Crisis Management in the Food and Drinks Industry

Second edition

Crisis Management in the Food and Drinks Industry

A practical approach
Second Edition

Colin Doeg

Library of Congress Cataloging-in-Publication Data Doeg, Colin. Crisis management in the food and drinks industry : a practical approach / by Colin Doeg.2nd ed. p. cm. Includes bibliographical references and index. ISBN 0-387-23382-2 1. Food industry and tradeManagement. 2. Beverage industryManagement. 3. Crisis management. I. Title. HD9000.5.D597 2005 664 .0068 4dc22 2004065092

A C.I.P. Catalogue record for this book is available from the Library of Congress. ISBN 0-387-23382-2
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Contents

Series editors foreword Acknowledgements Preface 1 The anatomy of a crisis 2 Protecting your brands and reputation 2.1 Designing hazards out of a system 2.2 Need for risk assessment procedures 2.3 Benets of due diligence 2.4 Marketers beware 2.5 Benets of corporate citizenship 3 Preparing for the unthinkable 3.1 Threats to take into account 3.2 First hint of a serious problem 3.3 Sources of help and advice 3.4 Checklist for crisis team 3.5 No magic solutions 3.6 Crisis, what crisis? 3.7 Feel and instinct 4 The Interneta two-edged sword 5 Tactics to avoid being caught off-guard 6 Product tamperinga constant threat 6.1 Keeping issues in perspective 7 Issues tracking and management 7.1 An orchestrated campaign 7.2 A suspect ingredient 7.3 Putting matters in perspective

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73 76 77 77 90 91 91 93 99 105 113 114 115 116 117 118 120 122 122 122 123 123 123 124 125 125 126 129 136 143 148 153 155 167 175 175 177 185

8 Meeting the media 8.1 Presentation skills 8.2 Reacting to a problem 8.3 Opportunities and pitfalls 8.4 Video news releases 8.5 Video bites 8.6 Keeping issues in perspective 9 Do I need help? 10 Sources of technical help 11 The powers of enforcement authorities 12 Managing a crisis 12.1 Immediate actions 12.2 Is a public recall really necessary? 12.3 Directing media enquiries 12.4 Beware of this information channel 12.5 Preparing a media statement 12.6 Going live 12.7 Be prepared for the treatment 12.8 Aim to prevent problem escalating 12.9 Remember your customers 12.10 Employees can be your best ambassadors 12.11 Accept the quirks of fate 12.12 Keep media coverage in perspective 12.13 Fixing the blame 12.14 Insurance cover 12.15 Selection of crisis leader and team 12.16 Other types of crises 13 Diet and health 13.1 Are sh a crisis waiting to surface? 14 Problems facing the food industry 14.1 Unt meat is persistent problem 14.2 New member states pose problem for EU 15 Dealing with extremist organizations and terrorist threats 16 Bioterrorisma clear and present danger 17 Signicant crises 17.1 The company that set the standard 17.2 The company that fought back 17.3 Anatomy of a crisis

Contents
17.4 17.5 The scandal that sucked in an industry The crisis that was described as a wake-up call for meat industry

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186 188 193 193 197 200 202 204 212 214 215 216 217 218 219 219 220 224 226 229 232 233 233 235 239 241 245 249 251 253 259 261

18 Interesting case histories 18.1 The crisis that brought down a government 18.2 The crisis that ravaged the Far East 18.3 The crisis that took the zz out of a soft-drinks giant 18.4 The asco that humiliated a government 18.5 A crisis that found a government wanting 18.6 The crisis that was unique 18.7 A crisis delayed by circumstances 18.8 Red alert 18.9 A lesson in protection 18.10 The Spanish cooking oil scandal 18.11 Ye powers of entry 19 Events that will shape the future 19.1 Worlds biggest food recall? 19.1.1 Facts behind illegal dye 19.1.2 Sudan 1 timeline 19.2 New bird u outbreaks spark fears of pandemic 19.3 Disaster in which the Internet and peoples initiative were supreme 19.4 Unique laws force mercury warning 19.5 End for GM crops in the UK? 19.6 New phenomenon appears on Internet Appendix A: Appendix B: Appendix C: Appendix D: Appendix E: Appendix F: Appendix G: Typical crisis plan Typical crisis checklist Typical press release and Question and Answer Sheet Typical press advertisement Model announcement to employees Threatening phone call: checklist Sources of information and assistance

Glossary of frequently used abbreviations Index

Series editors forward

The rst edition of this book was the second in our series of Practical Approaches, and deals with a subject which had received relatively little attention in the technical literature, despite the potentially horrendous consequences that can occur as a result of a crisis situation not being handled as professionally as it might. Clearly, those who were then involved in a crisis might not particularly have wished to be reminded of it from the commercial angle, nor would they have wished to reveal their defenses so far as their technology was concerned. That was in 1994, and things have certainly changed in the intervening decade, although most of the principles of competent technical and business management had already been written down, even if not unduly publicized. However, as was previously said, experience is invaluable, and the author and editor therefore set out to give the reader the atmosphere of and background to reported crises, to provide guidance on developing a procedure for handling a crisis in ones own business, and to give appropriate points of reference to professional help and support. It may appear that the emphasis has been given to terrorism outside of direct interest to the food and drink industry. However, not only are there lessons to be learned from observing such activities elsewhere, but also they may have direct effectssuch as disruption of water or energy supplies. They may also have indirect effects as a result of the direct effects they could have on suppliers of raw materials, both ingredients and packaging materials. What does need to be emphasized is the way in which various crises have arisen over the subsequent period, the divergent motivations and circumstances from which they might arise, and the on-going need to ensure, in dealing with any specic situation, that those involved recognize each others disciplines and work effectively as a team. Those in such a team must have condence in the capability and reliability of one another. To the food technologist or scientist, the book may be unusual in that it is written by someone who is fundamentally a media/PR person rather than an academic or technocrat. The literary style is far from classical technology textbook, but rather encaptures that with which one could be expected to be confronted, and may well need to use in a real-life crisis.

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Series editors foreword

As editor, I should say that I have had the privilege of working with the author for at least thirty years. We have not always seen eye to eye, he wanting to simplify the most complex of technical issues to the popular media oneliner or sound-bite, while I have wanted to qualify or reference everything severely. That has not stopped us and our colleagues from developing some very effective and sensible relationships and approaches. After newspaper experience, Colin Doeg went into public relations, working for several blue chip companies in different industries as well as a trade association. During his years in public relations, he had seen crisis management develop into a specialized skill in its own right, especially in the food industry. He has also been involved in employee communications and the introduction of cultural change to an organization as well as launching, editing or working on a number of award-winning employee publications. Perhaps, I ought not to say that Colin is an enthusiastic underwater photographer, and remains a very keen cyclist. In this publication, we have tried to pack in as much as possible from reallife situations. To some extent, although lled with urgency at the time that a crisis arises, management of such situations has had a repetitive element in the temporal scenario. We have tried to continue to build up for the reader a feel for potential crisis situations that historically have only been born out of experience or very explicit training. Hence, we have tried to provide examples from some of the recorded experiences via the written word wherever possible. As a food technologist myself, and despite having worked with the author over a number of years, many of the revelations about the media and its speed of response and deadlines continue to amaze me. For example, before we produced the rst edition, I had never realized that the early editions of Sunday newspapers in the United Kingdom go to print on Saturday afternoons, had not fully appreciated the expansion of satellite communications, or that the inspired and well-informed comments of commentators at events like the Olympic Games ow from the screens of an elaborate network of laptop computers. There is little doubt that those concerned for their businesses who read this book will reap benet. The precise extent of that benet will depend upon the size and nature of the business, the actual degree of risk of a crisis arising, and the extent to which that organization may already have crisis management systems in place. I suspect that there will be much of value in the book for everyone and a very great deal for those who have not previously had the need or inclination to address such potential problem areas. The contact points and references to sources of help and information alone should justify attention. On HACCP (Hazard Analysis and Critical Control Point system), we do not manage within a static environment, and feedback from readers on scope, content, omissions and potential inclusions will be welcomed.

Series editors foreword

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This publication has tted comfortably within the Practical Approaches, as we had envisaged, and provides a useful extension to the database that we want to provide and its potential interface with adjacent disciplines. Professor Keith Anderson January 2005

Acknowledgements

By the very nature of the issues involved, the specialists who thrive on the challenges and pressures of crisis management are reticent about much of the information and knowledge they possess. In the wrong hands that could be a threat to the very organizations it is meant to protect. Therefore, inevitably, much of the world of crisis management is concealed behind a veil of commercial security. However, if you survive a baptism of re by product recall or tampering and become an accepted member of that network, you can have access to a wealth of mutual help and support. A serious problem can temporarily unite companies that are traditionally erce rivals in the market place. The public relations managers and food technologists of businesses normally opposed to each other will band together to offer their experience and skills in dealing with many problems, even to the extent of warning each other of pitfalls they experienced when faced with a similar difculty. One of the pleasures of writing the rst edition of this book was the opportunity to meet many more members of that community and to enjoy their enthusiasm and interest in such a specialized subject. They, more than anyone, would have appreciated the fact that, while I gratefully acknowledged their generous help, I mentioned very few by name! Much of the contact in the preparation of the second edition has been via the Internet but now that crisis management has become a much greater global issue, it is not possible to meet as many people face to face. Sadly, a keyboard and an ISP have had to take the place of personal contact but that, in itself, is a measure of the changing world in which we live and operate. In that respect, I thank those who responded to my e-mails and also to the governments and other organizations that have created such useful web sites. As ever, one of the over-riding concerns Keith Anderson and I have always had in connection with a book dealing with this subject, is that it might contain too much information, and so help some very undesirable members of the community. For that reason, for example, reference is made to foreign bodies or objects but seldom to the specic items involved to discourage copy-cat incidents.

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Acknowledgements

However, pointers are given as to how genuine businesses can become better informed about such things. As ever, it has been a delight to work once more with Keith Anderson, who has always been such a sound and delightful colleague, especially when dealing with matters many other people would be too frightened to touch. I have been particularly appreciative of the help provided by Dr Ray Gibson and Dr Graham Pettipher of Reading Scientic Services Limited, Tony Hines, MBE of Leatherhead Food International Research Association, Professor Tom Toomey of Ventress Technical Limited and Steve Dunlop of Dunlop Media. Susan Safran, the commissioning editor at Springer Science + Business Media, has been particularly helpful and a pleasure to work with. Finally, my everlasting thanks go to my wife Mary, whose support and encouragement have made so many things possible, including the production of the second edition of this book. Colin Doeg, London, January 2005.

Preface

Today the world is torn by crises on a scale never envisaged when the rst edition of this book was written a decade ago. At that point, no one could have conceived the horror of the bombing of the twin trade towers in New York or the other spectaculars which have followed. Few could even conceive the possibility of gun-crazed pupils running amok in their schools and universities, indiscriminately killing teachers and fellow pupils. Few could have anticipated such an inexorable expansion of the Internet or the development of communications, especially the facilities used by the worlds media and pressure groups. It is a far cry from the 1970s, when Brooke Bond Group, then the worlds largest tea company, was being pilloried by an investigative television program over conditions of employment on its estates in India. Then it usually took a week to get an answer to a simple question. Typically, a Telex message had to be sent from the Groups head ofce in London, England, to the head ofce of the Indian operation in Calcutta. From there, a new message had to be typed and sent on the internal Telex network to another ofce in the south of the sub-continent from where it was re-transmitted to an ofce even further south. From here a runnerin fact an executive in a cartook it to the head ofce of that particular group of estates. If one was lucky, the message did not get mutilated along the way by someone who perhaps did not speak English and, therefore, had to tap it out one character at a time on a cumbersome Telex machine! The following morning, another executive would get in his car and drive to the concerned tea estate, usually a long and tiring journey into a remote area with poor roads. That done, he would enjoy a well-earned nights sleep before beginning to seek the answer the following morning. By now it was the third day. The executive would obtain the necessary information and spend a second night at the estate before setting off back to his ofce, usually arriving at dusk. As traveling by night was best avoided, the reply would not begin its tortuous journey back to the groups London ofces until the following morning. Five days later! Today, even allowing for temperamental telephone connections in remote parts of the world, thanks to the development of the Internet, it is even possible

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to have conversations on-line so that questions could be answered immediately by using the instant messaging facility. Even without instant messaging, it can only take a few hours to obtain an answer. In some areas, of course, it would also be possible to use a laptop computer with an appropriate phone card or data card to replace the conventional telephone link. On some airlines, it is becoming commonplace to plug your laptop computer into an Internet connection and continue working and surng during the ight. Satellite phones are also useful in some circumstances as is video conferencing, if the facilities are available and circumstances justify its use. Indeed, the manner in which many military operations during Operation Iraqi Freedom in 2003 were controlled thousands of miles away by armchair generals in a centre in mainland America is an extraordinary example of the capabilities of modern methods of communications, when cost is not a consideration. The world of the media continues to see dramatic advances. Thanks to satellite links and increasingly smaller and more portable equipment, it has become quicker and easier to transmit reports from virtually anywhere in the world, from the anks of Mount Everest to the depths of the sea. Where it is difcult for camera crews to operate, reporters can now speak live into video phones and le their reports that way. Such is the march of technology that a news program being transmitted to millions of viewers can be anchored in one part of the worldeven from a windy street corneryet be seamlessly linked to studios and other centers thousands of miles from each other. The main presenter can hold discussions with colleagues and experts in distant studios or on location as well as introduce local news and weather forecasts, all as if everyone was in the same studio. The downside is that pressures are even greater on journalists and there is increasingly less time for them to ensure the accuracy of their reports. Equally, it is even more crucial that anyone involved in the communications aspects of crisis management appreciates the equal need for speed and accuracy in ensuring they provide reporters with the necessary information. Now we are being faced with a new phenomenon. Anyone with access to the Internet can be a journalist and publish their own information and reports on any subject that takes their fancy. They can also sidestep any ofcial restrictions and expose issues that concern them, like the abuse of Iraqi prisoners by United States troops in Baghdads Abu Ghraib jail in 2004. There was a world scoop if ever there was one. Corporate security is threatened by the proliferation of portable storage devices like jumpdrives, memory sticks, music players and even digital cameras. Small and unobtrusive, they can be plugged easily into computers so that vital information can be downloaded within a few moments. Recent incidents involving anthrax and ricin have raised concerns that ndings from life science research could be used to engineer deadly viruses that could be unleashed in the world.

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Each year, according to the World Health Organization1 (WHO), unsafe food is responsible for illness in at least two billion people worldwide and can result in deaths. Announcing the second global forum of food safety regulators in Bangkok, Thailand, in October 2004, the WHO pointed out that, while large foodborne outbreaks often received the most media attention, the majority were single cases occurring in all countries in the world. As an example, the Organization cited the fact that some 700 000 people die every year in Asia alone due to individual cases of food- and water-borne disease that usually do not hit press headlines. Many more suffered long-term debilitation. The three-day meeting, the largest-ever of its kind, brought together regulators from health, agriculture and trade to develop a common understanding of how to strengthen food safety systems to better address the increasingly complex foodborne threats to public health and safe food supplies. These complex threats were highlighted by America in a special paper submitted to the forum. It pointed out: The environment has traditionally been thought of as the origin of many chemical food hazards, such as heavy metals and persistent organic pollutants. However, it is becoming increasingly apparent that new pathogenic micro-organisms are emerging due to environmental stressors from food production practices. Increased risk of pathogenic micro-organisms may also be attributed to contamination of the agricultural water supply caused by human and animal waste, use of manure as fertilizer, health and hygienic practices of agricultural works, and global movement of foods. As fresh produce is exported from farms all over the world to the tables of importing countries, the responsibility of domestic public health agencies is changing to adapt to our global market. There is increasing demand from developing countries for technical assistance on new farm production and management practices, good manufacturing and processing technologies. Developed country members of the World Trade Organization have been asked to deliver more sanitary/phytosanitary training as food safety has become critical to successful trade. The document said an example of an emerging risk of foodborne disease was associated with consumption of fresh produce. Produce is an important component of a healthy diet and can play a vital role in weight management, which is a high priority for public health. Because most produce is grown in the natural environment, it is vulnerable to contamination with pathogens. Moreover, produce is often consumed raw without any type of intervention to control or eliminate pathogens. The USs Food and Drug Administration (FDA) had proposed an action plan to minimize illness associated with eating fresh produce. The objectives were to prevent such contamination in the rst place, to minimize the health impact when such contamination occurs, to improve communication with producers, preparers and consumers and to facilitate relevant research.

http:/ /www.who.int/mediacentre/news/releases/2004/pr71

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In conclusion, the paper made the point that reducing such illnesses required a collaborative effort by federal public health regulators such as the FDA and federal food safety partners such as the centers for disease control within the United States as well as counterparts in other countries, states and cities, the food industry, academia and consumers. Even in 2002, the WHO was warning about these new challenges. In a Global Strategy for Food Safety: safer food for better health2 , it pointed out that food grown in one country could now be transported and consumed halfway across the world. Institutionalizing children in schools and childcare facilities and a growing number of elderly persons in hospitals and nursing homes meant that food for many was prepared by a few and could, therefore, be the source of major foodborne disease outbreaks. Food and feed were distributed over far greater distances than before, creating the conditions for widespread outbreaks of foodborne illnesses. As an example, the document referred to the fact that over 1 500 farms in Europe had received dioxin-contaminated feed from a single source over a two-week period. Food produced from animals given this contaminated fodder had found its way onto every continent within weeks and the effects of exposure to dioxin from this source on public health might become known only after years of investigation. The international spread of meat and bonemeal prepared from cattle affected by bovine spongiform encephalitis (BSE) was another example. Increasing urbanization led to greater requirements for the transport, storage and preparation of food and increasing wealth, an urban lifestyle and sometimes lack of facilities meant that people ate much of their food away from home. In some countries, food was often prepared by street vendors. Though signicant progress had been made in many countries to make food safer, thousands of millions of people still became ill each year from eating contaminated food. The emergence of increased antimicrobial resistance in bacteria causing disease was aggravating the picture and the public was increasingly aware of the risk posed by pathogenic micro-organisms and chemical substances in the food supply. Furthermore, the introduction of new technologies, including genetic engineering and irradiation, were posing a special challenge in the light of the climate of concern about food safety. The document made the point: Some new technologies will increase agricultural production and make food safer, but their usefulness and safety must be demonstrated if they are to be accepted by consumers. Furthermore, the evaluation must be participatory, transparent and conducted using internationally agreed methods Until recently, most systems for regulating food safety were based on legal denitions of unsafe food, enforcement programs for the removal of unsafe food from the market and sanctions for the responsible parties. These traditional systems cannot respond to the existing and emerging challenges to food safety because they do not provide or stimulate a preventive approach. During the past decade, there was a transition to risk analysis based on better scientic
2

http:/ /www.who.int/fsf

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knowledge of foodborne illness and its causes. This provides a preventive basis for regulatory measures for food safety at both national and international levels. The risk-based approach must be backed by information on the most appropriate and effective means to control foodborne hazards. In Europe, which was rocked by a variety of food scares in the 1990s, there has been a major overhaul of regulations concerning the safety of food and animal feed not only produced within the European Union (EU) but also imported into any of its countries. Today crisis management is an all-encompassing buzzword. It includes not only communications with the general public and other audiences, but also business recovery, reputation protection, nancial protection and many more areas including information technology. Search the Internet for crisis + management and you will be presented with thousands of matches. Experts offer their services. Schools and universities publish their crisis management plans, presumably in an attempt to reassure parents and future pupils. A television channel in the UK even ran a program in which a studio panel was judged on its ability to cope with a horrendous series of scenarios based on a massive series of explosions at a mainline railway terminus. Ironically, a few weeks later, nearly 200 people were killed and more than 1 400 injured in a series of terrible blasts on commuter trains during the morning rush hour in Madrid, the capital of Spain. Most food crises pale into insignicance in the face of such events but they are still serious and their nancial consequences can be dire. Thousands of tourists shunned the UK when the worlds TV screens were lled with images of the funeral pyres on which were being burned the bodies of hundreds of cattle slaughtered during outbreaks of bovine spongiform encephalopathy (BSE or mad cow disease) and foot and mouth disease. Asias poultry industry was devastated by a serious outbreak of avian u that also claimed lives. Food poisoning outbreaks have swept through cruise liners as people were enjoying life at sea and caused hotels to be struck off holiday companies lists after guests were laid low with similar bugs or serious aws were exposed in general standards of hygiene. The holidaymakers involved lmed the conditions with their video cameras or took ordinary photographs of the conditions they had to endure before going to the media with this convincing photographic material. They also demanded compensation and started legal actions against the companies involved. Perhaps even more alarming, governments have become concerned about terrorist and bio-terrorist attacks. It is all too easy deliberately to contaminate food, drinks and water supplies with live microora or toxins and poisons. In a world that threatens to become more bizarre by the day, people now can place bets on web-based sites that a particular event will happen within a given timeframe, even a terrorist attack. Bets are anonymous but security experts believe that the more money is placed on a particular happening the more likely it is that the betting is being inuenced by people with advance knowledge of what is proposed! By monitoring the site, it is hoped that the terrorist attacks and outrages can be thwarted.

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This is the world in which we live today. And this is the backdrop against which all those in the food industry who are involved in crisis management have to operate.

Threat of foodborne illnesses

Foodborne illnesses caused by micro-organisms is a large and growing public health problem with signicant increases over the past few decades in diseases caused by pathogens such as Salmonella, Campylobacter jejuni and enterohemorrhagic Escherichia coli and parasites such as cryptosporidium, cryptospora or trematodes. In 1998, approximately 1.8 million children in developing countries (excluding China) died from diarrhoeal disease caused by microbiological agents, mostly originating from food and water. Every year, one person in three in industrialized countries may be affected by foodborne illness. In the United States, some 76 million cases of such illness, resulting in 325 000 hospitalizations and 5 000 deaths are estimated to occur annually. Studies in the US in 1995 estimated that the annual cost of the 3.312 million cases of foodborne illness caused by seven pathogens was $6.535 billion. The medical costs and the value of lives lost during just ve foodborne outbreaks in England and Wales in 1996 were estimated at 300700 million. The cost of the estimated 11 500 daily cases of food poisoning in Australia was calculated at AU$2.6 billion annually.

Source: World Health Organization Global Strategy for Food Safety: safer food for better health. Colin Doeg, London, United Kingdom, January 2005.