Frozen Berry Recall Melts Down Patties Foods’ Profits

A costly recall of Nanna and Creative Gourmet brands frozen berry products prompted by a Hepatitis A viral infection scare in February has contributed greatly to an 88% plunge in profits for Patties Foods. The Australian producer of frozen fruits, desserts, meat pies, pizza and other baked goods announced on August 24 that net profit for the fiscal year ending June 30, 2015 was $2.1 million, down from $17.7 million in 2014.

"However, it is important to note that total company revenue grew by 3.7% despite the effects of the frozen berries recall, which indicated that the savoury business performed solidly with all core brands growing revenue and profit," stated Chairman Mark Smith.

creative-gourmet-before-afterPatties Foods’ Creative Gourmet frozen berries packaging has had a major makeover since the product recall earlier this year. The fresh new look and pack literally takes consumers" outside the box," as seen in these “Before” and “After” images. The company’s new re-sealable, freezer- and environmentally-friendly bags come complete with on-pack recipe suggestions.

Overall sales for the Bairnsdale-based group added up to $257 million, advancing from $248 million the year before. Earnings per share amounted to 1.5 cents, compared to 12 cents each in 2015.

CEO Steven Chaur noted that the past 12 months have been “challenging” for Patties Foods, which coped with “substantial increases” in beef prices as well as fallout from the berry recall.

"Despite these pressures, the company has proactively worked to help mitigate any long-term effects and focuses on driving its core savoury business, which continues to perform solidly and has gained profitable market share in all key channels," he commented.

An outbreak of Hepatitis A viral infections in Australia, believed to be connected to consumption of frozen berries sourced from China, led to a call for review of the nation’s system for inspecting imported food products. The common denominator of multiple cases reported in Queensland, Victoria and New South Wales appeared to be the consumption of frozen mixed berries distributed by Patties Foods.

Since the recall, no traces of Hepatitis A or E.coli have been found in either the Nanna’s or Creative Gourmet berry ranges, which the company says are now “amongst the most rigorously microbiologically tested” frozen berries sold in the country.