The March 5th issue of Brandweek features the following article by Sonia Reyes and includes comments from DPK Public Relations'' Dan Keeney (see the original article here):
Harvest of Fear
March 05, 2007
By Sonia ReyesOn Sept. 12, 2006, Robyn Allgood, a young mother living in Chubbuck, Idaho, about 150 miles north of Salt Lake City, handed a smoothie to her 2-year-old son, Kyle. Allgood had been having a tough time getting the toddler to eat vegetables, and had earlier struck on the idea of blending greens and fruits together into a shake, which both her children ended up liking. Allgood obviously saw no reason to doubt the safety of the spinach in the bag she tore open that afternoon. After all, it had been washed and prepacked. When the boy developed severe diarrhea three days later, "We just thought it was a normal type of flu," the elder Allgood later told the local media. But it wasn''t just a "normal" flu. It was the early stages of kidney failure brought on by E. coli, a deadly bacteria later found in the spinach Allgood had eaten. On Sept. 20, Kyle Allgood died.Stories of foodborne illnesses surface in the news from time to time, but late last year, the Allgood tragedy was the start of something big. The contaminated spinach—some of it sold under the Dole label—would claim three other lives. It would also sicken 183 people, 27 of them contracting hemolytic uremic syndrome, which can lead to the kind of kidney failure that killed young Allgood. Three months later, 44-year-old Michael Notar also contracted the E. coli bacteria following lunch at a Taco Bell. The contamination—which showed up in restaurants in New Jersey, New York and Pennsylvania—was initially thought to be in scallions; it was later traced to lettuce. Notar survived, and 71 others in five mid-Atlantic states ended up in the ER. These two incidents came amidst a Food & Drug Administration investigation that had begun in August after salmonella turned up in a shipment of tomatoes from Virginia. That shipment would sicken 180 people.The Centers for Disease Control and Prevention estimates that foodborne illnesses sicken some 76 million people each year. Roughly 300,000 of them will end up in hospitals; 5,000 of those will not return home. The number of produce-related illness outbreaks has more than doubled between 1999 and 2004—rising from 40 reported cases to 86, according to consumer-advocacy group the Center for Science in the Public Interest. It falls to the FDA to regulate produce consumed by the public, and Dr. David Acheson, director of the Food Safety Security Staff, is concerned. While it is "unrealistic that foodborne illnesses will be reduced to zero, our goal is to minimize and reduce outbreaks," he said. What about the recent incidents of contaminated fruits and vegetables? "Produce," he said, "is a big priority for us."Behind the headlines, however, and apart from consumer fears over the issue, there''s the roller-coaster ride that awaits any food brand whose products are caught up—justifiably or not—in a foodborne illness outbreak. Those who''ve taken a public beating recently include Peter Pan (ConAgra), Taco Bell, Oscar Mayer and Dole. The spinach scare in particular would implicate brands earlier up the supply chain, including Natural Selection Foods, the San Juan Bautista, Calif., outfit that sources and bags some of Dole''s greens.The public floggings have not stopped there. ConAgra came under the crosshairs just last month following a salmonella outbreak traced to peanuts in its popular Peter Pan peanut butter. And the recent salmonella outbreak has since skipped across the produce aisle to turn up in mushrooms and cantaloupes, too, threatening to drag more companies into the morass of public fear and avoidance."Outbreaks like these can leave a permanent scar and weaken a brand''s equity," said Simon Williams, president of Sterling Group, a New York City-based brand strategy/design firm. "Consumers are informed, connected and savvy. If you screw up once and you don''t handle it right, there are a gazillion other brands to choose from. The days of brand loyalty are over."Outbreaks also leave a scar on the bottom line. The lettuce debacle cost Taco Bell parent Yum! Brands $20 million in its fourth quarter. During the same period, sales of spinach wilted, too—down 9.5% to $146 million for Q4 2006 versus double-digit growth of 16.5% to $161 million the previous year, per ACNielsen.Of course, in the face of an emergency, produce makers and other food brands usually do their best to take corrective measures on safety and then fire up their marketing to control the damage. Many brands, however, are still left to grapple with some serious questions. Was their best marketing defense enough to protect their brands'' integrity? What lessons can these incidents teach other food brands? According some some industry watchers, food companies could and should be doing a much better job of using marketing to protect their brand images.Even if a food company says it''s not concerned about these public relations risks, there''s one question that no brand can ignore: Will the public hysteria that these food-safety incidents have whipped up lead to a legislative crackdown on food brands and new waves of federal regulation? The drum beat of war already is echoing down the Capitol''s marble corridors as consumer-advocacy groups increasingly bend the ears of legislators. Not only may the FDA''s and USDA''s powers of oversight increase, there''s talk of creating a whole new mega-agency to police the procedures up and down the food chain.Damage ControlIf marketers at companies that sell or serve produce have felt a chilly breeze through their corporate corridors lately, it''s not their imagination. Following the tainted-spinach outbreak in September, consumer concern about the safety of produce in general shot up to an all-time high, according to an NPD Group survey. It found that a whopping 88% of consumers were both aware and concerned about E. coli, while only 11% reported they were aware but not concerned. Only 1% reported they were not aware of the issue.To be sure, problematic food outbreaks are hardly new. Even today, many consumers still recall notorious incidents like the 1993 deaths of four children who''d eaten contaminated hamburgers at Jack-in-the-Box, and 1997''s Hudson Beef recall, in which 20,000 lbs. of frozen hamburger meat (some shipped to Burger King) contained E. coli.Just last month, authorities traced a strain of salmonella that had sickened some 329 people in 41 states—sending 51 to hospitals—to Peter Pan peanut butter, which is made by food giant ConAgra. On Feb. 14, ConAgra recalled all jars bearing the Peter Pan and Great Value (distributed to Wal-Mart stores) labels produced at its Sylvester, Ga., plant going back to May 2006 (see sidebar, above). "We are still focused on working with the FDA to find out how the outbreak occurred and then what steps we have to take to ensure the safety of our product before reintroducing it back to market," said ConAgra rep Stephanie Childs.On Feb. 18, Kraft Foods supplier Carolina Culinary Foods recalled the Oscar Mayer/Louis Rich Chicken Breast Strips after Listeria—a rare pathogen that can nonetheless be fatal—turned up in a routine screening. Erring on the side of caution, Kraft instituted a Feb. 23 recall of all nine varieties.Thus far, it looks like nobody has fallen ill in the wake of these recent incidents. In contrast, the Dole/spinach and the Taco Bell/lettuce scares turned into national news events. Both are examples of just how seriously a food-safety incident can imperil a brand overnight, yet both provide notable case studies in marketing-driven responses.Dole Foods knew last September that, as soon as the FDA fingered Natural Selection Foods as the source of the bagged spinach that caused the E. coli outbreak, it had a serious problem on its hands. Natural Selection is a "co-packer" that sources and packages branded salads for better known companies such as Dole, Ready Vac and numerous retail chains.Dole responded by recalling all fresh spinach, giving specific directions on its Web site. The company''s tone was contrite; Dole was "saddened" by the incidents and expressed "deepest sympathies to those affected." Dole also ran a full-page ad, via Dailey & Associates, West Hollywood, Calif., in Parade magazine. It was an open letter from CEO David Murdock, reassuring consumers of the "company''s commitment to quality and safety," and included a cents-off coupon for good measure. "We ran the ad to tell folks that we take food safety seriously," said Marty Ordman, vp-marketing at Dole. Meanwhile, Dole hired extra reps to man its toll-free phone lines.Dole shook up its sourcing chain, electing to move away from co-packers like Natural Selection Foods and source, pack and bag greens on its own. With food safety so dependent on the supply side of the equation, those brands that source and packaged their own foods from field to store will have better control over the food''s integrity (see chart, page 37). A key component of the Dole strategy was to supplant the faultfinding by casting itself as a food-safety educator. A Dole Web site page, called "Field to Store," escorted consumers through the various stages of its bagged salad business (that didn''t happen to involve spinach preparation) along with pictures of facilities and farm fields. Dole also distributed food-safety leaflets to stores.Taco Bell took a similar multitiered approach. After immediately shuttering suspected restaurants, the company took out ads, developed with Draft FCB, Chicago, in major newspapers. In an open letter to consumers from the CEO, headlined "Taco Bell Food is Safe," the company summed up the corrective actions it was taking—which would come to include "testing water and soil, the use of compost and fencing of fields, as well as increasing testing in the field before harvest," according to company rep Rob Poetsch. Meanwhile, the company''s Web site informed the public that the chain had changed suppliers for all of its produce and, by Dec. 14, had received an "all clear" from the FDA.Judging from early evidence, the road back for both brands will be a slow one. In the case of Taco Bell, said RBC Capital analyst Larry Miller, so-called hard-core users of the brand are not the demographic whose loyalty must be won back. "The key is luring the occasional consumer back into the restaurant," he said, "which has been difficult thus far." It''s a similar situation at Dole. Marketing vp Ordman related that even while customers "are coming back slow, some folks are understandably concerned."Here Comes the LawThe largest consequences for food brands caught up in these incidents may not come from public mistrust or from their accounting offices, but from Washington. The recent outbreaks have spurred calls to overhaul regulations on a national scale—in other words, get the Feds in on things. Change is in the air already: The FDA will hold the first public meeting since the outbreaks later this month in California between industry growers and consumer-advocacy group. Another hearing is slated in Washington in April, according to an FDA rep.One major issue is regulatory jurisdiction. The FDA governs food-safety compliance at produce processing plants, but it does not have oversight of the farm fields. Because recent outbreaks have pointed to the growing fields as the genesis of the problem, many feel that the FDA''s authority should be expanded to include it. Thus far, the industry has relied on—and wants to preserve—self-regulation. But it''s in for a fight on that front."The industry thinks it can rely on self-regulation," said Caroline Smith DeWaal, CSPI food-safety director. "But it''s time for the FDA to implement programs to prevent what happened this fall with spinach, instead of rushing in after the fact to alert people to avoid a hazardous product." In November, CSPI petitioned the FDA to regulate the food-products industry with mandatory standards concerning manure, farm sanitation and water."There''s no other solution but [to give] the FDA greater jurisdiction," added Sanford Miller, a former director of the FDA''s Center for Food Safety and Applied Nutrition and now senior fellow at the University of Maryland. "There''s too much confusion, which is time-consuming. The more time, the more people get sick and panic."A growing number of elected officials agree with him. "These latest incidents illustrate that we need to do more to reduce the risk of food-borne illness in our country," wrote Sens. Hillary Clinton of New York and Robert Menendez of New Jersey, among others, in a recent letter to several U.S. regulatory agencies, including the FDA. For his part, U.S. Sen. Charles Schumer has said he will push to improve FDA oversight too.Some, however, would take regulation a step further—beyond the FDA, in fact. Sen. Richard Durbin and Rep. Rosa DeLauro last month introduced the Safe Food Act, a bill that would establish a single food agency with enhanced powers. "The health and well-being of American consumers is too important to allow the status quo to continue; a patchwork of 15 agencies administering at least 30 laws, all having some piece of the regulation of food safety," said Sally Greenberg, senior counsel at the Consumers Union, which supports the notion of one over-arching agency. "One food agency with strong powers would be better positioned to prevent problems like the recent salmonella outbreak in peanut butter."Many food brands, not surprisingly, do not take kindly to the notion of further regulation. But, in the face of growing pressure for regulatory reform, produce farms, food processors and distributors have created the Leafy Green Marketing Agreement. It''s a set of best-practices standards applied to farming fortified with a trace-back system to verify safe growing and handling processes. "In real life, if you''re not squared away in the food safety arena, no one will buy your produce," said Tim Chelling, a rep at the California-based Western Growers Assn., which crafted the agreement.A Marketing Post-MortemAs these battles heat up in the nation''s capital, there''s still the matter of how the affected brands reacted; whether their actions were appropriate and, more importantly, what might they do better going forward?In the view of Sterling Group''s Williams, both Dole and Taco Bell''s responses to the emergencies were "less than perfect." For one thing, he noted, Dole''s open letter published in Parade failed to express any sympathy or compassion for the victims and their families. The ad from Dole''s CEO, Williams said, relied on corporate lingo like you''d find in any press release. "They could learn from JetBlue''s response recently," Williams said, referring to the systemwide delays of late February that stranded thousands of customers in airports. "The CEO made an honest, sincere direct statement showing that the only relationship that should matter is the one between the brand and its customer."On the other hand, Williams lauds Dole''s efforts at gaining more control over its brand by discontinuing its relationship with supplier Natural Selection Foods. But Dole, he said, needs to better communicate what actions it has taken in the aftermath of the outbreaks with its customers.Which is something that, by contrast, Taco Bell did well in its print and TV ads. "There has to be a delicate balance between focusing on the crisis versus how high-quality and safe your brand is," said James Gregory, CEO at brand consultancy Core Brands in New York.Taco Bell''s response was laudable because the company outlined and took key points of action that, according to Daniel Keeney, president of DPK Public Relations, Houston, spoke directly to what consumers needed to hear. "This is what went wrong. This is how we''re fixing it and this is why you should trust the safety of our brand," said Keeney.The response began with notifying health officials and closing restaurants when the outbreak was first announced. And it continues to the present time; Taco Bell has promised it will "actively support an industry coalition of government regulators, competitors, suppliers and other experts to develop improved guidelines and procedures."Yet the chain''s model-student behavior was nowhere to be seen in Manhattan two weeks ago when a local news station went on the air with stomach-turning footage of rats scurrying around the floor of a local store."Scurrying Rats Take Over NYC KFC-Taco Bell Restaurant," blared the subsequent Reuters story headline. But what would once have been a containable local story morphed, thanks to the Internet, into a global one after the footage turned up on YouTube. This time, Williams said, Taco Bell dropped the ball because it was too slow to recognize that this was more than a local story."They have some work to do. Closing the store is not enough, especially since people have incredible memories about brands," said Williams. "Be it rats, spinach, lettuce or airplanes, it''s how the brand responds that''s important."The subsequent statement from Yum! headquarters called the debacle an "isolated incident at a single restaurant" and went on to blame construction going on in the basement for stirring up the rodents.According to Howard Rubenstein, president of crisis-management firm Rubenstein & Associates, New York, a key factor in whether or not a corporate response will resonate with consumers is whether the statement identifies with how the consumers feel."The public is quick to forgive a company if it is apologetic and sides with the customer," Rubenstein said. "While Dole and Taco Bell just got by, JetBlue wins the day with its quick heartfelt response that included the ''Passenger Bill of Rights'' and acknowledging it had management problems."Check the LabelDamage control is one thing. But it''s increasingly clear that these incidents are rewriting the rulebook for direct-appeal marketing, too.As brands attempt to find customers among an increasingly anxious public, new kinds of messages may be needed. Already, the public''s concerns about food safety have spurred changes in packaging language. A November report by Mintel, Chicago, noted that consumer concern over the safety of the food supply is showing up in many ways, including a "preference for products assuring higher quality in label and health claims such as "organic, "kosher or "hormone-free." The report also asserted that food safety awareness is filtering into other assurances of quality or "indicators of safety . . . like freshness indicators on pack."Brand labels have always employed certain terms to trigger various favorable responses in consumers; now, however, a standby like "fresh" could well be used to send the message: "Hey, this food is safe.""''Fresh'' and ''natural'' are code words in advertising that connote straight from the farm to the table," said Marcia Mogelonsky, a Mintel analyst.And today''s consumers, concerned about food safety, seem very receptive to those messages. For example, in new ads via Blum Enterprise, Winter Park, Fla., for the casual-dining restaurant chain Ruby Tuesday, the freshness theme appears no fewer than four times in the spot, including the "Simple. Fresh. American Dining" tagline.Chicken producer Bell & Evans in Fredericksburg, Pa., has taken to reassuring consumers of its high food-safety standards via print ads. These declare, among other things, that a "Bell & Evans chicken is air-chilled and contains no chlorinated water." The ad also touts that the company does not feed arsenic to its chickens (an age-old practice that kills bodily parasites) and refers to the brand as the "most innovative producer of fresh and prepared, all-natural . . . chickens."The natural-and-safe positioning is something the company leverages to stand out from other poultry processors. "It''s our point of differentiation," said Tom Stone, director of marketing at Bell & Evans. "The consumer pull-through is great." Ad agency Allebach in Souderton, Pa., handles creative.Indeed, consumer concerns for "freshness" were crystallized in a Dupont survey in October 2005 which showed that 72% of consumers were willing to pay more for improved packaging even as they ranked "freshness" as the most important factor in purchase decisions before pricing.The response can only be imagined, then, had the survey questioned consumers about how much they''d be willing to pay to avoid getting E. coli.