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Kelloggs recall

Posted by on Oct. 11, 2012 at 7:09 AM
  • 5 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 7:09 AM
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Replies (1-5):
elle31106
by on Oct. 11, 2012 at 3:39 PM

Thanks for this.  I love mini-wheats!

i.heart.myboys
by Amber on Oct. 12, 2012 at 5:30 PM
TFS
Posted on CafeMom Mobile
mommyfrey83
by Tianna on Oct. 13, 2012 at 12:06 PM

Thanks! My husband buys these all the time. 

mem82
by Representative on Oct. 13, 2012 at 5:20 PM

eek!

parkersmama08
by Jerra on Oct. 14, 2012 at 9:10 AM

I think I prob ate a box of these, but I don't have it anymore. :(

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