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SpirE-Journal 2013 Q2

Food Safety – Can marketing concepts help food manufacturers regain consumer trust?

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Food Safety - Can marketing concepts help food manufacturers regain consumer trust?

The recent horsemeat scandal in Europe has exposed the ugly side of the food supply chain and highlighted the dangers of cheap processed food. China has been rocked by a series of food and water safety scandals. How can the food industry win back consumer trust?

Pressing the right buttons

Food & beverage manufacturers know the exact buttons to press when it comes to getting consumers hooked. Lots of money, time and R&D efforts are invested to formulate concoctions with just the right amount of salt, sugar and fat to make consumers crave for more. In this regard, they behave no differently from companies in any other industry.

Thorton Mustard, a food consultant who authored “The Taste Signature Revealed”, opined that companies are designing food with a “more-ish” effect by achieving an intense flavor at the initial taste which dies off quickly. Hence, after finishing the first mouthful, the consumer would seek to re-taste the initial flavor – stimulating repeat purchases.

Those well-known crunch sounds induce consumer cravings too. Research shows that consumer perceptions of chips are altered by the sound they make when bitten into – the louder the sound, the crispier and fresher the chips are perceived to be. More often than not, consumers are unaware of the influence of such auditory cues. This is, again, no different from how other industries operate. Manufacturers of ATM machines, for example, engineered them to generate loud noises that sound like dollar bills being flipped.

In the context of processed foods being freely available and aggressively marketed at the point of sale, consumers have come to expect that safety standards can be taken for granted. The recent food safety scandals affecting Europe and Asia thus have the potential to cause deeper damage to the food industry. It could lead to public questioning of the food industry’s freedom to engage in marketing and product formulation in the way it currently does. It is imperative for the industry to put these issues to bed.

Impact on the food industry

Despite stringent governmental regulatory regimes, Tesco, a leading supermarket chain, found horsemeat within its beef burger patties in January this year. Fear of contamination in other processed foods quickly escalated, with the industry and regulators struggling with damage control.

An estimated 40 percent of shoppers eye the groceries in their local supermarkets with suspicion.

These food scandals have shaken consumers all over the world. Moving forward, the food industry needs to regain consumer trust quickly. Recent research suggests that an estimated 40 percent of shoppers eye the groceries in their local supermarkets with suspicion.

A brief review of the recent scandals will put these concerns into perspective.

IKEA – Horsemeat found in meatballs

Swedish retail group IKEA found that their minced meat was contaminated with horsemeat. In-house checks revealed approximately 1 – 10% of horsemeat in the minced meat at the slaughterhouse. European authorities and the IKEA Group promptly recalled all products containing horsemeat from restaurants and supermarkets, and sent them to factories for biogas conversion.

The scandal had tarnished the brand image of IKEA in other countries. To maintain consumer trust, IKEA Singapore temporarily halted the sale of meatballs in its restaurants and sent them for independent testing.

Fraudulent labeling of organic eggs

Organic foods have always been perceived to be healthier. These foods are highly sought after amongst more affluent, health-conscious consumers. This is especially true in Germany, where organic eggs, vegetables and fruit command high price premiums.

Recently, a fraudulent organic egg labeling scandal broke out in Germany, affecting 160 poultry farms that claimed to be organic egg producers. Eggs were found to be mislabeled, with sources affirming that the hens were not living in conditions that conform to organic regulations. Not only did this scandal affect consumer trust; many organic egg producers felt betrayed.

Rat meat passed off as lamb in China

Recently in China, it was discovered that rats were processed with additives such as gelatin and passed off as lamb meat. These meats were then sold to farmers’ markets in Jiangsu province and Shanghai. This was rightly deemed a criminal act, as it jeopardized public health.

To tackle this problem, the Ministry of Public Security in China executed a 3-month nationwide enforcement operation, during which more than 380 cases of food violation were uncovered. This led to the arrest of 904 suspects.

Cutting losses

With the recent spate of food scandals, food industry organizations need to react quickly and strategically to re-establish consumer trust. Some examples of organizations who have acted in this way are provided below.

Tesco

One of the world’s leading supermarket chains became the first retailer to be embroiled in the horsemeat scandal. It advertised in national newspapers such as The Times, Guardian and Independent to publicly apologize for its “faulty” burger patties. To further salvage the situation, Tesco promised its customers that it would purchase its meat from the UK with effect from July 201315, and install cameras at its suppliers’ factories.

Asda

The British supermarket chain stepped up its supply chain security by launching a full traceability audit with its suppliers. It also withdrew four home brands of frozen burgers as a precautionary measure.

Waitrose

British supermarket chain Waitrose recalled its beef meatballs after they were found to contain traces of pork. It promptly put up customer information notices in all branches to inform its customers about the issue and terminated its business relationship with the meatball supplier. Moving forward, Waitrose would be sourcing frozen meat from the UK.

Regaining the consumers’ trust

Amidst the spate of food scandals, consumers are becoming increasingly skeptical about the quality of food. What measures does the food industry need to push internationally to return consumer confidence to some semblance of normalcy?

Government initiatives

Improving coordination efforts

Government authorities should tighten surveillance on food manufacturers that may work with cheaper substitutable ingredients. The food industry should push for this as the only solution that can police all producers and retailers, even the smaller ones.

Enforcing tougher penalties

would disincentive illegal practices, especially fraudulent food labeling. Food labels should also detail food origins.

Enhancing food testing processes

would minimize the possibility of food fraud recurring. Authorities could increase transparency around their testing regimes. All test results should be disclosed for investigations where necessary.

Public education

Propagating honest marketing strategies through public campaigns would help educate stakeholders. For instance, Food Industry Asia (FIA), a non-profit organization representing Asia’s food industry, conducted the World Food Safety Conference in May this year. At the conference, participants discussed measures and solutions to mitigate food safety risk and maintain food quality through effective supplier collaboration.

Community efforts

Increasing community awareness and dialogue between NGOs and companies would encourage positive industry practices. This can be achieved through platforms such as social media. A recently published report ranked companies according to various criteria, such as transparency of supply chains and operations, ensuring rights of workers and farmers, management of natural resources used and adoption of policies to protect the environment. This year-long study aimed to provide consumers with information on food purchases and processes. It also encouraged consumers to use social media to question food companies that had failed to meet ethical standards.

New marketing concepts give hope

Amidst the food scandals, new marketing concepts can also help address the trust deficit. Interesting and creative concepts can play an important role in regaining consumer confidence in the industry.

Emphasis on local food sourcing

The trend towards ready-to-eat meals has increased the need for local food sourcing. Local sourcing generally creates a shorter and more easily controlled supply chain. The responses of some British retailers affected by the recent processed meat scandals underline how local sourcing will be an important short-term trend that provides more assurance of quality to consumers.

The Nordic countries have been ahead of the curve in this regard. They have pioneered the “New Nordic Food Movement”, emphasizing localized and artisanal food production, self-sufficiency and healthy-eating. The fundamentals of this approach lie in cooking and eating according to the seasons. It also places great emphasis on government enforcement of food safety standards.

Demand for organic food

Rising awareness of healthy living has increased the demand for organic food. Reducing usage of chemical pesticides, utilizing soil conservation, as well as eating more food with less salt and sugar are some examples of organic food trends. Retail giant Walmart shared that sales of organic products in its stores are growing at twice the speed of conventional food products.

Transparency, ethics and sustainability in food industry practices

One good example of this trend would be Starbucks, the global coffee company. It strives to give farmers a fair price for their crops by purchasing Fair Trade Certified coffee. Starbucks believes that responsible purchasing will foster better relationships with farmers and achieve a long-term supply of high-quality beans.

The road ahead

There are many lessons to be drawn from the recent food scandals. While these scandals have drawn the inevitable calls for greater governmental enforcement, the burden of regaining consumer trust will need to be borne primarily by the industry if it is to prevent the erosion of its hard-won brand equity.

Moving forward, food producers should present a much stronger health, sustainability and ethics-oriented value proposition to consumers. Today’s medically-literate consumers value price and convenience but certainly not at the expense of health.

To execute this, they need more robust practices around things like local sourcing, quality testing and ethical and sustainable sourcing. These practices need to be messaged more clearly to consumers so that they can become purchasing criteria.

For instance, Häagen-Dazs created a ‘microsite’ to raise awareness of its honeybee preservation campaign, which helped to raise USD7,000 in two days.

The winners in tomorrow’s food industry competition will be those who deliver the healthiest value propositions.

In an era where health consciousness and medical literacy – not to mention ethical concerns – continue to increase, the winners in tomorrow’s food industry competition will be those who deliver not the tastiest and cheapest food but the healthiest value propositions, in more ways than one.

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