Thursday, June 30, 2016

Company Considers Changes After Sunflower Seed Recall

The company responsible for the sunflower seed / Listeria recall, SunOpta, is looking at long term options for the company. One immediate change was to move the Quality function out of operations.

Star Tribune
Pressed by big shareholder, SunOpta selects adviser to review options
Firm shifts quality assurance duties, hires strategic adviser in wake of sunflower nut troubles.
By Kristen Leigh Painter Star Tribune
June 28, 2016 — 9:08pm
Battered by recalls over potential listeria contamination, SunOpta Inc. announced changes to keep consumers safe and respond to shareholder criticism.

The company, which supplies food manufacturers with organic and nongenetically modified ingredients, hired the financial advisory firm Rothschild Inc. to review its operations at the insistence of its largest shareholder.

The shareholder, Tourbillon Capital Partners, initially wanted SunOpta executives to explore selling the company. But it later agreed with the company to bring on Rothschild, with legal help from Davies Ward Phillips & Vineberg LLP, to explore "strategic and financial actions that SunOpta could undertake to maximize shareholder value," according to a statement.

Tourbillon and other investors have been critical of SunOpta's sluggish performance over the past two years, noting growing consumer demand for natural and organic products from which the company could benefit.

At the behest of Tourbillon, SunOpta's board of directors also announced that it hired Russell Reynolds Associates, an executive headhunter, to find new candidates for the board.

Toronto-based SunOpta, has most of its corporate functions based at its U.S. headquarters in Edina. The company also operates several plants in Minnesota. Its Crookston plant is the site of possible listeria contamination and was closed from the day of discovery, April 21, until early in June.

While no illnesses have been reported, SunOpta voluntarily recalled its sunflower nuts, packaged under the Planters brand and a regional brand, Dakota's Best Biggy'z, at the beginning of May. The company would go on to expand the production window and brands for the recall twice. The processing window for the potentially tainted nuts spans nearly a year, from May 31, 2015, through April 20, 2016.

SunOpta is a sizable supplier of sunflower nuts. The potentially contaminated products spread through the food system, prompting recalls at many large food processors and retailers, including General Mills, Kroger, Trader Joe's and Treehouse Foods.

SunOpta discovered the issue when one of its customers tested a batch of sunflower seeds and it came up positive for listeria.

In response to the crisis, the company announced Monday that it is moving quality assurance responsibilities from the company's operations department to Jim Gratzek, SunOpta's senior vice president of research and development.

"This change will also allow our operations teams to more single-mindedly focus on efficiency improvements in our plants and in our global supply chain, thereby enhancing our ability to achieve our stated goal of increasing gross margins," Rik Jacobs, SunOpta president and chief executive, said in a statement.

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