Jif Recall May Cost Manufacturer $125M Over Peanut Butter Salmonella Poisoning Risk

Unsaleable inventory, manufacturing disruptions and customer returns over the peanut butter salmonella poisoning risks have cut into the company’s revenues, according to a financial report.

While a growing number of Jif recall lawsuits continue to be filed by consumers who developed salmonella poisoning after eating tainted peanut butter products, J.M. Smucker Company has already reported it will likely suffer financial losses of at least $125 million in the coming months stemming from the massive recall.

J.M. Smucker Company first announced the Jif recall on May 20, after it was discovered that a variety of peanut butter products were tainted with salmonella.

At that time, the manufacturer was aware of at least 16 food poisoning cases across 12 states, including two infections that were severe enough to require hospitalization. However, the number of recalled products has continued to expand, as has the number of individuals left with salmonella poisoning.

In a statement (PDF) released this week for the company’s quarterly earnings results, J.M. Smucker indicates that it expects losses of approximately $125 million over the next four quarters, after receiving anticipated insurance payments. However, the estimate appears to only include Jif recall costs associated with manufacturing downtime, returned products and unsellable peanut butter, as the company makes no mention of the potential salmonella poisoning settlements it may end up paying to consumers nationwide.

Since the original recall for Jif-branded peanut butter products, dozens of additional brands containing the potentially contaminated peanut butter have been recalled including Coblentz Chocolate Company recall,  Mary’s Harvest Fresh Foods Inc. recall, Garden Cut, Country Fresh, Taher, Fresh Del Monte and Wawa.

According to the report, Smucker Co. indicates the impact of manufacturing downtime, customer returns, and unsaleable inventory related to the Jif peanut butter recalls has caused a 10% decline in adjusted gross profit as of April 30, 2022, accounting for approximately $71.8 million. The losses include a 7% decline caused directly by unsalable inventory and estimated customer returns related to the Jif peanut butter recall.

Although the report states Smucker’s reported $8 billion in revenue in its 2022 fiscal year, with net sales expected to increase 3.5 to 4.5 percent compared to the prior year, the report indicates Smucker Co. stands to lose approximately $125 million from increased operating expenses associated with the Jif salmonella recall and disruptions in the manufacturing process.

Jif Peanut Butter Lawsuit Costs

The report does not address liability and financial losses that could be accumulated from legal fees or damages awarded to plaintiffs in a growing number of Jif peanut butter lawsuits and class actions lawsuits being filed.

Since the recall, multiple food poisoning lawsuits against Smucker Co have been filed, alleging the manufacturer knew or should have known that the final peanut butter products for sale to consumers were contaminated, and failed to put proper testing measures in place to ensure public safety.

Complaints have further asserted that Smucker’s falsely labels and advertised its Jif peanut butter products, stating the company falsely promotes its ingredients are safe for human consumption and safe for use when, in fact, they contain Salmonella bacteria that can cause gastrointestinal illnesses and other adverse health effects.

Salmonella food poisoning can cause serious and sometimes fatal infections in young children and elderly people, or those with weakened immune systems. Symptoms of salmonella infection include fever, diarrhea, nausea, vomiting, and abdominal pain.

In some cases, the bacteria can travel into the bloodstream and lead to more severe illness such as aneurysm, endocarditis, and arthritis. Healthy people generally recover from Salmonella infections in about seven to 10 days.