Analysts Say Menu Foods “In Critical Condition” After Pet Food Recalls

Menu Foods

Menu Foods is dealing with huge losses, class action lawsuits, and cancelled clients after their massive pet food recalls earlier this year.

Their troubles have been described as “a car crash in slow motion.” The damages continue to pile on, and analysts question if Menu Foods will survive this crash or if it will be fatal.

Some of the “injuries” Menu Foods is dealing with: Procter & Gamble’s announcement that it will no longer buy canned food and wet food sold in pouches from Menu Foods, and Mars Petcare has also decided to cancel their ties with Menu and has bought Menu Food’s production facility in South Dakota. Not only are major clients leaving Menu Foods, their share prices continue to drop. Currently, their shares are trading at just over $2. Their shares used to be around $7. Their second quarter sales of this year were down to $47.2 million, compared to $84.3 million in the same period last year. This reflects a 44% decrease.

What may be even worse for Menu Foods is the crushing blow to the company’s reputation.

“What is most damaging to the company is its ability to do business in the future, not necessarily the cost of the recall itself,” said Niraj Dawar, a marketing professor and brand management expert at the Richard Ivey School of Business.

Dawar said Menu Foods is in a critical situation. When companies have handled massive recalls poorly, it has been known to ruin companies. In 1990, Perrier recalled 200 million bottles of water after a lab found traces of benzene in their product. Due to the recall, San Pellegrino, a competitor, stepped in, and Perrier never recovered and was eventually bought out by Nestle.

In June, Menu Foods put in place a shareholders’ rights plan to prevent the threat of a hostile takeover.

Aleem Israel, an analyst with Cormark Securities, said Menu’s clients are not willing to forgive and forget. Not only is Menu Foods losing large clients, but other smaller companies that contract production to Menu Foods could also cancel their contracts and severe all ties with the company.

Menu Foods has already lost an estimated 80 percent of its contract business, in which it supplies other pet food manufacturers with their food. This represents about 45 percent of the company’s total volume.

Despite all of the company’s troubles, the private label markets for Menu Foods has still remained about the same. Wal-Mart and Canadian Loblaws sell the company’s products under their in-house brands. Loblaws said they will remain committed to Menu Foods.

“We’re still doing business with them and we’re feeling confident and comfortable,” said Loblaws spokesperson Elizabeth Margles.

Menu Foods said most of their private labels will continue to do business with them.

Israel said: “The private label customers and retailers realize that Menu wasn’t at fault.”

Source: Macleans

41 Responses to “Analysts Say Menu Foods “In Critical Condition” After Pet Food Recalls”

  1. 2CatMom says:

    Let me get out the world’s smallest violin for them! Boo Hoo Hoo …not

  2. highnote says:

    I think Menu is at fault and any company that fails to test their products before selling them. All food! pet and human should always be tested before the sell. Menu and these other companies are suppose to quarantee their products. Anytime anyone makes a profit off of something they should be sure that the product will not harm anyone or anyones pets.
    The recalls on our products and the pet products is getting totally out of hand. They are selling items without testing the products and this should stop. It is totally any companies responsibility to make sure any product is safe before the sale of it.
    This includes anything they would put into foods.
    Our pets have suffered badly and there will never ever be a time that we can trust any company any more. There just has been to much suffering over it all. As long as any of these pet food companies continue to make low quality pet food then very few people will be buying them and also as long as they do not test their products.

  3. Carol says:

    I am so sick of hearing Menu was not at fault—–they were as much at fault as the Chinese companies who sold the melamine laced poisons–I am glad to see that the article mentions how poorly Menu handled this recall—if you were to listen to just Mr H –he thinks MF did everything well and were victims—-I think the victims are in my livingroom right now—and in many of yours too!!! When MF and Mr H finally admit that they are just as much at fault and they regret how poorly they treated affected pets and their owners, I think then I may believe some of what he says. Until then MF and Mr H has proven they don’t care about pets IMHO. If he disagrees he can certainly contact me through Itchmo!!!

  4. Lynne says:

    I guess going China Cheap didn’t work out too well for them, did it?

  5. straybaby says:

    should we throw them a pity party? lol!~

  6. Cynthia says:

    Hurray, Hurray Hurray!!!

    They’re getting what they deserve! I hope they suffer like they made everyone else suffer. There was no excuse for they way they handled the recall, especially when they waited weeks before deciding to announce the recall.

    I remember calling up various pet food companies and telling them, as long as they did business with Menu Foods, I wasn’t going to buy their product. That was when I was looking for pet food, now I make my own. I don’t trust any of them.

    You know, if we boycotted products from China, and companies who buy from them, just maybe we could make an impact, like we did with Menu Foods.

  7. Debbie4747 says:

    Part of me wants to say that they did indeed get bad goods from China, unknowingly. Fine. But geez, the way they handled it and stttttaaaalllllleeedddd for sooooo long before recalling anything was a flat out sin. To me that was the most unforgivable part of it all. I still say they should be forced to eat their own product.

  8. mittens says:

    anyone for dancing on their grave?

    suits them right- car crash in slow motion that. my cats were thankfully uneffective by them however i watched 3 cats die this year- mostly the diseases of old age- but the one who had chronic renal failure-everyday was a new experience in getting my heart dragged from my chest and kicked around the room. while waiting for the vet to come and euthanize my poor baby, i just lay down on the floor beside her feeling helpless and lost. it made me crazy not being able to comfort her, help her, save her. i can’t imagine knowing someone was directly responsible.

    enjoy the pain, a-holes. i know i’ll savor it.

  9. catmom5 says:

    Made my day! If you sell it, you’re responsible for the quality. PERIOD! END OF DISCUSSION! Apparently MF continues to wallow in its “victim” mentality. They had other choices. No sympathy from me ~ no time because I have a sick cat (thanks Nutro).

  10. Phoebe says:

    Boycotting works, especially when it is so well-deserved.

    Menu may have gotten tainted ingredients from China, but that makes them no less culpable for using those ingredients. And hounding grieving pet owners who had filed suit against them is not the best way to get anyone on Menu’s side. The company has earned its “critical condition.”

  11. 2CatMom says:

    My views are closer to Debbie4747’s. A company can’t test for everything and melamine wouldn’t be something that would normally be tested for. However, when the first reports came in which were in December 2006, they had an obligation to pull everything and have it tested for everything and anything. Even after 16 animals died in their own tests in February 2007 they did nothing.

    The unfortunate thing is that the executives will land on their feet - they always do and the poor shmoos who were packing the boxes will end up without jobs. I can only hope that the next place one of these execs applies to is run by folks who know what happened and are animal lovers.

    Can you spell PARIAH?

  12. Carol A. says:

    Menu can’t blame it all on the Chinese “other”. What about the CEOs that tell their suppliers, “we want it cheaper”. Or the shareholders that say “we want larger profits?” They ARE culpable and they DO have responsibility in this.

    I can just see them trying to squirm out of this now by declaring bankruptcy or folding into another company to avoid the 100+ class action lawsuits in North America.

    Boycotts are a very good thing to to. The only thing these companies will ever really understand is when people stop buying this garbage.

  13. NH says:

    If Menu Foods were to go bankrupt, unfortunately, the “little man” would suffer - the people who do the work…receptionists, line workers, etc. The “big man” would just retire to his/her mcmansion.

  14. Carol A. says:

    Well if people get laid off I realize that is difficult…but perhaps these companies should not exist if they are producing stuff that is poisonous…there have to be other jobs for these people to get that doesn’t involve producing garbage for our pets to eat.

  15. Jenny Bark says:

    I posted this last night on another thread. The Sunday paper in the Parade section (I think most of you get it too) there is an article by Karen Halligan “The right food for your pet”. She is against home cooking & organic says we should buy commercial. Most people don’t have the knowage to cook for their pets. If you go to parade dot com & scroll down the left side to the bottom click on Ten treat recipes for your pet then click on her article the right food for your pet to read what was in the paper. The treat recipes where are only on the web. They have 3 pages of comments with most being against her. I guess she was on the Today show too. It realy gets me mad that people who are not on the net or pet sites only get to read this kind of garbage. I told her I thought she was working & getting paid by the pfi. Take a look you might get mad too. I feel bad for people who love their pets like we do & don’t get both sides. I also brought up about all our dead pets thanks to commercial food.

  16. Jenny Bark says:

    You have to register for the site if you want to commet, but it’s free.

  17. Anonymous says:

    “Menu’s clients are not willing to forgive and forget.” YEAH!!! Our message has been received.

    THEY GET BY W A LITTLE HELP FROM THEIR FRIENDS “private label markets .. remained .. same. Wal-Mart and Canadian Loblaws sell the company’s products under their in-house brands.”

    “Mars Petcare ..to cancel their ties with Menu and has bought Menu Food’s production facility in South Dakota” THE MORE THINGS CHANGE THE MORE THEY DON’T! THE ONLY THING THAT WILL MAKE MARS ANY MORE RESPONSIBLE THAN IT WAS BEFORE —– IS CONSUMER PRESSURE.

    I don’t care where they can or bag it. We must have full disclosure on actual ingredients, no substitutions allowed, and mandatory country of origin labelling with stiff penalties for failure. Then, a watchdog agency that is reponsible to the consumer, not the profiteer.

    Poster comment: A company can’t test for everything and melamine wouldn’t be something that would normally be tested for.
    ** I think that a) either they all knew what was going on and played dumb or b)remember that names of ALL toxins have not been released to the public. STILL: they should know WHO and WHERE their raw materials are coming from and should inspect the raw facilities at their source. This leaves no loopholes for their screwups and no loopholes is what we are demanding.

  18. Judy says:

    This is what I don’t understand anyone saying “menu is not at fault” What does that mean??? They had how many dead cats at their testing facility? How are they not at fault when they knew animals died from the food and still they waited!

    Oh wait that’s right they needed to sell some shares of their stock first. Yeah I feel real bad for them.

  19. Jenny Bark says:

    corn gloten, wheat & flour, & rice flour can be checked, especialy when you are getting it so much cheaper from China. Imo if they would have checked they might not known what was in it but they should have known it wasn’t what they ordered.

  20. Anonymous says:

    http://www.commondreams.org/ar.....9/03/3589/ Outsourcing Complicates Food Recalls : brief excerpt
    “If people cannot trace a product back to a supplier, the supplier has no incentives to keep their processes as clean and effective, in terms of food safety, as possible,” said Caroline Smith DeWaal, director of food safety for the Center for Science in the Public Interest, a consumer group.”

    “Traceability is critical to ensuring processors use the highest standards of care,” DeWaal said. “When their identities are hidden behind multiple labels and poor traceability information, they can use whatever practices they want because they’re probably not going to get caught.”

    “One reason we are seeing this is because it’s becoming a common industry practice,” said Dr. David Acheson, who leads the Food and Drug Administration’s food safety efforts. Acheson said he knew of no evidence that outsourcing production is inherently less safe than traditional arrangements in which companies make what they sell.

    GROUP SCREAM

  21. Pukanuba says:

    Geez, Mr. H., my heart sure goes out to you & yours…….yeah, right! Cry me a river, you’re breaking my heart……(grin grin).

    Listen up all you pf companies out there…….just watching Menu take a nosedive (as in a car crash in slow motion), let this be a lesson to you on how NOT to handle a recall. Had they acted responsibly & quickly, millions of animals would have been saved from a wicked death or an illness from which they may never recover. Not that any of you acted any more responsibly IMHO. All of you are experts in passing the buck & finger pointing……but Menu is probably going to take the fall. That’s fine with me because I would never buy anything produced at any of their facilities anyway.

    I certainly don’t want to gloat but I do feel that Mr. H & his handy dandy crew are getting exactly what they deserve……end of story.

    And, as Anonymous would say: GROUP APPLAUSE

  22. nora says:

    Menu foods testing labs fed those captive dogs and cats poisoned food to die painfully and miserably alone when they already knew it was killing Pets owned by consumers and at shelters!!!!! They are F-n murderers. Die M f-krs DIE! I hope Menu foods NEVER recovers.

  23. Sharon says:

    The people at Menu Foods and Walmart are murderers. I hope they go under. No little man is going to lose anything, hopefully those who kill for a buck will lose everything. The shareholders ought to sue the board and president of the company. There is an amazing lack of responsibility in the world these days. Until we hold them accountable nothing will change.

  24. 5CatMom says:

    Israel said: “The private label customers and retailers realize that Menu wasn’t at fault.”

    Then the customers and retailers are as stupid and out of touch as is MENU FOODS.

    Menu got the ingredients from the “China source experts”, failed to adequately test incoming ingredients, used the ingredients in their manufacturing process, failed to adequately test their finished product, then shipped the poison and killed thousands of dogs and cats.

    You better believe MENU FOODS is to blame for this!

  25. 2CatMom says:

    Jenny Bark - I saw that too! I googled her name and she has a web site. She is currently the Director of Vet Services for the Los Angeles SPCA.
    She appears to be a major talking head that appears on TV when a pet issue arises. And she has a book endorsed by Betty White (bless her wrinkly old self).

    I went this AM to give my feedback - I can summarize it as …gggrrrrrr..

  26. Jay says:

    Let us not forget another big supporter of Menu Foods. SAFEWAY.

    Their Priority brand, canned or pouched, is and was part of the murderous results we are still seeing. Also, they never posted warnings or updates about the recall on the counters or shelves.

    Don’t buy pet food at Safeway until you read that they have given Menu the boot. Indeed, this same adequate reason to spend less on everything at Safeway.

  27. Lynn says:

    You will never convince me that Menu Foods isn’t responsible for every microgram that goes into their food. Baby food companies have stringent Quality Assurance Testing and there is absolutely no reason why pet food manufacturers and distributors cannot follow suit.

    Menu Food was not a victim of shoddy, poisonous food products from China. Menu Foods chose to take a gamble all in the name of getting supplies cheap.

    I hope the company shuts down and all its officers are left destitute.

  28. purringfur says:

    For those couple of people who previously posted in support of Menu Foods a few days ago such as “PILOT” and another person, who’ve written about the laid off Menu Foods employees and sounded like laid off employees:

    Direct your anger over being laid off at Mr. Henderson, who delayed the recall when he knew of complaints about the food possibly back as far as December 2006, January 2007, February 2007, and into mid-March 2007.

    Direct your anger at Mr. Mark Wiens, Chief Financial Officer of Menu Foods, who sold his stock on Feb. 26 and Feb. 27, 2007. That was almost 3 weeks BEFORE the initial pet food recall started.

    From usatoday dot com: “The chief financial officer of Menu Foods sold almost half his shares in the company just three weeks before a massive recall of its pet food products, Canadian insider trading reports show.
    CFO Mark Wiens sold 14,000 shares for $89,900 on Feb. 26 and Feb. 27. The shares are now worth about $54,000.”

    http://www.usatoday.com/money/.....ares_N.htm

    Where is STEVE to ask “When do the investigations begin?”

    Listen online to the Menu Foods Income Fund 2006 Fourth Quarter Results conference, to I believe Mr. Henderson, talking about the price of aluminum cans going up. Well, he saved a lot of money on ingredients by buying cheap ingredients from an unknown source to please his share holders who wanted a hefty quarterly dividend check. Did you see a hefty raise? Did you see increased benefits for your families?

    THOSE are the people to direct your anger at.

    To the innocent Menu Foods employees who are laid off: Start sending out your resumes before your unemployment runs out. I wouldn’t hold your breath waiting to be called back. This is going to take a long time, and the picture appears very bleak for Menu. Some of the larger contracts (and they certainly share the blame as well) have turned their backs on Menu forever and are trying remake their images, and more contracts will be lost when they see their food not selling. Go back to school to learn something other than the job you are doing.

    You can ask Mr. Henderson to start a “Family Fund” to help all the loyal Menu employees weather this hardship of being laid off and are trying to survive on a lower income. If you have a union, ask your union president to approach Mr. Henderson about this. Let us know what the answer is. If you can’t pay your mortgage or rent, ask Mr. Henderson if you can have a loan or ask to stay at his house (or one of many houses, if he has more than one). Ask him to pay your family’s medical bills when the situation arises.

    Mark my words… The Menu Foods recall scandal will be documented in Business 101 and Public Relations 101 college textbooks as the WAY NOT TO HANDLE A RECALL. Mr. Henderson’s and Mr. Wiens’ names will be in boldface type.

    Are you hearing a lot of hype on how well the company is doing? Look at the plunging stock reports for the facts. Go into the pet food aisles in grocery stores. They’re deserted. The shelves are stocked full. The stuff is NOT selling. Look at the thousands and thousands of pet owners who have vowed to never buy large company commercial pet food again. Look at the number of home cookers or raw feeders as a result. Look at the boycotts of the pet food companies’ parent companies. This is no small event in history, and you should prepare for the future of your families now.

    I sincerely hope you and your families are still doing well, but any anger you feel over being laid off is misdirected at the thousands and thousands of pet owners whose pets have died or are still fighting to live as a result of Menu’s actions or lack of actions. We are not buying the food because of how Menu and its contract companies handled themselves. We now know about the pet food industry, just as you should now know how your company reacted. You can believe that your company could not speak out due to legal counsel, but look at how CEO James Burke of Tylenol handled its recall during the Tylenol tamperings. It’s a textbook case of what TO DO: think of protecting people FIRST (pets in Menu Foods’ case), and later… think of the company profits.

    If Menu Foods would have followed Tylenol’s example for the recall, you would most likely still be working. I’m sorry for the innocent workers who are worried about their families’ futures and I wish them well, but Menu Foods sank its own ship.

  29. Katie says:

    All companies are responsible for their end product. It should be safe and not sicken or kill. Menu Foods, you are paying the price for being greedy and sloppy. No sympathy from me.

    Katie

  30. Jenny Bark says:

    Purringfur GREAT job I know we all agree with you.

    2CatMon, I whent to her web site too, filled with Iams cupons & of course 4 out of 5 vets recommend Iams. I just feel so sorry for people who arn’t on the web because they love their pets too. Maybe if Parade gets enough comments they might have a different article in a week or two. Always pray for the best anyhow, even if God says no.

  31. Jenny Bark says:

    E. Hamilton, where are you? I don’t want to bug you but I realy want to know if you are ok. I haven’t read your posts for awhile.

  32. thomas says:

    Boycott Menu foods and all pet foods until we get safe products. At least with home cooked we know it doesn’t contain melamine , cynaruic acid, acetaminophen , or any other chemical cocktail. Also boycott anything with corn gluten , high frutcose corn syrup or vitamins made in China even by American owned companys in China . Bring ouer factorys and business bacl here and any pet food company employees who loose their jobs will be able to find work.

  33. Trudy Jackson says:

    YEAH, they got what they had coming. It worked. the boycott worked. Thanks to all the people.
    Now, let’s keep boycotting China, and the Olympics, and make them all give us COOL.

  34. Kiki says:

    Keep the BOYCOTT alive against ALL corporate pet food. Let’s just hope that MF doesn’t come back as a “different company”.. shut down for good LOSERS!!

    I will never forgive or forget how they mismanaged/lied during this prolonged crisis while thousands of pets were sickened or killed.

    They deserve nothing less than to lose their @$$ess

  35. Pukanuba says:

    I think Ann Martin would be the perfect writer to follow up that story in Parade. Boy oh boy, would she ever have something to say about that article.

    purringfur…….right on!

    Maybe the very wealthy execs at MF will help out all their employees & share all their ill-gotten gains……yeah right…….just like they helped out all their loyal customers. Sure feel sorry for the worker bees but the execs are too busy running around trying to squeeze out every last cent to get a huge bonus before the company goes into the ground. Like they really care about anyone but themselves. Bye bye…….

  36. Trudy Jackson says:

    They will never suffer like We all did when losing our pets, members of our families.
    Right, Keep up the boycott!!!!!!!!!

  37. JJ in IL says:

    purringfur you said it the best - Menu Foods sank their own ship. May it rest down there never to arise again along with Davies Locker.

  38. Stan says:

    I realize that if more companies are held liable for there bad foods that I will in the end pay more for food for them, so be It! (I hope in the end it will make them more safe, and better foods will be available). But I will take that or make my own for my dog and two cats, they for sure are most worth it!

  39. Fiona says:

    MF Legal in Florida who are suing Hills, Purina, Iams etc. over making false claims for the food have an excellent piece on their website which shows that dead cats and dogs do go into pet food. The pet food companies have got away with an awful lot and Vets should have warned us of the illness that pet food is causing since there is an abundance of veterinary research which I have which directly blames pet food for causing diabetes in cats and dogs, kidney failure in cats, heart disease in cats and dogs, cancer in cats and this research has existed for a long time and so there is no excuse for Vets not knowing that pet food was causing illness. They sell it and make even up to 100% profit from the sale of pet food so a Vet tells me and so they failed to warn us that pet food creates the illness the Vets need.

  40. Glenn - West Monroe La says:

    Menu Foods needs to be out of business. What this is really about is saving a buck, buying poison from China because it’s cheaper. The company exec’s of these companies from China need to be brought to the United States and face a court of law and also face all the pet owners who’s animals that were very dear to them that were killed. Human lives, animal lives, that’s not what is important. It’s always about money…..If it were up to me, we wouldn’t buy a dam thing from China and the doors at Menu Foods would have already been padlocked.

  41. david says:

    MENU FOODS IS FULL OF FINE PEOPLE THAT ARE COMMITED TO DO FINE WORK AND THAT TAKE PRIDE IN WHAT THEY DO THESE ARE NOT JUST PEOPLE THAT WORK TOGETHER BUT BUT ARE A BIG FAMILY THAT ARE WORKING HARD TO GAIN THE RESPECT OF ALL THE WORLD NOT JUST PET FOOD WORLD WE WILL BE STRONG AGAIN BECAUSE WE THE WORKERS OF MENU FOODS WILL TAKE US THERE WE WILL BEAT THIS RECALL ONE DAY AT A TIME


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