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Precautionary recalls come and go and this kind of nightmarish scenario is rare. But like a plane crash, the looming possibility of such a crisis is the major motivating force behind the stringent process controls and quality assurance procedures that reputable food companies follow. In the unlikely event that such a crisis does occur, many companies have elaborate plans and preparations for handling recalls, litigation, and media scrutiny.
Most crisis management planning revolves around this type of situation: tainted food causes death and sickness, it’s linked somehow to your company, so you deal with it well or risk the death of your business. The lesson has been clearly illustrated more than once in the recent past. However, as food becomes increasingly politicized, developing crisis management plans for these scenarios alone is not enough.
“We are increasingly seeing softer issues such as pricing having the potential to become a crisis,” states David Brotzen, director of issues and crisis management for Hill and Knowlton, Europe. Unforeseen wild swings in pricing can put tremendous pressure on companies, especially during the current period of extended low inflation. This has been seen in coffee and other products grown only in specific parts of the globe. Weather, political instability, and transportation disruptions can affect supply overnight. Not only do these crises affect production, they can create public relations problems as well. Consumers often don’t understand why their favorite brand costs 50% more, seemingly overnight. If they switch to an alternative, you may never get them back.
Crises can come in the form of extortion or bomb threats, Brotzen warns. Economic terrorism is extremely rare in the U.S., but not in many other parts of the world. Such crises may seem more like a story line for a Bruce Willis film, but in a global market, they can and do occur. In England, the so-called Mardi Gras bomber, Edgar Pierce, was sentenced to 21 years in jail last year for using homemade devices to try to extort money from Barclays and Sainsbury, a retail food chain that also owns Shaw’s supermarkets in the U.S.
Other political crises, such as the current concerns by the Physicians Committee for Responsible Nutrition, an activist organization that tried to get an injunction to block the new USDA dietary guidelines until the document listed nondairy sources of calcium. The PCRN claimed that the government dietary plan was racist. According to the group, the plan emphasizes dairy products while a significant proportion of African-Americans, Hispanics, and Asian Americans are lactose intolerant. The rhetoric may qualify as a crisis, because it’s difficult to clarify the real issues.
According to Jonathan Hemus, director of Reflex, the crisis management division of U.K.-based Countrywide Porter Novelli, “Almost three-quarters of the work we do is in the preparation stage rather than the fire-fighting. Almost all the food clients buying into Reflex are assessing risks. We’re going in and methodically pulling the business apart and identifying risks and how likely they are to hit, and the effects if they did.”
Part of the process involves an understanding of how extortion works. Typically it falls into one of four categories, according to Reflex briefing materials:
1. For a cause. Political, consumer terrorism, pressure groups looking for publicity.
2. Malicious. Motivated by revenge, imagined slight, copycat crimes, disgruntled employees.
3. Unknown. No obvious motive, unpredictable and rare, such as the Tylenol case.
4. Criminal. Extortion for profit, publicity may be threatened but is not actually sought.
Passively aiding and abetting this kind of crisis is the Internet. “While it offers unrivaled access to information for millions, it can also pose a deadly threat to a company’s reputation. The danger comes from the fact that the Internet is unregulated, allowing individuals and pressure groups to wage campaigns, no matter how inaccurate. Damaging information can appear on any site, ranging from mainstream news and discussion groups to bizarre joke pages,” Hemus warns.
This weapon cuts both ways, however. The Internet is a powerful tool for public relations. Companies can use their web site, broadcast e-mail, and “black sites”—registered domains used exclusively to distribute information when needed—to rapidly respond to potentially damaging information.
“An Internet site, used in a crisis, can carry key information to all interested parties, answering the concerns of stakeholders,” according to a Reflex bulletin. The site can also carry hot links to governmental and other related agencies.
The world is changing, and with it the potential crises that face food companies. The best defense is to minimize risk through policies and procedures that recognize every possible approach—food borne or otherwise. In addition, it pays to have a crisis plan in place that includes simulated crisis exercises at all levels of management. Real cameras, real questions, and a real response will better prepare your executive team for the real thing. Preplanned public relations scripts, decision trees already formulated, tasks delegated — all make the difference when a crisis hits. A crisis happens with such unexpected speed that thick manuals and overly complicated procedures are ignored. Only plans that are simple, rehearsed, prepared, and intuitive will work should the unthinkable occur. There’s no time after the fact.
by PIERCE HOLLINGSWORTH