Kraft Foods Group, Inc. ( KRFT ) recently recalled 260 cases of Velveeta original pasteurized recipe cheese product due to the lack of adequate amount of sorbic acid, a preservative, in the product.
Inadequate amounts of preservative in the product may lead to premature spoilage and the consumption of the product may result in food borne illness. These cheese products belong to one particular batch of production and may have been shipped to 12 Midwest states in the U.S. They were not shipped outside the country.
Kraft has always played safe with its food making process and has recalled its products many times in case it had any doubts about the quality of its products.
Last month, the company recalled 1.2 million cases of select cottage cheese products due to potential storage defects. Following the recall, the Tulare, CA facility, which manufactured all these products, has ceased production.
In Apr 2014, the company had recalled 96,000 pounds of wieners under its Oscar Mayer brand due to wrong packaging and undeclared allergen. According to the U.S. Department of Agriculture's Food Safety and Inspection Service (FSIS), the recall was due to wrong packaging and undeclared allergen. Earlier, in Jan 2014, Kraft recalled 1.77 million pounds of Kraft Velveeta Cheesy skilled single - macaroni and cheese products - because of incorrect labeling.
In October, 2013, Kraft Foods voluntarily recalled some varieties of Kraft and Polly-O String Cheese and String Cheese Twists products on concerns that they could degrade before their 'Best When Used by' dates specified on the labels.
The repeated recalls are not good for Kraft's fundamentals as these might hamper its reputation. As it is Kraft has been struggling with a soft top line ever since the split from snack company, Mondelez International, Inc. ( MDLZ ) in 2012 due to broader macro pressures.
Other Stocks to Consider
Kraft Foods Group carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the consumer goods sector include BRF S.A. ( BRFS ) and Inventure Foods, Inc. ( SNAK ). BRF S.A sports a Zacks Rank #1 (Strong Buy) while Inventure Foods carries a Zacks Rank #2 (Buy).
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