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Don’t let a rogue supplier damage the reputation of your food and beverage business

November 17, 2023

It only takes one bad supplier to undermine trust in food quality and safety. Retailers and manufacturers need good intelligence and robust crisis management to avoid lasting damage to their brand and reputation.
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Once, the food supply chain was short and simple, with very few steps from farm to fork. But in today’s world of global agribusiness and food processing, it’s a lot more complex.

While that complexity brings benefits in variety, quality and choice, it also creates added risk that unsafe or fake food could end up in food products, because of either poor practice or fraud by a lower tier supplier.

In the most recent high-profile case in the UK, a meat supplier has been accused of passing off rotten pork, sourced from a variety of countries, as quality British produce.

The meat allegedly entered the food chain in countless ready meals, quiches and sandwiches, causing a potential danger to health over several years before being detected.

For retailers and manufacturers, the fallout from such incidents can be huge.

Years of work building consumer trust and a reputation for quality and reliability can be undone in the space of a few days. So, what can they do to reduce their risks and protect their reputation?

Due diligence and real-time intelligence can help detect bad practice before it becomes an issue.

While fast, effective crisis response can help limit the damage and rebuild trust if the story ends up at the top of the news.

The risk of supplier fraud

By allegedly mixing bad meat in with good, the rogue UK processor managed to get their produce past food product manufacturers and the supermarkets who bought the end products.

It is claimed that the supplier went to elaborate lengths to hide the suspect produce when inspectors visited.

Such determined fraud can be hard to prevent, even with the best quality systems and regulatory checks.”

Sue Newton
GB Food and Beverage Leader

Such determined fraud can be hard to prevent, even with the best quality systems and regulatory checks.

Some of the most reputable manufacturers and retailers, renowned for their quality, fell victim to the scam.

And it’s not the first or the worst case of wide scale fraud.

Lessons are still being learned from the 2013 scandal when undeclared or improperly declared horsemeat entered food supply chains across Europe, prompting a huge wave of product recalls and regulatory reviews.

Losing trust with consumers

Other smaller scale events, such as product contaminations, can also have a drip-drip effect, eroding trust in food safety and standards. Food recalls increased year on year in both the U.S. and Europe in 2022.1

A story only needs to be picked up by a food celebrity, consumer champion or influencer to get major traction and rise to the top of the news on social and mainstream media.

That’s not good for business in a world where consumers are more conscious of what they eat, and producers are answerable to a wider range of stakeholders, regulators and NGOs.

An accumulation of bad news stories can lead to a tipping point where consumers start to turn away from particular brands or stores or look to newer providers.

How to reduce your risks and protect your reputation

Carry out thorough due diligence

Only do business with firms that have a strong track record and are widely trusted in the market. Check and double check their history and finances before accepting them as a partner.

Monitor your suppliers in real time

Track everything that’s being said about your suppliers on social and news media in real time. It could help you pick up on signs that something is going wrong before it turns into a crisis.

Always think about the reputational as well as financial risk

Even a seemingly minor product recall can turn into a bad news story if it gets traction or is associated with an issue such as animal abuse or environmental damage.

Create a dialogue with your stakeholders

Keep up a conversation with your customers and stakeholders on social media. By listening and engaging with them, they’ll be more likely to hear your side of the story if an incident happens.

Integrate reputation into your crisis management plans

Make sure your plan includes reputational risk scenarios and what to do if an adverse publicity event happens. How you react in the first hours can be vital in calming the situation and restoring trust.

A helping hand: WTW reputational risk

WTW has partnered with some of the global leaders in this field to develop a holistic solution that can help prevent a crisis happening and support the response and recovery if it does occur.

Prevention: to get ahead of events and prevent potential reputational issues escalating into a crisis, the powerful Polecat platform offers real-time horizon scanning. AI-powered algorithms synthesize data from online and social media channels into dashboards and risk alerts for relevant media.

Planning: our Reputational Risk Readiness Review can help organizations define and quantify their reputational risks, identify the potential impacts and map any gaps that need mitigation.

WTW offers access to experienced crisis communications experts who have managed crisis situations of all types around the world.”

Sue Newton
GB Food and Beverage Leader

Response: WTW offers access to experienced crisis communications experts who have managed crisis situations of all types around the world, from advice on media handling and strategy to leadership statements and speeches.

Risk transfer: our reputational risk insurance product offers up to $50 million cover for loss of gross profit as a result of a significant adverse publicity event. This includes immediate interim payments to get through the crisis and support spread over up to 12 months to help you stay afloat in the aftermath.

Rehabilitation: our experts will work with you over the longer term to develop campaigns and communications to help you turn the tide of public opinion back in your favor.

To find out more about our Reputational Crisis Insurance and Risk Management Solution, please get in touch.

Source

1 European product recalls rose in 2022 for the second consecutive year;
Report finds an enormous increase in the number of food items recalled in 2022

Contacts

GB Food and Beverage Leader

Global Head of Sales, Direct and Facultative

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