Explore this issueFebruary/March 2014
Today, everyone can be a global publisher, using text, images, and videos to comment on their experiences with companies—good or bad. In the era of social media, comments can easily be shared with dozens, hundreds, or even thousands of other consumers, just by hitting send. Once a comment is out there, it opens the door for other consumers to comment on similar experiences. Depending on the weight of the issue, and amount of visibility the comment had, the company in question may start “trending.” Since these discussions are open to the public, a journalist who monitors for trending topics could decide there is value in reporting on the topic, raising even more awareness of the situation and spreading the “buzz.”
Global Food Supply Chain Meets Global Social Networks
At the same time social media interactions are impacting consumers’ decisions, the food supply chain is growing increasingly global. According to FDA data, between 15 and 20 percent of all food consumed in the U.S. is imported from other countries. Furthermore, 50 percent of all fruits and 80 percent of seafood eaten in the U.S. comes from outside the country. An inherent risk of any global supply chain is of course the threat of adulteration, contamination, and counterfeiting. For example, of the 168 product recalls that occurred during the first half of 2013 for the food and drug categories, 138 were for food and consumer healthcare products.
The power of social media and the 24-hour news cycle enable consumers to hear about food adulteration cases faster than ever before. Food companies need to be mindful that news-worthy stories, especially when they negatively affect the safety of consumers, will spread quickly and make it nearly impossible for companies to react to negative publicity in a timely manner. If, for example, a food fraud incident results in a recall, the impact on the brand can directly affect product sales. According to Which?, a U.K. news and advice website, an independent survey revealed consumer trust in the food industry has dropped by 24 percent since the 2013 U.K. horsemeat scandal broke. Furthermore, 30 percent of shoppers were buying less processed meat at the time of the survey and 24 percent were buying fewer ready meals with meat in them, or were choosing vegetarian options. With the number of consumer product-fraud incidents growing, consumers are on higher alert when it comes to food fraud, and are less likely to forgive companies that have put their food at risk.
Numerous case studies in the food industry show a crisis situation that gained a lot of attention on social media is made worse when that brand loses valuable time at the get-go deciding how to react and respond to the situation. The potential speed of social media means preplanning is essential, as is monitoring the reaction to any responses made by the company online.
The What If?
So what happens when the integrity of the food supply chain is compromised, and that issue is compounded by global social media discussion? Take the example of the 2013 horsemeat crisis. As discussed in a research report “Every Day Low Price, Every Day High Risk: Protecting the Integrity of Food and Drug Supply Chains,” from SCM World vice president of content, Barry Blake, Google Trends illustrates the course of online conversations around the subject well with a graph shown at right “featuring a year-over-year flat line until the beginning of 2013 where the line suddenly spikes upward. It peaks in February only to return to a near flat line by June.”
The Google Trends graph corresponds to the onset of the horsemeat scandal in Ireland and the U.K. earlier this year, and the subsequent dissipation of interest in the event. As far as the effects of the event on the brand, the day following the announcement that horsemeat was found in beef products sold by the British multinational retailer Tesco, its market value dropped by €360 million or $487 million. This figure is striking, yet doesn’t even begin to quantify the overall impact to the Tesco brand. According to the company’s chief executive, Philip Clarke, June 2013 sales reported down due to the crisis, with a “small but discernible impact“ on sales of frozen and chilled foods at their convenience stores.