Commitments and Contingencies

6 Months Ended

Jun. 29, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies [Text Block]

13. Commitments and Contingencies

Legal Proceedings

Various current and potential claims and litigation arising in the ordinary course of business are pending against the Company. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable that may be incurred in connection with any such currently pending matter. In the Company's opinion, the eventual resolution of such matters, either individually or in the aggregate, is not expected to have a material impact on the Company's financial position, results of operations, or cash flows. However, litigation is inherently unpredictable and resolutions or dispositions of claims or lawsuits by settlement or otherwise could have an adverse impact on the Company's financial position, results of operations, and cash flows for the reporting period in which any such resolution or disposition occurs.

Product Withdrawal

In the second quarter of 2024, the Company conducted a voluntary withdrawal from customers of certain batches of aseptically-packaged products that may have the potential for non-pathogenic microbial contamination. None of the withdrawn product made it into the consumer marketplace. For the second quarter of 2024, the Company recognized direct costs related to the withdrawal of $2.1 million, net of expected insurance recoveries, in cost of goods sold in the consolidated statement of operations. The Company is seeking to recover a portion of the withdrawal-related costs through its insurance coverage, and such recoveries are recorded in the period in which the recoveries are determined to be probable of realization. As at June 29, 2024, the Company has recognized expected insurance recoveries related to the withdrawal of $6.9 million, which amount is included in prepaid expenses and other current assets on the consolidated balance sheet. The Company expects to incur additional costs related to the withdrawal in the third quarter of 2024, including product warehousing and destruction costs.

Product Recall

On June 21, 2023, the Company announced its subsidiary, Sunrise Growers Inc., had issued a voluntary recall of specific frozen fruit products linked to pineapple provided by a third-party supplier due to possible contamination by Listeria monocytogenes. Sunrise Growers Inc. is a component of the operations of Frozen Fruit. In connection with the divestiture of Frozen Fruit, the recall-related costs and estimated insurance recoveries are included in the loss from discontinued operations in the consolidated statements of operations. There were no significant direct costs associated with the recall recognized in the first two quarters of 2024, and any additional costs are expected to be minimal. As at June 29, 2024 and December 30, 2023, estimated insurance recoveries of $1.4 million and $4.8 million, respectively, are included in prepaid expenses and other current assets on the consolidated balance sheet.