants on the same machines; and 4.) This type of cost-cutting mega production can put an entire category of product, and extraordinary numbers of lives in jeopardy if something goes terribly wrong.
It is doubtful that Menu can ever regain the trust it lost. My prediction is that Menu may survive in some smaller fashion as a producer of inexpensive private label pet food. But, they still have much litigation to contend with (both pet owners and breach of contract) which may put them “under” for good. And, large national brand companies such as Iams and others who were exposed and embarrassed by this debacle and suffered both serious image and financial loss are already bailing from Menu and setting up their own production facilities.
Those thousands of families who lost beloved pets and the thousands more who are still paying off veterinary bills and will be nursing their living but damaged pets for the rest of their shortened lives have not forgotten Menu foods’ role in this, nor will they. Adding to these numbers the millions of other pet owners who became “enlightened” during the publicity from the recalls suggests that Menu’s comeback trail will be rocky, indeed.
Many veterinary nutritionists will tell you that some of the ingredients commonly in pet food are just plain dubious, even if they’re “safe”. We’ve only scratched the surface of this topic with the recalls.
I think companies are missing an opportunity to place true premium pet foods without byproducts, mystery meats, preservatives, artificial colors and flavors, and additives like wheat gluten on supermarket shelves. Consumers are ready.
Put me in the short memory camp. I think as long as a product is on the shelf (especially in a retailer with huge consumer trust) people will forget the past and purchase it.
The outcome for Menu Foods is difficult to predict. Their success at coming back in the short term is predicated upon their ability to cash flow and win back their contracts. Their long term success presumably is dependent upon retail customers willingness to trust the brands that they contract manufactured.
The first step, winning back their contracts, is dependent upon the breadth of alternative sources there are. It there is an abundance of supply ready to fill this sudden demand, then I would bet that Menu Foods has a limited future. On the other hand, if the field of suppliers is limited, due to previous consolidations, then they may benefit from their customers inability to replace them.
The second step, should they survive the first, is to re-instill confidence in their product’s quality and safety, which in turn allows the retailers to proclaim the same to their customers. The question to be considered is whether the majority of the customers have long enough memories that it really matters. If all parties can communicate and market their corrective action plans then the bet is simply on whether there is significant long term damage.
Seems to me that most people, after the initial shock and shopping pattern disruption, after reassurances are likely to forgive and forget, at least as it applies to something like pet food products. Now, baby food and children’s toys? That is a whole other scenario…we will all have the opportunity to see how customers react in the long term to a premier brand like Mattel.
I have a loving dog pet and I know why.
He wages his tail, will occasionally cry.
He loves food that are safe and nutritious
But new labels and off-cent deals are suspicious.
And since his health and safety sustains me,
I trust not returned pet food to feed He.
Menu Foods–and any retailer that does business with them–must absolutely focus on quality control. If governments don’t mandate improved testing after this debacle, certainly the industry does.
Relying on short memory is a poor answer. Menu Foods must step forward and do everything in its power to buy product under the strictest standards, test, and brand its products with test that customer can trust.
Otherwise, Menu Foods might be in court room next to Michael Vick.
There is a large block of consumers that are ready for high quality pet food. They are flocking to stores like mine (an independent pet supply shop) looking for the perfect food. Buy American has never been stronger. My best selling brands are the ones where I can assure the pet owner that the pet food plant is US based, US owned, and US sourced ingredients. They are willing to pay higher prices if I can assure them of quality.