From the Maggi noodles scare in India last year, now comes another food scare from Nestle's frozen food contamination in North America.
The recall of three million boxes of Nestlé's DiGiorno pizza and Lean Cuisine and Stouffer's frozen dinners in the U.S. may not be as bad as the Maggi noodles being recalled as it was temporarily stopped by the Indian government laboratory detecting lead levels above permissible limits. It was only later that the orders of the Bombay High Court have been complied with. Nestlé India has made Maggi noodles available for sale once again. Still, the food scare in North America is another bad blow for Nestle.
Nestle USA has to recall these frozen foods because consumers found glass fragments in at least finding glass fragment in their pizza and ravioli. The mass recall comes after consumers reported discovering glass particles in at least 12 types of DiGiorno, Lean Cuisine, and Stouffer's meals. Now that's scary!
In summary, analysts have this to say about the recent Nestle frozen food scare:
- Analysts said the recall could slow but not derail the improvement of its U.S. frozen business, which the analysts estimate had combined sales of around 4.5 billion Swiss francs in 2015.
- Jon Cox, an analyst at Kepler Cheuvreux in Zurich said that this is unfortunate and probably the last thing Nestlé needed because obviously these were the key brands of the company's relaunch of its frozen business in North America.
- Patrik Schwendimann, an analyst at Zuercher Kantonalbank, said recalls are relatively commonplace in the food industry. The recovery in frozen food seems under way, but this will have a negative impact in the short term. It will have a small influence on the first and second quarter sales, but after a few months it will pass. He also added that the issue isn't going to be as big as Maggi where the whole product line was removed, and wasn't allowed back on the shelves.
Regardless how the analysts and Nestle would try to appease consumers, this food scare should seriously not to be taken for granted.
