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Author Topic: Menu Foods Rebuilding  (Read 2957 times)
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menusux
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« on: November 14, 2009, 03:58:33 AM »

http://www.financialpost.com/story.html?id=2221769

FinancialPost.com November 14, 2009

"It was a year Paul Henderson says he would rather forget.

"From the moment he initiated a recall of 60 million cans and pouches of pet food in 2007, the chief executive of Menu Foods Income Fund knew life would never be the same. At least a dozen cats and dogs were dead and Menu's product was being blamed. The firm was sued. It paid out millions in legal settlements after the problem was traced to a Chinese raw material supplier.

"In just a few months, one of the country's manufacturing success stories became a corporate pariah, its name splashed and sullied all over the news.

"But a strange thing has happened since the days of pooch poisoning and souring sales headlines. Mr. Henderson is quietly rebuilding the business. And while some pet food producers are struggling to sell their higher-priced products in a recession, he's making money again.

"This week, Menu reported net income of $4-million on revenue of $66.5-million, marking the first time since 2006 it has posted three consecutive profitable quarters. Its stock, which sank from $7.45 to 61¢, has recovered to $2.30. It's gained 72% in the last six months

"One of those customers lost is Mars Inc., which has since bought Menu's production factory in North Sioux City, S.D., to make its Nutro and Royal Canin brand pet foods itself. Another is Procter & GambleCo., the consumer products giant that owns the Iams brand.

"Mr. Henderson would not discuss specific customers. But it's clear that clients representing 37% of its 2006 volume have pulled their business. The last of the defectors will be off the order books by the end of this year as they work out other alternatives, he said.


""For the [big pet food companies], there's no reason to stand shoulder to shoulder with Menu Foods," said Ken Wong, marketing professor at the Queen's University School of Business. "If I'm Procter & Gamble or anybody else, I really can't take that chance."

"Consumers may have no problem with Procter buying from a co-packer like Menu. But they would certainly have an issue if the performance of that co-packer is substandard, Mr. Wong said. "The consumer would certainly say, 'Why am I paying branded-food prices then for what is ostensibly a private-label product?' "

"Menu's contract-manufacturing work is now targeted at many of the smaller producers, many of whom do not have the capability to manufacture pet food themselves.

"But the major change in its revenue stream has come from the increase in selling premium wet pet food to stores directly, which then sell it under their own private-label brands for less than brand-name food.

"Menu says it supplies most if not all of the private label wet pet food sold by 30 of the top 40 North American pet pet food retailers.
It has three factories located in Emporia, Kan., Pennsauken, N.J., and Mississauga filling orders for supermarkets and other clients across the continent.

"Once a leading brand has established a popular product format or formulation, Menu's strategy is to offer a cheaper-priced copy to its customers within a matter of months. For example, late last year, it was the first to offer single-serve plastic trays with peel-back tops for private-label clients in North America.

"It's working. Menu says the recession has shifted consumer demand toward these products as people seek to stretch their shopping dollars further. In its most recent quarter, private label accounted for about 80% of Menu's revenue.

"For pet-food retailers and sellers looking for quality products, Menu's name remains at the top of the list, Mr. Henderson insists.

""We certainly didn't seem to have much anonymity at the time [of the recall]. But the individuals who were in positions of decision-making, who had access to the facts, gave us comfort in our ability to weather this," he said. "Menu's reputation in the industry remains one of a very high quality manufacturer who just happened to have been a victim of fraud."

"The poison scare occured after a broker sold wheat gluten imported from China to Menu and 14 other manufacturers in the United States. The gluten was spiked with melamine, a toxic substance used to make plastics, to give the impression that it contained more protein.

"Menu is still a thinly traded stock. And it does not provide earnings guidance. Its largest shareholder, Vancouver-based Deans Knight Capital Management, declined to comment on why it thinks the company is a good investment.

"But building on a market capitalization of $47-million, Mr. Henderson said Menu will continue to offer packaging his rivals are not prepared to offer, while developing unique flavour and ingredient formulations for both private and contract manufacturing customers.

""It's a memory I'd just as soon put behind me," he said of the events of 2007. "There's nothing we can do about it at this point other than learn from it and move on.""

Knowing that most pet store "private label" brands of wet food are made by Menu is reason enough to avoid them.  Don't forget that some W-M Ol' Roy and Special Kitty wet foods are still being made by MF.

Note the story talks about offering cheaper priced formulations of high-quality food.  Cheaper is what caused the 2007 disaster--trying to get the "wheat gluten" cheaper from China than from the US supplier of it. 

Cheaper meant not to test the "wheat gluten" before using it in foods; it turned out to not even be wheat gluten at all, but wheat flour.  Awareness of this would have prevented the tragedies from happening if from no other standpoint than MF would have learned they'd been cheated on delivery of it.  Henderson and his company allowed themselves to be the victims of fraud because they didn't have the common or business sense to test the "wheat gluten" first. 

If chutzpah is defined as killing one's parents and then asking the court to show you mercy because you're an orphan, Mr. Henderson and Menu Foods has it by the carload.  They put themselves in the position they were in because they didn't test their ingredients.

My understanding is that the settlement agreement did NOT call for a permanent tougher testing program, but a temporary one only. So without a permanent stringent testing program, it can happen again. Any one with links to the details?

While Henderson and Menu Foods speak of "putting it (the recall) behind them", there are many people who are unable to do so.  They have either lost pets or have sick ones as a result of Menu Foods' "economics" and if they were granted compensation, none of it is enough.

Consumers need to put Menu Foods products behind them--running away from them as far as possible.
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wicked fate
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« Reply #1 on: November 14, 2009, 05:00:35 AM »

Oh, I am so happy they are making money again. *sarcasm off*

Gee, sounds like they've already forgotten. Still looking to make cheaper stuff for more profit. WHY DON'T THESE COMPANIES LEARN!!!!  Angry Angry Angry
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lesliek
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« Reply #2 on: November 14, 2009, 07:55:40 AM »

Why wouldn't they "forget" ? Remember they only went public in the 1st place because P&G[Iams] threatened to do it for them. The only thing they have learned is how to get away with murder.
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bug
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RIP little angel Katey


« Reply #3 on: November 14, 2009, 10:15:48 AM »

OK all, but realistically, let's take a look at where we are with this company. Most of us, myself included, are still purchasing Wellness, NV, Innova, Nature's Logic, Go and many others which are all Menu made. I just don't think we can complain and condemn on the one hand and keep buying the product, on the other. Kudos to all those who have been able to switch to homemade or non-Menu foods, but really, we all know the others can be just as bad.
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My little babies, you'll always be in my heart. Mom will see you later. Look after each other, ok?
menusux
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« Reply #4 on: November 14, 2009, 11:05:27 AM »

Just going on record to say that no Menu Foods made products have ever been or will ever be used here, so Mr. H., the company and their attorneys can't say my comments are that of a person who has been involved in any of the class action suits.  Wink
« Last Edit: November 14, 2009, 11:11:39 AM by menusux » Logged
3catkidneyfailure
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« Reply #5 on: November 14, 2009, 12:57:54 PM »

http://itchmoforums.com/pet-food-questions-and-researching-foodsingredients/end-of-menu-foods-income-fund-monitoring-period-anyone-know-t7985.0.html

One lousy year mandatory monitoring period, up exactly not known, and then pet food companies and Menu Foods don't have to check
any more. Not a warm and fuzzy feeling. Like a license to commt another ...
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bug
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RIP little angel Katey


« Reply #6 on: November 14, 2009, 04:31:45 PM »

One lousy year mandatory monitoring period, up exactly not known, and then pet food companies and Menu Foods don't have to check
any more. Not a warm and fuzzy feeling. Like a license to commt another ...

I'm really hoping that they've, at the very least, learned that they have to keep testing the product. Are they THAT stupid, that they'd risk another fiasco like 2007? I sure hope not.
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My little babies, you'll always be in my heart. Mom will see you later. Look after each other, ok?
lesliek
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« Reply #7 on: November 14, 2009, 04:55:13 PM »

I really wish someone ethical would start a new canning facility.
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"the world's most inept extortionist"
bug
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RIP little angel Katey


« Reply #8 on: November 14, 2009, 05:06:15 PM »

Y'see, the wrong people in my province just won a 50 million dollar lottery. Sure, they are no less deserving of it than I, but I absolutely would have opened a human food canning facility and made human food for pets there. People AND animals could eat it and I could get around any denaturing and other cwappy pet food laws. I'll just keep buying those tickets. One day, Menu. One day...
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My little babies, you'll always be in my heart. Mom will see you later. Look after each other, ok?
dyginge
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« Reply #9 on: November 15, 2009, 07:32:24 PM »

We euthanized our "Little Kitty" due to the "poisoned" food.  We gave him Special Kitty and when I see that name or Menu, especially, I cringe.  13 pets died, ya, right. We never adopted another...yet...although we will be pet sitting a family pet soon.  Today, I went to buy food and I made sure the food I purchased was not related in any way to Menu or any company associated with them.  I spoke with a pet food rep in the store and I told her if the food is related in any way to Menu or companies associated with it, I won't buy it.  I know, it's true, some people have no choice.  

We filed a claim, of course, to date have heard nothing.  

I, too, if I won big bucks, I do the same as you...bug.  

I'm glad I stopped by ictchmo.  Thanks for the info
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bug
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RIP little angel Katey


« Reply #10 on: November 15, 2009, 07:43:26 PM »

Welcome dyginge. I'm so sorry to hear about Little Kitty. It makes me so sad to think about them and people like you who loved them so much. I wish no animal had to get sick and/or die from something that is supposed to be good for them. If my cats would eat anything that wasn't Menu-made, I'd quit buying it as well, but I have to go with what they'll eat, so I don't have much choice. As you may know by reading this forum, we have encountered many more pet food problems that have resulted in animals dying or becoming permanently disabled. I wish those in the business would have the same concern for them as we do.
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My little babies, you'll always be in my heart. Mom will see you later. Look after each other, ok?
Offy
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« Reply #11 on: November 16, 2009, 07:44:56 AM »

"Once a leading brand has established a popular product format or formulation, Menu's strategy is to offer a cheaper-priced copy to its customers within a matter of months."

I cannot help but wonder if this pfi/pfc mentality is what caused the Precise formula changes & why they said: 'Unfortunately, I can not change them back'.

Does anybody know if Menu offers a set of formulas with pricing for the pfcs to choose from or if those that use Menu for their products have control over the quality/ingredients used?

ETA: still struggling trying to find pita acceptable commercial foods. Tiki worked for all 5, but heaven help me if it comes up to feed after they've  had homemade chicken to eat  Lips sealed
« Last Edit: November 16, 2009, 07:52:34 AM by Beyond Pissed » Logged

"If the pet food does not perform in the consumer's hands, then all of the advertising on earth will not be persuasive." Dr. R. Glenn Brown. Canadian Veterinary Journal, Volume 35, in April of 1994
bug
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RIP little angel Katey


« Reply #12 on: November 16, 2009, 09:08:11 AM »

BP, I know they have some "base" formulas that they modify to make them different for different outlets. Some will want a more holistic formula, incorporating veggies and herbs, while others just want meat and vitamins. I don't know how much control they have over their product, but I will try to find this out as I seek answers to why one Menu "store brand" can has a mold spot on it (Pet Valu Performatrin mold thread).
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My little babies, you'll always be in my heart. Mom will see you later. Look after each other, ok?
catbird
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« Reply #13 on: November 16, 2009, 02:31:43 PM »

B_P, I've wondered if that is why we've started seeing so much variation in Wellness, too.  Now that it's owned by an investment firm, rather than its founders who seemed interested in producing a quality pet product, I'm sure that costs and profits rule.  Perhaps Menu has talked them into accepting poorer-quality, cheaper ingredients.
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The problem with cats is that they get the exact same look on their face whether they see a moth or an axe-murderer--Paula Poundstone
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