Here’s how much the Jif peanut butter recall could cost parent company JM Smucker
A massive recall of nearly 50 different Jif peanut butter products – one that has since expanded to affect many other companies that use them – could cost parent company J.M. Smucker $125 million.
In May, the company issued a voluntary recall due to a salmonella outbreak that spans at least a dozen states. The company’s Lexington-based plant was at the center of production.
The financial impact of the recall was first reported by Fox Business June 8 after a company earnings call, during which J.M. Smucker representatives discussed the fallout with shareholders.
A company spokesperson confirmed the accuracy of the Fox Business report last week when the Herald-Leader included it in an emailed query.
“The financial impact shared as part of our Q4 earnings presentation, as reported below, is correct,” J.M. Smucker spokesperson Frank Cirillo wrote in the email.
In response to a follow-up email asking how many Jif product units had been impacted by the company’s recall, the current status of operations at the Lexington plant and next steps, Cirillo said Jif is looking to get its peanut butter back in grocery stores.
“As part of our response to the recall we have taken several steps to strengthen our already stringent food safety processes, including increasing our finished product testing and environmental testing,” the spokesperson wrote. “With confidence in our food safety processes and the additional measures we have put in place, we are working as efficiently as possible to return our products to store shelves.”
Cirillo added that Jif’s Lexington plant is now taking orders again.
“We have resumed accepting orders from our retail customers at both our Lexington and Memphis facilities and expect products to be back on shelves shortly. The health and safety of our consumers remains our top priority and we are confident our safety and quality processes support our ability to continue to deliver on this commitment,” Cirillo wrote.
Shoppers may remain weary for sometime, however, with the uneasiness reflected in J.M. Smucker’s stock price.
May 15, J.M. Smucker’s stock price was at $144.28 a share. Then it began tanking.
It fell to a low of $122.72 a share by May 22 – a decline of 15% – two days after the voluntary recall was announced by the U.S. Food and Drug Administration.
As reported by Fox Business, the company’s latest earnings report estimated the “impact of manufacturing downtime, customer returns, and unsaleable inventory, as well as other recall related costs” could result in a $125 million loss for fiscal year 2023.
That said, the company also stipulated the “ultimate impact from the Jif peanut butter recall could differ materially from these estimates,” Fox Business reported.
Do you have a question about safety in Kentucky for our service journalism team? We’d like to hear from you. Fill out our Know Your Kentucky form or email ask@herald-leader.com.
This story was originally published June 22, 2022 at 1:17 PM.