Once Upon a Farm Recalls Tractor Wheels After Choking Reports Hit 18% of Sales

Key Points

• Once Upon a Farm recalled its entire Tractor Wheels product line after three reported choking incidents, including one complaint from a parent and two reports disclosed by the FDA. The company said no injuries have been reported and that the root cause remains under investigation.
• Tractor Wheels accounted for approximately 18% of year-to-date net sales, and the recall is expected to affect revenue until shipments resume. The company is still assessing recall-related costs and potential insurance recoveries.
• Once Upon a Farm said it has contacted consumers, retailers, distributors and regulators, while retaining a third party to evaluate the products. It ended the third quarter with $106.4 million in cash, no debt and up to $95 million available through credit facilities.

Once Upon A Farm NYSE: OFRM said it has voluntarily recalled its entire Tractor Wheels product line after receiving reports of choking incidents, including one complaint submitted by a parent and two additional reports the U.S. Food and Drug Administration disclosed to the company.

Chief Executive Officer John Foraker said the company is not aware of any injuries related to the incidents. However, he said the reports prompted an immediate investigation and a broad recall of all Tractor Wheels flavors and SKUs because the company did not yet have clarity regarding the potentially affected flavors or production lots.

Company Investigating Potential Cause

Foraker said Once Upon a Farm initially received a single complaint from a parent regarding a choking incident involving a Tractor Wheels product. The company sought additional details, including the lot code and flavor, while reviewing complaint files for similar reports and consulting third-party experts about a physical-hazard assessment.

After obtaining lot-code information from the consumer, the company began an investigation involving its manufacturer to examine potential production or supplier non-conformities. The FDA then informed Once Upon a Farm on Thursday afternoon that it had received three choking-incident reports, including the parent’s complaint and two reports submitted directly to the agency.

“Our investigation has not yet identified a root cause that we can link directly to these reports,” Foraker said. The company reviewed ingredient inputs, manufacturing practices, quality specifications, production records and retained product samples as it sought to determine how the products could present a choking hazard.

Given the new FDA information and uncertainty over the scope of the affected products, the company decided to recall the full Tractor Wheels line, according to Foraker.

Retailers, Consumers and Regulators Contacted

Once Upon a Farm said it began communicating with consumers immediately after its recall announcement was issued Friday evening. The company is using social media, email, its e-commerce site and marketing partners to provide recall information. It also said it is adding temporary consumer-relations staff and has posted a question-and-answer resource on its website.

The company said it has worked with retailers and distributors on store-level product pulls, distribution-center holds and removal of online listings. It provided email communications, in-store notices, call scripts and a hotline number for inquiries.

Foraker said the company is working closely with the FDA to remove affected products and provide families with information about the recall. He added that retailers have expressed support and expect to return Tractor Wheels products to shelves once the matter is resolved.

Sales Exposure and Financial Position

Tractor Wheels products represented approximately 18% of Once Upon a Farm’s total net sales year to date, Foraker said. The company expects the absence of the products from the market to affect sales until shipments resume.

The company is assessing the recall’s financial impact, including costs related to products, retailers and recall activities. It said it was too early to provide a reliable estimate of total costs or any potential insurance recoveries.

• Once Upon a Farm ended the third quarter with $106.4 million in cash and no debt.
• The company also has up to $95 million available under existing credit facilities, subject to their terms.
• It is evaluating potential recovery under recall insurance coverage and coordinating with its manufacturing partner regarding any applicable coverage.

The company has engaged a third party to assess the recalled products and will evaluate its options based on the findings. At the same time, it is preparing production plans intended to support a return to shelves once the review is completed and any necessary safety-related changes have been implemented and validated.

Foraker said the company expects the recall to be a challenging period but believes it has the financial flexibility to manage through it. Once Upon a Farm said it plans to provide further updates when it reports third-quarter results after the market closes on Nov. 12.

About Once Upon A Farm (NYSE:OFRM)

Once Upon a Farm is a U.S.-based food company focused on organic, refrigerated foods for babies, children and families. Its products are designed around fruits, vegetables and other minimally processed ingredients.

The company's offerings have included refrigerated baby food pouches, toddler meals, kids' snacks, smoothies and other family-oriented products. Once Upon a Farm distributes its products through grocery retailers, mass merchants and online channels in the United States.

The company was founded in 2015 by Cassandra Curtis, Ari Raz and John Foraker, with actress and entrepreneur Jennifer Garner joining as a co-founder and brand partner.

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