A quick scan of FDA’s Recalls, Market Withdrawals, & Safety Alerts is enough to make you put down your lunch. While the majority of incidences tend to include undeclared ingredients, you do not need to look far to find multiple references to listeria, salmonella and E coli.
My colleague recently posted 5 Tips to prepare for a crisis, and while prevention is always the most important step you can take, how you handle a recall could make or break your brand. If not handled properly, you could at best experience a lack of consumer confidence and at worse face criminal prosecution from resulting deaths as families in the egg and cantaloupe industries recently discovered.
The FDA was granted authority for mandatory recalls under new rules in the Food Safety Modernization Act. However, this change was largely symbolic since the food industry traditionally honored voluntary recalls. This week the Center for Science in the Public Interest filed suit against USDA over their handling of salmonella in the meat supply. And as the GAO noted in 2012, communications of recalls does need to improve. How effectively you can reach potentially affected customers is critical in minimizing harm and liability, but also essential in demonstrating your control of the situation.
With auto recalls it typically begins with notifications to dealers, but with food ingredients it becomes vastly more complicated. In recent peanut recalls, the list of products potentially contaminated increased daily. Communicating to manufacturing customers, retail customers, wholesalers, brokers and distributors becomes an important first step in taking control of the situation. With the recent humus recall not only are you dealing with multiple products, but different labels for the same product. Target and Trader Joe’s store brands were included in the recall list placing them in the spotlight rather than the manufacturer. It is not just private label brands at risk today. As Green Giant and other established brands license out their name to varied fruit and vegetable companies and producers, the potential for damage to your brand can be out of your control.
Costs of a Recall
Costs directly relating to the recall and your brand equity are obvious and unavoidable. How much will it cost you to reach all your customers potentially affected? It is not unusual for this to run into the millions of dollars, but it doesn’t have to. Building a database of consumers is a marketing tool you should be employing already. By simply capturing email addresses and zip codes, you can geo target customers with marketing messages, invitations to local events, and if needed, product recall details.
Social media is another marketing tool that can be leveraged in a recall scenario. Chobani did this beautifully in its 2013 recall. By having an engaged audience of product ambassadors, they were able to quickly disseminate information, respond to questions and even have independent allies rise to its defense.
Unfortunately, Chobani seems to be the exception rather than the rule. In a recent report by Kids in Danger that looked at children’s product recalls in 2012 and 2013, in 63 instances when recall information could be communicated through social channels, only nine posts appeared on Facebook and eight tweets through Twitter. It appears to be an extension of the “bunker mentality” that we counsel clients against when in the midst of a crisis. If you are not participating in the communications, you are leaving it to the media and others to frame the discussion and your perception.
It seems like we are hearing about a new food recall almost weekly. If you follow the produce or meat industries it may feel like a nearly daily occurrence. Are we becoming desensitized to recalls? I imagine many brands would welcome that reality, but when it directly impacts you be assured that the recall, along with the company’s response, will stay with you forever. Will you be remembered as a brand that did it right? This will be judged on your response to your immediate customer, the retailer and the end consumer.
Even if you are able to communicate recall information to consumers, their likeliness to act involves a number of factors. The “Awareness Rate” among your constituents is critical. After they receive the message they must internalize and comprehend the instructions, determine if a response is necessary and be willing to take action, whether it is checking a UPC code or remembering where they bought that ground beef.
Recall or Bad Press
Even if you do not need to alert customers to a product contamination, you may just need to tell your side of the story. Is it pink slime or finely textured beef you are selling? Can you help customers identify the difference and empower them to make the choice for themselves? It may be an advocacy group using sensationalist headlines to position the worst examples as the standard for your business or industry. Again, when you do not participate in the discussion you are leaving it to media and competitors to frame the conversation.
You also may find yourself needing to clarify information or assure customers in the midst of a competitor recall. People are unlikely to remember all the details of the latest meat recall. Further, there may not be an identifiable brand, or multiple labels with all of the co-packing and private labels in stores today. Having the ability to reach your customers and the media, directly or online, will reduce your “crisis stress” and minimize a disruption in sales.
During a crisis, you are facing challenges from all directions. Being prepared to communicate quickly and effectively to media, employees, partners and consumers is critical in establishing control of the information flow and your handling of the situation. By working with your marketing and sales teams before the crisis hits, you will best leverage all of your communications channels in the critical first 24 hours.