If you were on Twitter last Sunday, you’ll probably have noticed the following tweet and stifled a snigger: “Just heard there’s a botulism scare regarding Loyd Grossman korma sauce. It could make you shit ‘through the keyhole’.”
Neither Grossman nor Premier Foods, which makes the sauce, are likely to have seen the funny side, though. Having just been handed a debt lifeline from its lenders, Britain’s biggest food manufacturer has once again found itself all over the newspapers and social networks for the wrong reasons.
Things had finally seemed to be going the right way for the company. Newly-installed CEO Michael Clarke had set out his ‘powerbrand’ strategy to the City and overhauled Premier’s senior management to strengthen the focus on its growth plan. The manufacturer’s share price, which had slumped to a 52-week low of 3.01p on 3 November, even enjoyed a brief rally last Friday with the news that senior directors had bought company shares after it was granted an extra three months’ grace to negotiate its £1.3bn debt pile.
Then, in a dramatic turn of events at the weekend, a batch of Grossman’s korma sauce was recalled following an outbreak of botulism. Two Scottish children – a 10-year-old brother and sister – were hospitalisedwith the potentially life-threatening paralytic illness after eating from a 350g jar believed to be contaminated by the bacterium clostridium botulinum. Premier was quick to reassure people that no other batches or products were believed to be aff ected, but this wasn’t enough to stop its shares tumbling. And questions are now being asked about how many more PR disasters the company can survive.
It’s not the first time Premier has got itself into bother with food contamination. Back in 2005, the illegal food dye Sudan I – linked to an increased risk of cancer – was found in chilli powder used by Premier to make a Worcester sauce used in a wide range of lines.
In that instance, it was Premier’s policing of its supply chain that was chiefl y criticised and the threat to health was considered nominal. The latest incident is far more serious, say technical experts, partly because checking forbotulism should be the “bread and butter” technical check for all ambient food and drink manufacturers – but mostly because botulism can be fatal in 5% to 10% of cases.
Rare in the UK, botulism tends to occur when clostridium botulinum spores – which can only grow in the absence of oxygen – get into an airtight container. It is the food scare manufacturers fear most, says one industry source.
“Normally with product recalls you might have a piece of glass, metal, mould growing, perhaps salmonella, which is bad news, but clostridium botulinum is the nightmare scenario,” she says.
The result of process failure?
When an outbreak does occur, a rapid response is key and PR experts have praised the swiftness of the product recall.
“Being perceived to be open, transparent and proactive are key in demonstrating a proactive effort to impose some form of control on the uncertain and unpredictable circumstances that characterise these early stages of any potentially serious food contamination incident,” says Mike Seymour, international director of the crisis & issues management practice at Edelman, which handled the worldwide Heineken glass shard product recall in the early 1990s.
But Chris Gilmour, head of crisis PR at Beattie Communications, says Premier has made one big mistake. “Grossman himself hasn’t been very visible,” he says. “I don’t know if there’s tension between him and Premier Foods or it’s contractual, but unity from all sides is very important.”
The crisis is likely to have done serious damage to the Grossman brand – and the company itself, adds Lou Ellerton, consultant at branding agency The Value Engineer, suggesting that some people will see it as evidence that Premier is neglecting its so-called power brands. “Turnaround plan after turnaround plan has failed to fully address the structural issues in the business, and they’re stuck in a cycle of short-term planning that means they’ve failed to invest properly in their brands – with the possible exception of Hovis.”
Even before the contamination, the Grossman brand had seen value sales slip 0.43% to £53m and volume fall 0.62% [Nielsen 52w/e 1 October 2011]. It was among the brands hardest hit by Tesco’s temporary delisting of a quarter of Premier’s branded products in the pricing row that raged between 26 March and 24 June this year – shrinking from 42 to 16 lines.
It also saw its three pizza lines delisted by Sainsbury’s in June after failing to secure strongenough off-promotion sales. In the same month, the entire sauce range was overhauled in an attempt to extend the brand beyond its Italian cuisine heartland and position it as a choice for ‘food lovers’. It gave products bolder packaging and a new strapline – ‘Share a lifetime’s passion’ – and added four new flavours to its Loyd Grossman For One range after it failed to hit its first year sales target of £7m – managing to reach just £3m.
Despite these efforts, experts are predicting tough times for the brand. “A case like this undermines the trust in the whole Loyd Grossman brand – causing even loyal consumers to think twice before buying and giving competitors an opportunity in a competitive market,” says Brand Genetics insight and innovation director Tom Ellis.
The damage might not be restricted to Loyd Grossman, he adds. “Cooking sauce is a category that caters to busy mums who are trading off quality for convenience, and any doubts on quality might damage the whole category.”
The investigation is ongoing into the cause of the outbreak. Premier says it is working closely with the authorities and that “the safety of consumers is of paramount importance to us”.
But this week’s share price falls show confidence in Premier’s management has again been dented. It won’t have helped that it was Clarke himself who identified Grossman sauces as one of eight ‘power brands’ with the best growth prospects.
Even through the keyhole, it’s hard to see that now
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