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Kelloggs Recall

Posted by on Oct. 11, 2012 at 7:12 AM
  • 10 Replies

Kellogg Co. K -0.29% said Wednesday it would take a charge of up to $30 million to cover the recall of Mini-Wheats cereal in the U.S. due to possible contamination by pieces of metal mesh.

Retailers have been contacted about the recall of 2.8 million packages of Frosted Mini-Wheats Bite-Size Original and Mini-Wheats Unfrosted Bite Size, which are being pulled from store shelves. Kellogg blamed the contamination on "a faulty manufacturing part," and said no injuries had been reported.

[image]Associated Press

The incident is another supply-chain glitch for the Battle Creek, Mich., food maker, which recalled a variety of its cereals in 2010 because of odd colors and odors traced to improper packaging. It is spending $100 million this year—after spending a similar amount in 2011—to fix its supply chain, which suffered deep cost cuts, leaving several manufacturing facilities overworked and too few people overseeing operations.

Kellogg said the recall would lead to a third-quarter charge of between $20 million and $30 million, but reiterated its existing full-year earnings' guidance of $3.18 to $3.30 a share.

The maker of Pop-Tarts, Rice Krispies and Eggo waffles, which reports earnings on Nov. 1, said the performance by its recently acquired Pringles snack business and changes in estimates for some nonoperating items would offset the recall expenses.

The company's breakfast offerings has been growing much slower than the snacks business, and cereal sales declined slightly in the second quarter compared with a year earlier.

Competition in the breakfast business has become fierce, in part because of expanded fast-food offerings and the faster sales growth of private-label cereals as price-conscious consumers trade down from brand names.

by on Oct. 11, 2012 at 7:12 AM
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Replies (1-10):
michiganmom116
by Rhonda on Oct. 11, 2012 at 7:14 AM

Wow.  I'll stick to my homemade breakfasts...it's a good thing!  TFS!

proudmommy690
by on Oct. 11, 2012 at 10:28 AM
Tfs
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Bradensmommy719
by Bronze Member on Oct. 11, 2012 at 10:52 AM
Wow! Glad hunny didn't buy a box last night.
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othermom
by Danelle on Oct. 11, 2012 at 10:55 AM

Thankfully we haven't bought any in a while.

mommyto3bees
by Member on Oct. 11, 2012 at 11:49 AM
Good thing I don't buy those
sanj1213
by Juanita on Oct. 11, 2012 at 12:29 PM
Good to know, ty.
elijahsmama09
by Member on Oct. 12, 2012 at 11:56 AM
I buy the Aldi's version...almost never buy name brands. I keep hearing about all these food recalls...it makes me want to just not buy anything I didnt raise or make myself.
ethans_momma06
by on Oct. 12, 2012 at 2:30 PM

Glad they're taking care of it.

eustacejessica
by Jess on Oct. 14, 2012 at 1:46 PM

TFS

Godspitgrl
by on Oct. 14, 2012 at 8:26 PM

hm.

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