Annie's vows to bounce back from pizza recall

by Eric Schroeder
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BERKELEY, CALIF. — Shares of Annie’s Inc. fell more than 5% today after the organic and natural food company said yesterday that it is voluntarily recalling seven kinds of frozen pizza sold nationwide over the possible risk that metal fragments made their way into the dough.

Annie’s issued the recall after its contract pizza crust manufacturer identified small metal fragments in the pizza dough during a manufacturing run and in some finished pizza crust made on that same day. The source of the fragments was traced to a third-party supplier that Annie’s uses to source whole wheat flour.

“We are now sourcing flour for our pizza from an alternate mill, one that has been a long-standing part of our total supply chain,” John Foraker, chief executive officer of Annie’s, said during a Jan. 22 conference call with analysts. “As part of our ongoing review of this event we plan to reevaluate our ingredient suppliers and contract manufacturers with an eye toward identifying opportunities to toughen our plant qualification processes and to improve and refine our Q.A. procedures and controls.

“One of the improvements we have already implemented is the use of x-ray on the pizza topping line to supplement existing metal detection capabilities. This additional control will be in place as we go back into production on rising crust pizza as expected in the February time frame.”

There have been no consumer complaints, illnesses or injuries reported with the recall, which included the following varieties: 23.5-oz organic four cheese pizza; 23.6-oz organic pepperoni pizza; 25.4-oz organic supreme pizza; 25-oz organic spinach and mushroom pizza; 22.5-oz four cheese pizza; 22.6-oz pepperoni pizza; and 23.1-oz BBQ recipe chicken pizza. Annie’s declined to comment on the size of the recall.

The recall comes at a time in which Annie’s has been making progress in its frozen category initiative, especially pizza. Last fall, the company began shipping made-with-organic rising crust pizza into more than 2,500 grocery points of distribution in the second quarter, about a quarter ahead of expectations. At that time, Mr. Foraker said Annie’s was well positioned to expand its distribution footprint with retailers as it headed into fiscal 2014.

Despite the recall, Mr. Foraker said during the conference call that he believes Annie’s will rebound.

“We obviously lost a bit of momentum on the pizza roll-out as a result of this recall, but we are committed to the line and will be back in production and shipping product in the near future with a focus on building distribution in our current retailers and continuing to build a success story in this category,” he said.

In October, Battle Creek, Mich.-based Kellogg Co. recalled about 3.2 million boxes of Mini-Wheats in the United States, Canada and Mexico due to possible fragments of metal mesh that may have gotten into the products. The recall was expected to cost the company between $20 million and $30 million.

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