Dive Brief:
- Nestle USA has recalled nearly 3 million products, including several varieties of DiGiorno pizza, Lean Cuisine meals, and Stouffer's meals.
- Nestle is recalling the products due to potential contamination with pieces of glass, which ended up in the spinach used in all of the different products.
- The company is still conducting an internal investigation and said that no injuries have been reported.
Dive Insight:
Nestle management told The Wall Street Journal that this recall is "relatively limited" compared to last year's Maggi recall in India, so the company isn't concerned about damage to brands. Analysts say it could, however, slow the growth of the company's frozen business, which returned to growth in 2015 after product and brand revamps.
Nestle reported last month that its sales growth was the company's weakest rate in six years. The last worry Nestle, or any packaged foods producer, needs is something to derail sales and consumer trust as competition from smaller companies heats up.
Mel Kramer, president of EHA Consulting Group Inc., told The Wall Street Journal that recalls due to contamination with foreign materials are less frequent than recalls due to foodborne pathogens or undeclared allergens, but they come with their own complications. Metal detectors can't pick up on glass and plastic. And once the company finds the contamination, it's not always easy to identify the source, such as tampering or a breakdown in the supply chain.
Companies can mitigate the costs of recalls, financial or otherwise, by being proactive about addressing consumers' concerns, making visible moves to fix the problem, and being publicly apologetic. Transparency and action are crucial at these times, especially for a major manufacturer like Nestle.