Businesses of all types are being negatively impacted by the Coronavirus outbreak, and food and beverage industry is not immune. Having a crisis management playbook at the ready is critical for brands to manage crisis and emerge stronger.
During this Food & Beverage Insider Podcast, Judie Bizzozero, editor in chief, and Deb Gabor, CEO of Sol Marketing, discuss the impact COVID-19 can have on a brand and steps brands must take to control the narrative. Key insights include:
- The impact of COVID-19 on food and beverage brands, including its impact on the Corona beer brand, the third most popular beer in the United States.
- Critical steps Corona’s parent company Constellation Brands took to address the facts (and rumors) and preserve the brand.
- The importance of having a crisis management playbook in place and controlling the narrative.
- Increased calls for transparency and trust in the supply chain.
- Examples of brands that managed crisis well and emerged stronger.
Links and resources:
Got feedback? Email Judie at firstname.lastname@example.org or tweet to @FoodBevINSIDER
Judie Bizzozero, editor and chief, Food & Beverage Insider: Hi and welcome to a Food & Beverage Insider podcast. I am here today with Deb Gabor, the CEO of Sol Marketing, which is a brand strategy consultancy. We are here today to talk about the Coronavirus and its impact on consumer package goods products. Deb, you’re the expert, kind of like the triage person for brands that are really dealing with fallout from COVID-19—one of which is obviously Corona beer, which is owned by Constellation Brands. They released a statement on Feb. 28 setting the record straight that sales were not being impacted, and there is no association between the beer and the virus. Can you put everything in context of how should we look at this from a business? And how do we sift away the truth versus false?
Deb Gabor, CEO of Sol Marketing: You know there are couple of things at work here that are lessons in this for anybody who is in charge of managing or being the steward of a brand. The first lesson for any brand, regardless of what category you’re in an especially in CPG. Where it involves, like a really complex supply chain, there are a lot of things that can happen to your brand that are not necessarily things that you've done at your own hand. I tell brands this all the time: Eventually you're going to face a disaster and the question is not if, it's when. Corona is a really good example of a brand facing a disaster that is not of their own creation, right? So, it's an unfortunate association where there's some similarity in the names and you add to it a sort of the perfect storm of a PR firm out of New York that did a poll that seemed to indicate, or at least the reporting on that poll seemed to indicate that there was a large percentage of Americans who thought that there was a causal relationship between Corona beer and the coronavirus. We know for sure that that is false. I encourage people to be very, very skeptical of polling data regardless of who the sources and where it's coming from. That PR firm has not been open to sharing the methodology of their study or the actual data. While they have shared the questionnaire with a reporter from The Huffington Post, they haven't been completely transparent about where the data came from. So, they are responsible in part for creating this disaster as is the general news media like news outlets like CNN, which I believe was one of the first to actually report on this. It just goes to show that if you don’t control the narrative around your brand, the narrative controls you, right?
The thing there for Corona is that Constellation Brands’ CEO has made a statement where they handled this with what I would describe as textbook aplomb—where they showed regard for humanity. Even though they're not responsible for coronavirus, nor is there any link between coronavirus and their brand, they showed regard for humanity—the people who have been affected by this, whether there are people who are being quarantined and tested, or people who have lost their lives. They did a really good job of that. They also have very, very clearly stated that there is no link between their product and the COVID-19 virus. They have taken full responsibility for the part of it which is their—which is zero. They've been open and transparent and have also used this as an opportunity to reinforce their own brand and what the brand stands for. So you know all of those things are kind of part of handling a crisis of any kind of communications or a business crisis. Those are some of the cornerstones of a good response.
Bizzozero: Absolutely. I think transparency is huge, especially when you're talking about a food or beverage company. People are consuming these products and they’re trusting brands. Today more than ever, consumers are researching brands, researching product, seeing where their supply chain comes from. There is a huge trickle-down effect. Setting aside Corona beer, can you talk in general about what a food or beverage brand should be thinking about right now regarding coronavirus and what impact it could have on the brand maybe in the next two months? I know it’s a crystal ball, but it's really affecting all types of businesses. What kind of playbook should a brand have in place to deal with a situation like this?
Gabor: I would say that if you’re responsible for a brand right now and you do not have a crisis management in crisis communication playbook in place for any kind of crisis—whether that be a crisis that you created on your own or a crisis that unfortunately got landed in your lap like what’s happening with Constellation Brands and Corona beer—you should have this crisis plan in place. I’d also say that anybody who's involved in a supply chain based manufacturing or distribution business where things are coming from a place other than like right in your very own backyard, you 100% must have something like this in place. Like how are you going to respond? Wherever the ingredients are coming from, we still don't know what the source is. We don't know exactly how it's passed. It could become or it could be a foodborne thing, and I do not want to contribute to the mass hysteria around this right now, but we need to be prepared for these things in case. And if it's not the coronavirus, it's going be some other thing that could happen to your supply chain at some point.
I just want to make the point that you should be prepared to communicate and have a plan of action in place for any kind of crisis that could face your brand. What that communication plan should include is what is the protocol for communicating? Who do you communicate with first? Who does that communicating? Where does the message come from? Who is the primary spokesperson? And then ensuring that the messages you are going out with are those underscoring your brand’s values and regard for humanity first. Always, always, always the very first thing is to show regard for the people involved and that you have a plan to be transparent and open and honest and authentic. Even if you don't have answers, you're taking full accountability and responsibility and telling the world what you're going to do and when you're going to update them. Do those things, and then provide the updates.
I always go back to a food brand that is pretty fresh in my recent memory. I live and work in Austin, Texas, so this is a brand that's near and dear to my heart. Blue Bell ice cream did a great job of keeping their brand intact through what turned out not to be a supply chain issue, but an issue of a bacterial illness breakout in one of their manufacturing plants. They did all of those things that I said, and when the brand reemerged, they came back stronger than ever and has been growing and expanding. When they came back on the market after being dark for about two years, people were lined up out the door around the corner to get into the local grocery store to get their hands on a half-gallon of vanilla ice cream because that brand behaved in a very transparent, open, thoughtful and caring way. They also communicated all the way throughout the entire process, and even took out a $125 million loan so they would be able to pay employees during the time the plant was closed. There are a lot of models of brands that are doing it right and weathered these incredible brand storms over time. I hope other brands are prepared for this because like I said, “It's not a question of if you're going to have a crisis. It really is a question of when.”
Bizzozero: Absolutely. Can you give us an example of a brand that did not handle a situation like this effectively?
Gabor: All crises are of utmost important. I group them into a couple of different categories. There's like crisis of leadership. There is crisis of culture. There's crisis of business process. There's crisis where you didn't create the crisis and it's become a crisis. A brand that did a really good job of handling crisis and weathered the storm solidly is Starbucks. If you think back about two years ago there was a Starbucks store in Philadelphia where a couple of gentlemen were meeting up for a meeting and the store manager ended up calling the police and asking them to be removed. Their only crime being they were waiting while being black, right? We all know all the backlash that occurred. Starbucks then-CEO acted very swiftly to take full responsibility and take very swift action and big action. I don't want to talk about the action itself because there are a lot of critics of that. I'm just talking about the crisis communication response. They took very swift action, took full responsibility, communicated very, openly and authentically with the public. Never trying to blame anybody, but saying it was a problem of their own creation. It has to do with training and education of the people at the store level and we need to empower people to be able to act according to our values. The letter that he wrote that I think is probably, if you go deep into the archives of the Internet, is probably somewhere on the Starbucks’ website. I reprinted a copy of it in one of my books because I think it is a textbook example of how to respond using all of those points that I gave before in terms of being able to weather a crisis. I think that they’re a brand who did a really good job.
A brand that didn't do a very good job is Papa John’s when it suffered a crisis of leadership. The head of the company, who not only was the CEO but also the face of the brand and when he behaved in a way that was not in accordance with the brand’s values there was significant backlash. Instead of being thoughtful and really classy and trying to take responsibility and use this as an opportunity to reinforce the Papa John's brand values, he started a fight with the management team and with the board of directors and with consumers and franchisees and things in general that aren’t a good look for the brand. So some examples of good and bad.
Bizzozero: OK, great examples and great information. For our listeners out there, Deb is also a author and best seller. One of her recent books is “Irrational Loyalty: Building a Brand That Thrives in Turbulent Times.” I encourage you to look up that book. So again, thank you so much Deb for being with us today. Brands have an awful lot to think about in this fast-paced world, and we hope everyone has a good crisis plan in place.