Second Recall Doesn't Bode Well for Struggling Nut Category

Kraft, Kroger Recall Salmonella-Tainted Pistachio Products

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CHICAGO (AdAge.com) -- Marketers and grocery stores are going nuts again, this time over pistachios.

Kraft and Kroger have issued recalls after discovering pistachio products tainted with salmonella. Although no one has been infected yet, this marks the second nut-related recall in about two months, and is likely to spell more doom and gloom for the entire category.

Kraft expanded the recall from its Back to Nature line to include Planters products that have pistachios, including some trail mixes, Heart Healthy mixes and its Pecan Lovers Mix.
Kraft expanded the recall from its Back to Nature line to include Planters products that have pistachios, including some trail mixes, Heart Healthy mixes and its Pecan Lovers Mix.
The earlier peanut recalls have already affected overall nut sales. According to Nielsen, sales of nuts in grocery stores (including Walmart) fell 4% in the three months ended Feb. 21, to $208 million. Price increases have masked the greater losses in nut sales by volume, down 11% in the last three months, to 44 million pounds.

Peanut sales have actually suffered less by comparison, down 3% in the same period, to $42 million. Peanut sales by volume are down 7%, to 17 million pounds. Peanut butter has also suffered in the wake of the recalls, even though top brands such as Peter Pan, Jif and Skippy were not involved in the recalls. Sales of peanut butter by volume fell 13% in the four weeks ended Feb. 21, also according to Nielsen.

Eschewing the category altogether
Crisis expert Robbie Vorhaus said most consumers don't have the time to pick apart which nuts or nut products are affected by recalls. Most people will eschew the category altogether until they hear the foods are safe again. "This will probably not only affect products with pistachios but it's likely to have a blush affect on peanut-butter sales again," he said.

Kraft, which began recalling products last week, expanded the recall from its Back to Nature line to include Planters products that have pistachios. Those include some trail mixes, Heart Healthy mixes and even its Pecan Lovers Mix. The Food and Drug Administration credited the Northfield, Ill.-based food company for identifying the problem when it issued its own alert yesterday.

Setton Pistachio, the source of the outbreak, is recalling 1 million pounds of pistachios and suspending operations. The FDA said its investigation is ongoing and is likely to affect "many products" and result in more recalls.

Whether marketers will embark on advertising with food-safety themes remains unclear. Kraft spokeswoman Laurie Guzzinati said the food giant isn't currently considering any such measures. But the recalls have deeply hurt sales for a variety of players. Last month American peanut farmers mounted a food-safety campaign.

Promoting food safety
Fast-food companies, rocked by similar concerns, have launched food-safety campaigns nearly across the board. McDonald's carried its food-safety program throughout last year, with a website, web videos, outdoor and TV ads. Those efforts are reflected in the chain's new packaging, which is rolling out worldwide in the next year.

Mr. Vorhaus said part of the problem with recalls is customers don't have a way of knowing "when it's safe to go back in the water." While communication about unsafe products is carried far and wide, the FDA doesn't issue statements that products are now safe or that recalls are over, he said.

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