The CEO of Canada’s Menu Foods, which owns the Emporia’s Menu Foods Midwest plant, above, says the company continues to recover from the problems created by the massive recall of pet food produced at the Emporia plant and another company plant.
Production at the Menu Foods Midwest plant in Emporia has improved, Chief Executive Officer Paul Henderson told The Gazette, but it could be some time before the pet-food plant reaches pre-recall levels.
The Emporia plant was one of two in the Canadian-owned company to have shipped tainted pet food, which led to a massive recall in March after several pets became sick or died from eating the food.
The contamination was ultimately traced to wheat gluten from a Chinese supplier, who had added melamine to the food. Melamine can “spike” protein levels in pet food, making them appear higher than they actually are.
The Emporia plant shut down March 23 for what was supposed to be a few days. But even after the plant re-opened in April, production remained below usual levels and several line workers were not immediately called back to the plant. Henderson confirmed that staffing levels in Emporia are still below what they were before the recall, though he didn’t give any specific numbers.
Sales fell by 44 percent in the second quarter as a result of the recall, according to Reuters news.
Henderson did not disclose specific numbers but said production began looking better around mid-year when most of the company’s private label customers started buying from Menu again.
“In the latter part of the second quarter, we resumed shipments of cuts and gravy products to most of our private-label customers, and we had a significant jump in sales during the month of July as our customers rebuilt their inventories,” Henderson said in an e-mail interview with The Gazette. “While we do not expect sales to continue at this level, the rebuilding of inventory by our customers is the next logical step in re-establishing the business.”
Losing clients
While many customers have returned, there have been some notable exceptions. Menu received notice from one large customer this month that it would not buy any of Menu’s “loaf” pet food products (traditional canned food) after Oct. 1.
The company has been variously identified by The Toronto Globe & Mail as Procter & Gamble and by The Toronto Star as Wal-Mart. Menu has said only that the customer’s loaf purchases made up 10.8 percent of Menu’s sales last year.
Procter & Gamble already announced in June that it would no longer buy Menu’s cuts and gravy products, a line that accounted for another 11 percent of sales according to The Globe & Mail.
“Menu has ... disclosed the loss of certain customers, some of whom were serviced from our Emporia facility, which is likely to impact the plant’s production going forward,” Henderson said.
Overall, Henderson said, Menu estimated the direct costs of the recall at more than $45 million in Canadian dollars, which comes to nearly $43 million in U.S. currency, according to the exchange rate at the Bank of Canada’s Web site.
“We have also had to bear other impacts of the recall, such as the postponed, canceled or to-be returned orders that reduced our first and second quarter sales,” Henderson said. “That being said, we are filling new orders and have seen a positive trend towards increased sales since the second quarter. We remain focused on providing quality pet food products for consumers.”
Undisclosed staffing
Henderson’s answers did not address staffing levels at the Emporia plant. A Gazette request for that information was sent to him.
Eleven different pet food manufacturers, including Menu, wound up buying the tainted Chinese gluten. American regulators traced the melamine-laced gluten to Xuzhou Anying Biologic Technology Development and Binzhou Futian Biology Technology. Both companies had their licenses revoked and their offices closed by the Chinese government in July. Earlier that month, the former head of China’s State Food and Drug Administration was executed for dereliction of duty and taking bribes.
“This fraud on manufacturers and consumers was unlike anything seen before in the pet or human food business,” Henderson said.
Since the tainted Chinese gluten was identified, reports of other tainted or faulty Chinese products have been regularly recurring in stories internationally. The list has included seafood, tires and even children’s toys.
Henderson said the company was working with government agencies, industry groups and other manufacturers to find ways of keeping this from happening again.
“The globalization of the animal and human food supply chains is a fact,” Henderson said. “This brings new challenges and requires new industry safeguards and the resources to implement them.”
He praised the company’s employees for dealing with the situation in a “timely and professional manner.”
“It is truly unfortunate that our committed employees were adversely affected by a fraud that occurred halfway around the world,” Henderson said. “I want to thank all of Menu’s employees, who have rolled up their sleeves and are doing everything they can to move the company forward.
“Everyone at Menu is doing what we can to rebuild our business and seek out new growth.”
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