business news in context, analysis with attitude

With brief, occasional, italicized and sometimes gratuitous commentary…

•  NBC News reports that "Starbucks has withdrawn a recently introduced breakfast chicken sandwich from its locations, saying Friday the seasonal item failed to meet its standards for quality.

"The Seattle-based company said it issued a voluntary 'stop sell' for its chicken, maple butter and egg sandwich on June 26. Any claims the item caused specific illness are simply false, Starbucks said … 'The quality issue that was identified by Starbucks would not lead to food borne illness and any reports linking the stop sale to illness are inaccurate,; Starbucks said in a statement."

Two questions.  One, since this was part of Starbucks' efforts to revitalize its food business, especially at lunch, how did it get into the stores if there was a question of quality?  And second … does "chicken, maple butter and egg" really sound like a good combination to anybody?

•  The BBC reports that "Heinz has reached an agreement with Tesco which will see some of the UK's best known products back on the supermarket chain's shelves in the next few days.

"Last week, the food company had stopped supplying Tesco with products like baked beans, ketchup and tomato soup after a disagreement over pricing.

"The row had led to shortages of some popular items.

"However the supermarket have now said that 'the full range of Heinz products' will return to Tesco shelves and online … both companies have now sorted out their differences, although no details on the deal have been revealed."

Without knowing the specifics of the agreement, I remain convinced that at least from a public relations point of view, this will be seen as a win for Tesco - anytime a retailer seems to be acting as an agent for the consumer as opposed to a tool for the manufacturer, that's a good thing for the business's image.

•  From the Wall Street Journal this morning:

"Tyson Chief Executive Donnie King said he is committed to fixing the nation’s largest chicken operation, which produces roughly one-fifth of the U.S. supply. The effort now faces a test, as profits from Tyson’s beef business are projected to decline this year from record levels, while the company has committed millions of dollars to expand its chicken production … The Arkansas-based company has struggled for years to meet demand and turn a consistent profit in its poultry business. The problems have persisted through a succession of chief executives, with five different CEOs leading the company in as many years.

"Tyson’s challenges have played out across its sprawling operations, from problems hatching enough of the tens of thousands of chicks scampering inside cavernous barns that dot the Arkansas countryside near Tyson’s headquarters, to short-handed processing lines in the plants that slaughter and process the birds into chicken breasts or wings.

"Demand for chicken is hot, from supermarkets to fast-food chains battling over crispy chicken sandwiches. Tyson’s problems have meant that the biggest U.S. chicken processor hasn’t been able to consistently fulfill growing customer orders, while its profitability has suffered. The company has had to pay more for grain to feed its chickens and wages to keep plants staffed. To meet orders, Tyson has sometimes bought chicken from rival processors, Mr. King said, at a time when boneless skinless breast prices have tripled since the start of 2021."

•  From the Wall Street Journal:

"Abbott Laboratories has reopened its biggest factory after a shutdown last month that dealt another blow to efforts to replenish the country’s short supply of baby formula.

"Abbott on July 1 reopened its plant in Sturgis, Mich., following a nearly three-week closure that stemmed from severe thunderstorms that blew through southwest Michigan, a spokesman confirmed on Sunday. The company has restarted production of its EleCare formula, a formula for babies with digestive issues, and will begin shipping in the next few weeks, said spokesman John Koval.  Mr. Koval said Abbott is working to restart production of its formula Similac as soon as possible.

"The company said on June 15 that it stopped production at the plant to assess damage caused by the storm and to clean and sanitize the facility. The company said areas of the plant had been flooded, but didn’t elaborate on what damage may have resulted.

"When the storm hit, the Sturgis plant had been open for just over a week following a multi-month closure that began in February, when the Food and Drug Administration found traces of a potentially deadly bacteria, raising the possibility that contaminated products from the plant had caused the illness of several infants. The second closure elevated concerns about shortages that continue in many states despite efforts by the Biden administration to ease the crisis with formula supply from Europe, Mexico, Australia and elsewhere.

"The Sturgis factory had produced roughly one-fifth of the infant formula in the U.S. In early June, before Abbott’s most recent plant closure, industry executives said the shortage would persist for several more weeks."