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NEW YORK - The outbreak linked to prepackaged fresh spinach sickened 192 people in 26 states and killed at least three, and has likely damaged consumer confidence in the safety of prepackaged produce. To help supermarket operators regain some of this confidence, VNU's Executive Perspective has prepared a list of recommendations for retailers' communications with their shoppers.
In a marketplace where consumers face unlimited store and product options, regaining the public's trust can take years. According to EP's latest alert, food safety and crisis management plans need to be well thought out and given the highest priority. Containing contamination at the source should obviously be given the greatest attention, but so should securing relations with increasingly demanding consumers.
The CPG industry could look to the experience and actions of Johnson & Johnson, which faced a nationwide panic over Extra-Strength Tylenol in 1982. Through its prompt and aggressive actions, sales, the company regained market share leadership, and Tylenol today remains the headache remedies category leader, with a 24 percent share in the FDM channel.
Here are EP's recommendations for how food retailers can manage the impact of the latest spinach scare:
- Grocers, as the dominant distributor of meat and produce - continue to stand at the forefront of any E. coli scare. Thoughtfully planned and assertive crisis management strategies will prove beneficial in limiting downsides of any further cases.
- Although spinach accounts for less than one percent of all produce sales, the bigger impact will be felt if consumers feel any hesitation in making purchases in the burgeoning $2.8 billion bagged salad industry, or even the overall produce category.
- An aggressive public relations effort will likely be needed to get consumers to again trust spinach from California, which produces 74 percent of fresh spinach grown in the U.S.
- Recurring scares will likely lead to heightened calls from consumer groups for government action. Government regulation over produce safety would not be a favorable development in the lean-margin produce industry.
- More informed about health and nutrition, today's consumers expect to receive a higher level of food safety dialogue than in the past. Increasingly, retailers will be judged by the nutrition guidance they offer to consumers as well as their commitment to food safety.
The latest alert provides data on the packaged spinach market, as well as case studies on supermarket operators that have effectively dealt with the scare. For more information, visit www.executiveperspective.com.