This article will:
- Illustrate how product recalls impact the brand reputation of FMCG companies.
- Highlight the crucial Role of Media Intelligence in crafting an effective FMCG recall response.
- Offer 6 ways in which Media Intelligence can help FMCG companies avoid or navigate a recall crisis.
Fast moving consumer goods (FMCG) are products that sell quickly. Also known as consumer packaged goods, the FMCG sector spans popular products such as confectionery and soft drinks. It is an industry that pays close attention to trends, ensuring stock levels can meet rising demands without supply greatly exceeding demand. However, there are times when things do not go as planned, which is why FMCG companies must be prepared for extreme situations.
Companies in the FMCG sector can face various crises, including:
- quality issues affecting product safety and reputation,
- supply chain disruptions hindering production and distribution,
- social responsibility controversies related to ethical and labour practices,
- environmental concerns such as sustainability and waste management, and
- health and nutrition-related issues that impact product compliance and consumer health.
These crises can significantly impact a company’s brand image, financial stability, and consumer trust. Luckily, media intelligence can help FMCG companies detect and survive these types of crises.
In this article, we will focus on product recalls, and explore how media intelligence can guide FMCG companies during a recall crisis. But first, let us look at how recalls can affect brand reputation.
How Do Recalls Impact FMCG Companies’ Reputation?
In 2009, the Peanut Butter Corporation of America was embroiled in a scandal when they were found to have sold tainted peanut products, resulting in 9 deaths and 714 incidents of sickness. Over 3,900 products were recalled at a suspected cost of around $1 billion, but the incident ultimately led to the collapse of the company and the imprisonment of its former owner.
It also soured consumer tastes for peanut butter, resulting in an industry wide drop in sales.
A decade earlier, Sara Lee, a food manufacturer, was forced to recall over 15 million pounds of meat due to a potential listeria contamination. What initially seemed like a cautionary move by the company, later resulted in a massive class action lawsuit when it was discovered that the brand knew the meat was tainted.
Product recalls can be very expensive for FMCG brands. In Sara Lee’s case, they actually employed an effective and rapid recall response (including taking out full-page ads in dozens of newspapers) and are often commended for their crisis control, but consumer confidence was still knocked.
Product recall response needs to be fast and efficient. Speed suggests that the company is acting as quickly as it can and not hiding anything from the consumer. Efficiency shows that they are leaving no stone unturned and are prioritising consumer safety.
The Crucial Role of Media Intelligence in FMCG Recall Response
A study published by Vivek Astvansh, Yen-Yao Wang, and Wei Shi in 2022 found that media reports relating to product safety had a direct impact on the likelihood of a voluntary product recall. It means companies are increasingly listening to news channels, using them to determine if there is a potential issue with their products and then reacting accordingly.
Media intelligence can highlight such issues and ensure that a proper response is organised. Media intelligence employs a series of tools and strategies to “listen” to the media (news sites, blogs) and the general public (comments, social networks), thus gleaning specific information about a company or a product.
Using consumer sentiment analysis, for instance, FMCG companies can tune in to the public consciousness and look out for potential issues.
6 Ways Media Intelligence Can Help FMCG Companies
1. Detect Recall Signals
Imagine a scenario where a soft drink contains too much pressure and the liquid bubbles or even explodes out of the can upon opening. Given the proportion of time we spend online, consumers are very likely to share this information on social media. They might take pictures or videos of the cans and publicly complain about their lack of luck, or worse, blame the company for having poor packaging. People who have experienced something similar will chime in and share their stories, multiplying the number of negative posts.
These posts could then get picked up by the news media, and the company will learn about the incident only after multiple news reports surface online. By that point, the situation would have snowballed, which means that it is too late for any proactive action to be taken. Consumers already know about it and news sites already wrote about it. So by now, the brand’s reputation has been chipped and if the right reactive measures are not taken soon, it could suffer bigger reputational damages.
By using media intelligence as part of a product recall management strategy, FMCG companies can learn about the issue before it spreads to the media. By the time the first news site publishes the story, they will have arranged a recall and prepared a response.
2. Monitor Reactions in Real Time
Media intelligence provides real time results, allowing FMCG companies to see the issues as they develop and respond accordingly. It is a direct feed into the public perception, and it is this feed that facilitates such a rapid response time.
Real-time monitoring can also be used to measure the success of product launches and marketing campaigns. Brands can see how customers react to their products and the brand messages in real time, quickly picking up on any product flaws or communication failures.
3. Understand Customer Sentiment
Media intelligence is a great way to understand and quantify customer sentiment, especially when launching a new product. It uses natural language processing (NLP) techniques that analyse social media posts and comments and classifies them as positive, neutral, or negative. This insight into customer sentiment provides brands with actionable insights that can be used to refine their marketing strategies, enhance product offerings, and ultimately strengthen customer loyalty and satisfaction.
For instance, in the aforementioned example of the “exploding” cans, insights generated from a sentiment analysis may determine that some people find it amusing and use it to gain virality on platforms such as TikTok. However, it might also point to an underlying frustration that the brand’s actual customers have with the packaging that might lead them to start buying another brand.
4. Ensure Regulatory Compliance
In 2007, Canada’s Menu Foods recalled many brands of dog and cat food after reports of illness and death. Following an investigation by the US Food and Drug Administration (FDA), it was found that these foods contained wheat gluten contaminated with melamine, a chemical used to make plastics.
There was no unified reporting system for animal illness and death, so it took a long time for the issue to come to light. In the end, thousands of pet owners complained, many animals were poisoned, and 14 cats and dogs died. Numerous individuals were indicted as a result of the incident.
The case highlights the need for regulatory compliance and suggests that media intelligence could expedite the discovery stage. Today, the companies involved could have monitored the media, learned about the issues, and potentially stopped the snowballing controversy before the deaths and subsequent reputational damage.
5. Manage Post-Recall Reputation
Some consumers only remember the bad, which is why, as mentioned above, the peanut butter industry took such a substantial hit following the controversy with the Peanut Butter Corporation of America. The issue was confined to one company and it was dealt with, but many consumers came to associate peanut butter products with the controversy, which caused peanut sales to plummet across the board. This food safety scandal impacted other peanut producers, but luckily for them, the nation’s appetite for peanut butter persisted so they saw a rebound in sales in just four months after the outbreak.
Many companies, however, are not so lucky. For some, post-recall reputation management becomes somewhat of a clean-up act. It is about making sure consumers are aware that the issue was resolved and ensuring it no longer impacts the brand’s reputation. This is easier said than done, but by closely monitoring conversations online, brands can pick up on the concerns of their consumers and improve their offerings. After fixing the problem, the insights they generated through monitoring the media can serve as a basis for creating targeted marketing campaigns to help them regain the trust of consumers.
6. Continue to Improve Products
Whatever the issue was that led to the product recall, a good media intelligence campaign can ensure it does not appear again. By taking on board everything that consumers and media agencies are saying, FMCG companies can fine-tune their business and their processes to improve both their products and their brand messages.
Adopt a Media Intelligence Strategy and Protect Your Reputation
Author Frank Bettger once said you should “Never forget a customer” and never let them forget you. It is the essence of every remarketing strategy. But customers remember the bad, as well as the good, and if it is not handled quickly or efficiently enough, a product recall can have serious implications for an FMCG business.
By providing detailed and real-time insights, media intelligence can help FMCG companies keep an ear to the ground and learn about issues just as quickly as journalists. With that information, they can arrange a rapid and effective response. To discover more about media intelligence and learn how it can benefit your company, contact A Data Pro today. Our insightful media intelligence reports can keep you informed and provide you with the necessary information in times of recall crisis. We can help you create a detailed and actionable plan and ensure your business is ready for anything!
