Following the "unburned" Zhong Xuegao, the "Rolls-Royce" Häagen-Dazs of the ice cream industry has stood on the cusp of the storm.
Recently, Taiwan's Food and Drug Administration released a list of unqualified food for border inspection, in which two batches of Haagen-Dazs vanilla ice cream exported from France were detected with pesticide residues, specifically the toxic ingredient "ethylene oxide", and the importer was Taiwan General Mill Co., Ltd. In response, General Mills China responded that neither of the two batches was sold in Chinese mainland.
Sitting on haagen-Dazs, Wan Chai Pier, Hulk and other well-known brands, GM Mills recently announced the results of the fourth fiscal quarter ended May 29, 2022, achieving operating income of $4.89 billion, an increase of 8% year-on-year, and net profit of $823 million, an increase of 97% year-on-year, exceeding market expectations. The performance is good, and the general mill share price is also moving strongly, hitting a record high of $76.73 per share.
Häagen-Dazs was detected with ethylene oxide
According to the information released by the Food and Drug Administration of Taiwan on June 21, 2022, the product detected to contain ethylene oxide was Haagen-Dazs vanilla ice cream, the importer was Taiwan General Mill Co., Ltd., and the reason for the non-conformity was "ethylene oxide 0.071ppm, 0.072ppm" (ethylene oxide is ethylene oxide) (ethylene oxide is ethylene oxide) (ethylene oxide is ethylene oxide) and the disposal situation is "the goods in the case are not returned or destroyed in accordance with the regulations".
In response to the above incident, Häagen-Dazs has made it clear that the two batches of products detected for ethylene oxide this time are vanilla pint ice cream (effective date is April 13, 2023) and vanilla barrel ice cream (effective date is October 26, 2022), and said that it has done urgent treatment at the first time, calling on people who have purchased the relevant batch number after April 26 this year to hold the purchase certificate to the original channel for refund, and the refund period is until August 31 this year.
At present, most of the Häagen-Dazs ice cream sold through various channels in China originates in France. In this regard, General Mills China solemnly stated that the two batches of products involved in the import of Taiwan were not sold in Chinese mainland. At present Chinese mainland all imported Haagen-Dazs products in the market circulation channels have passed the inspection and quarantine in line with national standards at the time of entry customs clearance, and hold a valid inspection and quarantine certificate.
Ethylene oxide food safety issues are frequent
What is ethylene oxide?
According to the data, ethylene oxide is a highly efficient fungicide, which can kill various microorganisms at room temperature, and is widely used in washing, pharmaceutical, printing and dyeing industries, but because the sterilized product usually has residues and cannot be used for food sterilization, the mainland clearly stipulates in the "Disinfection Technical Specifications" (2002 edition) that ethylene oxide is not suitable for sterilization of food. It is reported that ethylene oxide has a certain degree of toxicity, and the lethal dose (LD50) of animals through the mouth is about 72 to 270 mg per kilogram of body weight, which is moderately toxic according to the acute toxicity grading standard. In 2017, in the preliminary collation of the list of carcinogens published by the International Agency for Research on Cancer of the World Health Organization, ethylene oxide was listed in the list of class I carcinogens.
In recent years, ethylene oxide has been detected many times in food, including many expensive high-end products, which is a wake-up call for food safety. In 2020, Europe found that the residue of ethylene oxide in Indian sesame seeds exceeded the standard, such as bread, sauce or other sesame-containing foods, triggering large-scale product recycling and removal from shelves; In July last year, according to Spanish media sources, at least 46 kinds of ice cream under the brands such as Nestlé and Milka produced by Froneri were recalled due to the containment of ethylene oxide, which may cause cancer; In December last year, the Centre for Food Safety of the Food and Environmental Hygiene Department of Hong Kong advised the public not to consume six types of "GODIVIA" ice cream imported from France because the stabilizer used in the relevant products was found to contain ethylene oxide, a harmful agent banned from the European Union, and Godiva is known as the "Rolls-Royce of the Chocolate World".
Industry insiders say that raw material contamination and packaging material contamination or the main cause of ethylene oxide in food. Because low concentrations of ethylene oxide cannot be distinguished by sight and smell, it is difficult for food companies to control raw materials containing ethylene oxide through conventional means.
Chinese food industry analyst Zhu Danpeng told the Securities Times e company reporter that food safety has risen to a national strategy, and with the improvement of the quality of life of the people, the importance of food safety is also continuing to increase, and any brand food safety problems may form a brand crisis to a certain extent.
General Mills shares hit new highs
Häagen-Dazs' food safety concerns do not appear to have affected the share price performance of its parent company, GIS.US. Since mid-June, General Mills has continued to rise and recently hit a record high of $76.73 per share. As of press time, the company's stock price is $76.22 per share.
As the world's sixth-largest food company, General Mills is home to more than 100 well-known brands such as Haagen-Dazs, Wan Chai Pier, Guoduo, Hulk, Betty Kitchen and Victorian, and many brands are the top and runners in the market segment, including breakfast cereals, frozen vegetables, high-end ice cream, snack food, handmade dumplings, organic food, etc.
GM Mills started its domestic business in the early 1990s and currently has four modern production bases in China, located in Sanhe, Shanghai, Guangzhou and Nanjing, Hebei Province, and three central kitchens in Shanghai, Tianjin and Guangzhou. In 1996, Häagen-Dazs opened its first ice cream dessert house in Shanghai, setting off a boom in high-end ice cream consumption in China, and then began to expand, with more than 400 Häagen-Dazs stores so far.
Through the acquisition and expansion of small brands and the stripping of weak brands, General Mills has continuously consolidated the moat of competition and maintained steady growth under the impact of the epidemic. At the end of June, the company announced the results of the fiscal fourth quarter and fiscal year 2022 ended May 29, and achieved revenue of $4.891 billion in the fourth fiscal quarter, an increase of 8% year-on-year; Net profit was $823 million, up 97% year-over-year; Full-year revenue of $19 billion, up 5% year-on-year; Net profit was $2.7 billion, up 16% year-over-year. General Mills expects costs to rise at a double-digit rate next year, and the company plans to continue raising prices to protect profits in the face of persistent inflation. For organic sales for the next fiscal year, the Company expects to grow by 4%-5%, while adjusted earnings per share will grow by 0%-3% at constant exchange rates.