Menu Foods, the manufacturer of recalled pet foods in 2007, is trying to forget that year as they make a comeback.

It was a year Paul Henderson says he would rather forget.

From the moment he initiated a recall of 60 million cans and pouches of pet food in 2007, the chief executive of Menu Foods Income Fund knew life would never be the same. At least a dozen cats and dogs were dead and Menu’s product was being blamed. The firm was sued. It paid out millions in legal settlements after the problem was traced to a Chinese raw material supplier.

In just a few months, one of the country’s manufacturing success stories became a corporate pariah, its name splashed and sullied all over the news.

Investors left the Streetsville, Ont., company for dead.

But a strange thing has happened since the days of pooch poisoning and souring sales headlines. Mr. Henderson is quietly rebuilding the business. And while some pet food producers are struggling to sell their higher-priced products in a recession, he’s making money again.

This week, Menu reported net income of $4-million on revenue of $66.5-million, marking the first time since 2006 it has posted three consecutive profitable quarters. Its stock, which sank from $7.45 to 61¢, has recovered to $2.30. It’s gained 72% in the last six months.

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So how did Mr. Henderson, the proud owner of a Portuguese water dog and miniature poodle, stave off Menu’s collapse?

He and other senior executives took a pay cut of between 17% and 22%. They trimmed staff and costs to match their new volumes. They solved the supplier problem. They kept their lenders, who had witnessed Menu solve a major financial crisis years before when it couldn’t get its products across the Canada-U.S. border during the mad cow disease scare, on side. They worked to repair their reputation and re-establish relationships with existing customers. And they lured new ones by developing products no one else has.

Menu’s contract manufacturing work is now targeted at many of the smaller producers, many of whom do not have the capability to manufacture pet food themselves.

But the major change in its revenue stream has come from the increase in selling premium wet pet food to stores directly, which then sell it under their own private label brands for less than brand-name food.

Menu says it supplies most if not all of the private label wet pet food sold by 30 of the top 40 North American pet pet food retailers. It has three factories located in Emporia, KS, Pennsauken, N.J., and Streetsville filling orders for supermarkets and other clients across the continent.

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“It’s a memory I’d just as soon put behind me,” he said of the events of 2007. “There’s nothing we can do about it at this point other than learn from it and move on.”

Read the rest of A year to forget at Menu Foods at Canada.com.

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