« May 2008 Table of Contents 
Case Study: Damage control
When bad headlines hit, provide answers - fast
By Lisa Duchene
May 01, 2008
When headlines piled up over the past year about toxins in
fish farmed in China, consumers nationwide took note. Russ
Casteel, seafood merchandiser at Haggen's, operator of 33
supermarkets in Washington and Oregon, saw sales of Chinese
tilapia drop dramatically following New York Times reports in
late 2007 that the fish is raised in polluted waters and fed
illegal drugs and pesticides.
While the seafood industry refuted the newspaper's report,
that mattered little to Casteel's customers, who stopped buying
tilapia. He took swift action, working quickly with Haggen's
suppliers to source tilapia from Ecuador instead of China
(tilapia was the only species the retailer sourced from the
country). The Food and Drug Administration, which last July
began detaining imports of Chinese farmed basa, catfish,
shrimp, eel and dace (a carp relative) because of drug
residues, did not take action against Chinese tilapia. Even so,
once he saw the drop in tilapia sales, Casteel was concerned
that consumers would believe all seafood from China was
unsafe.
"We're just trying to be a
consumer advocate in our
business place," says Casteel, "and take precautionary steps
and go beyond what the government expects of us to make sure
customers get the best quality of seafood."
Casteel's response was precisely what supermarket
loss-prevention experts recommend retailers do when news of a
recall, toxins or other negative news make headlines: React
quickly and tell your customers about it.
Besides failing to act when tainted food is at issue, the
next-worst thing retailers can do is neglect to tell customers
what action the store took to protect them, says Dan Raftery,
president of Raftery Resource Network, in Antioch, Ill., who
counsels retailers on damage control and reducing losses.
"The negative connotations that go on with a lack of
communication can very easily be greater than the actual
negatives of the situation," says Raftery.
Another common mistake retailers make is not addressing the
issue fast enough, he says. "You've got to have a plan in place
and in shape that includes different levels of communication
response. You have a 24-hour period [following headlines] in
which to respond."
De mand is great among supermarkets for Food Marketing
Institute trainings in how to best deal with recalls, says Bill
Greer, FMI spokesman. [See SFB April '08 Trend Watch, p. 38,
for more information on handling recalls]. American shoppers'
confidence in the safety of grocery store food dropped to 66
percent in 2007 from 82 percent the previous year, according to
FMI research conducted in January 2007.
The FDA issued about one dozen seafood-related recalls or
warnings between January 2007 and March 2008, none of which
captured national attention like the issues over Chinese
seafood and a January New York Times story that mercury levels
in sushi from five of 20 Manhattan establishments tested higher
than 1 part per million, the level at which the FDA can pull
fish from the market. (The National Fisheries Institute
countered that the story was unfair and inaccurate.)
Regardless, headlines often get the attention of typical
seafood consumers, who tend to be middle to upper class,
well-informed and well-educated.
"Our customers are extremely educated," says Marty Gaul,
seafood buyer/merchandiser at Heinen's, a 17-store upscale
grocery chain in Cleveland. "So when something happens we will
get the calls."
Customers often ask about methylmercury, and Heinen's
employees tells them the benefits of eating seafood outweigh
the risks and "everything in moderation" is a wise rule to
follow. Heinen's handles each question and often receives
positive feedback from customers on how it has answered their
questions and concerns, says Gaul.
Heinen's holds regular training sessions for its seafood
managers and associates. In case of a problem, Gaul is the
information conduit, tracking down and relaying information to
everyone.
When retailers face a recall or news over toxins in seafood,
says Tom DeMott, COO of Encore Associates in San Ramone,
Calif., the biggest mistake is not taking the issue
seriously.
"The retailer needs to be asking those questions before the
customer comes into the store asking those questions," says
DeMott. "I'm the buying agent for the consumers that shop in
the store. They're seeing and reading and watching the same
news that everybody else is watching and they're going to have
questions. It's not so much whether I believe it or not. My
position is not to defend the industry. My position is to take
care of my customers."
DeMott's advice:
• stay on top of information;
• know in advance who in the company will comprise an
emergency team in the event of a recall. The team should
include people from the company's public relations and legal
departments;
• take appropriate action;
• make decisions about whether to take voluntary action,
such as sourcing around the product of concern;
• arm associates with information about whether you still
carry the product and why; and
• follow up with stores as an issue unfolds to gauge the
level of customer concern and, if necessary, tweak the
message.
Some retailers are taking a proactive stance on mercury.
This spring, Haggens plans to launch a mercury-testing program
with Safe Harbor, a testing company in San Rafael, Calif. On
Haggens' behalf, Safe Harbor will test a sample of every 25- to
50-pound case of finfish and crabs the retailer sells. The
products, which will be tested at the supplier level, represent
90 percent of the seafood in Haggens' case. At point-of-sale,
they will bear Safe Harbor-certified signage, indicating
mercury is below a level that varies by species and is stricter
than that of the FDA, according to Safe Harbor. Brochures will
also be available to consumers at Haggens' seafood departments
to explain the mercury testing, says Casteel.
Bristol Farms near Los Angeles and Holiday Quality Foods in
Northern California are among other retailers using Safe
Harbor's seafood testing.
Haggens is investing in mercury testing on behalf of its
customers and to ensure their confidence in purchasing seafood
at its stores.
"To us, that's worth the value," says Casteel.
Contributing Editor Lisa Duchene lives in Bellefonte,
Pa.