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Commentary
A Tale Of Two Food Crises

How Divergent Strategies Led To Dramatically Different Results

By Gene Grabowski and Richard S. Levick

They were two remarkably similar sets of circumstances occurring in the same part of the country and within the same frame of time — and yet the differences in outcome were stark enough to provide lessons in crisis communications as fundamental as any ever gleaned from the highest-profile product or environmental disasters.

Both crises involved contaminated raw ingredients in made-to-order items served by food-service chains. Both companies were the victims of their suppliers and of conditions beyond their control. But the difference in how the two organizations responded resulted in textbook examples of product liability crisis management — and mismanagement.

Two Crises

By now one of the stories is widely known. Four people died and more than 650 others were sickened after eating at a Chi-Chi’s restaurant in the Beaver Valley Mall in Monaca, Pennsylvania, a town in the western part of the state. The cause was Hepatitis A from apparently contaminated green onions imported from Mexico.

The other case, while not so broadly reported in the news, threatened to severely damage a convenience store chain based in Western Pennsylvania. Last July, more than 400 customers who ate deli sandwiches with lettuce and tomatoes at Sheetz stores along the Pennsylvania Turnpike were sickened with Salmonella poisoning.

At first, both chains responded swiftly and appropriately to their respective crises. Louisville, Kentucky-based Chi -Chi’s immediately closed its Monaca restaurant, cooperated fully with the investigation by the Pennsylvania Department of Health, and offered to pay medical costs for anyone harmed after eating its contaminated food.

Likewise, Sheetz expressed concern for its customers, offered to pay medical bills, and cooperated fully with the state and federal food and health authorities.

But then the two companies took the strikingly different paths that led to such strikingly different ends.

To be sure, along with the basic similarities in these crises, there was an important difference. Hepatitis A, in the Chi Chi’s crisis, is a liver disease spread in raw or undercooked food contaminated by the feces of an infected person either through improper food handling and preparation, or through contact with tainted water. Symptoms include jaundice, fatigue, abdominal pain, loss of appetite, nausea, diarrhea, and fever. Its effects can be prolonged and they can be fatal, as they were for the four Chi-Chi ’s patrons.

Salmonellosis, in the Sheetz case, is an infection caused by salmonella bacteria contaminates in food or water and generally causes diarrhea, fever and cramps for up to three days. It is not often fatal, although it can be if it spreads to the bloodstream or intestines, as is possible in victims with impaired immune systems, or in children and the elderly. Because people usually fall ill quickly and don ’t stay sick long, Salmonellosis outbreaks, unlike Hepatitis A, tend to run their course quickly.

Clearly, then, the public health and legal ramifications of the Chi-Chi’s situation are greater than in the Sheetz case. The definitive business issues at stake were nonetheless the same for both companies.

Most important, from a communications and crisis management standpoint, the potential damage to both companies was incalculable — and protracted. In fact, both companies are still negotiating with plaintiffs’ attorneys who have led individual and class-action suits against them.

Show Me, Don’t Tell Me

Right from the start, Chi-Chi’s made a critical communications mistake common among big corporations facing product liability lawsuits. In an effort to minimize risk, Chi-Chi’s top executives avoided direct contact with the news media. All communications with reporters came through antiseptic one-page statements that had a crisp “just-the-facts, ma’am” feel.

When Chi-Chi’s Chief Operating Officer Bill Zavertnik did finally arrive in Monaca more than two weeks after the outbreak was confirmed last November 3, he read a brief statement to reporters, took no questions, and then returned to corporate headquarters.

From that point forward, communications from Chi-Chi’s and its parent company, Prandium, in Irvine, Calif., came chiefly in the form of news releases and prepared statements written in language designed almost solely to avoid exacerbating the class-action lawsuits against the restaurant chain.

By contrast, when news of the Salmonella outbreak streaked across the Associated Press wires, Sheetz executives promptly arranged interviews with local TV, wire service, and newspaper reporters. Owner-executives Steve, Stan, and Travis Sheetz answered every question, described the facts as they knew them, and personally pledged to help all customers who were made ill.

Sheetz family members and store managers — who were quickly media-trained to handle interviews — also took the extra step of patiently posing for pictures and video eating their stores’ sandwiches, complete with lettuce and tomatoes. Often, they would talk to reporters while munching their own food, delivering their credible message points in plain English.

For example, Mike Magner, the company director of safety and risk, told local reporters that none of the Sheetz employees complained when they were asked to stay through the night to sanitize all of the food-handling equipment in the stores.

“On Wednesday, when we found out there’s a particular strain of Salmonella associated with those tomatoes, we said ‘Let’s get rid of all of them.’ That’s why we’re confident to say it’s safe to eat at Sheetz,” Magner said in an interview with the Pittsburgh Post-Gazette.

The immediate result was that Chi-Chi’s initially lost credibility with news reporters covering their story while Sheetz was lauded for its efforts. Research analysis of stories about both incidents during their respective first months shows Chi-Chi on the defensive and answering charges by plaintiffs’ attorneys. Meanwhile, stories mentioning Sheetz were twice as likely to be focused on positive steps the company was taking to aid injured customers and protect future patrons.

In truth, both companies tried to convey the same messages and were largely acting in much the same manner behind the scenes. But it was the way in which they showed that action to news reporters and to the world that made the critical difference the perceptions of the general public — and of potential jurors.

Chi-Chi ’s executives mainly relied on words to convey what they were doing, while Sheetz executives demonstrated their commitment by traveling to meet face-to-face and on-site with customers as well as with print and broadcast journalists.

Reporters for the wires services and local newspapers did say that Chi-Chi’s Zavertnik was available for long-distance telephone interviews in the aftermath of the crisis. Even then, however, the company’s actions were largely invisible to consumers and fell short of the personal touch that can make all the difference in a product liability case.

By showing they weren’t afraid to face the public and by expressing in their own words what they were doing to correct matters, members of the Sheetz family demonstrated their values and their commitment to the community.

Chi-Chi’s could have learned from Coca-Cola’s similar mistake in 1999, when former CEO Douglas Ivester waited nearly two weeks before visiting Belgium after traces of dioxin were reportedly found in Coke products there. Though the scare was later proven to be vastly overblown, industry analysts say the company ’s failure to show its commitment to protecting consumers contributed directly to a $105 million loss in sales.

Enlist Allies To Help You

Almost as soon as the reports of food-borne illness surfaced at Chi-Chi’s and at Sheetz, state and federal health officials investigated the affected sites and found that neither food service chain appeared to be responsible for the outbreaks. But again, differences in how each company leveraged that preliminary information offers an important lesson in crisis communications.

Sheetz cultivated credible allies to help tell its story to the public, while Chi-Chi’s stoically went it alone.

On its Web site and in all of its public utterances, Sheetz was careful to use words that clearly indicated the company was acting responsibly and cooperating — not just complying — with state and federal authorities. In their statements, Sheetz often quoted those authorities, allowing their credibility with the public to rub off on the company.

Between news interviews, Sheetz executives were in direct contact with FDA investigators and state health officials in Pennsylvania and surrounding states, personally seeing to it that government examiners had unlimited access to their facilities. In turn, those authorities, including Pennsylvania Agriculture Secretary Dennis Wolf, sometimes mentioned Sheetz favorably when speaking with reporters.

Sheetz took the further step of sharing media statements beforehand with state and federal officials. By so doing, they reassured those officials that they were being kept in the loop, which further increased the likelihood of supportive public statements from credible authorities.

The outcome was subtle, but effective. When state officials hadn’t yet identified the source of the Sheetz outbreak — later determined to be Roma tomatoes — the Pennsylvania Department of Health stressed that employees had done nothing to contaminate the food. “We didn’t find any problems with cooking or hygiene in the stores,” news reports quoted department spokesman Richard McGarvey as saying.

As part of its strategy, Sheetz also understood the importance of industry trades. In fact, the company went out of its way to send messages through trade newspapers and magazines that cover food retailing and restaurants. They briefed those publications on the search for the source of contamination and they provided contacts for government spokespeople likely to offer favorable comments.

The salutary results included a story in Progressive Grocer, an industry magazine, which reported: “The Altoona, Pa.-based retailer was ‘very quick to respond,’ a Pennsylvania health department spokesman told Progressive Grocer. The chain pulled the lettuce and Roma tomatoes suspected of causing the illness, switched produce suppliers, and disinfected its sandwich counters at more than 300 stores in Pennsylvania, Ohio, Maryland, West Virginia, Virginia and North Carolina.”

By contrast, reporters covering the Chi-Chi’s outbreak were too often forced to fill their stories with speculation from critics and disinterested government officials because the company’s statements were incomplete or its executives would not provide a comment.

Too often, the Chi-Chi’s statements were used by the news media in a way that reinforced the company’s defensive posture. At best, Chi Chi’s looked like a victim of circumstances rather than a responsible company that was actively ensuring the welfare of its customers. As a result, they were missing out on the opportunity to transform a crisis into a positive opportunity.

Here’s an example from a company statement in early November, 2003:

“We learned this morning that the public health authorities have made a preliminary determination that a shipment of green onions was the likely origin of this outbreak, which has infected over 500 people in the region, including 13 Chi-Chi’s employees. We are gratified by the comments made at today ’s news conference by the health authorities. They confirmed that Chi-Chi’s employees were not the source of this incident, that there was nothing we could have done to prevent the outbreak, and that this is an isolated incident.”

With no allies and no clear plan of action, Chi-Chi’s won little sympathy from the media or from consumers. As a result, the company is unlikely to win sympathy from jurors either.

Think Like A Consumer

President John F. Kennedy was fond of pointing out that the Chinese word for crisis comprised two characters: one representing danger, the other, opportunity. When confronted with a litigation crisis, most companies tend to focus on that first character and ignore the second.

In time of crisis, of course, a company is highly vulnerable in both courts of law and the court of public opinion. But the period during and immediately after a crisis is the time for an organization to solidify its connection to its customers, to varnish its brand, and to show the world what it’s truly made of. Johnson & Johnson’s handling of the Tylenol poisoning scandal nearly 20 years ago remains the gold standard for the transformation of crisis to opportunity.

While each crisis is different and requires innovative thinking and judgment to navigate specific twists and turns, one piece of advice should guide any company in such situations — think like a consumer! For example:

• Pick the right spokesperson. Often the messenger is more important than the message. Often the messenger is the message. In most food-borne illness cases, the best person for the job usually is the company’s top scientist. To win audience empathy, consider someone on the team who looks and lives like a member of that audience — a mother? a father? a foreman? On the other hand, when the company ’s fate is on the line, it ’s the CEO who must step up and deliver.
• Make sure your spokesperson is trained to handle questions from the news media and deliver messages that resonate with consumers. Winging it is a sure-fire recipe for catastrophe.
• Write messages that strongly assert what the company is doing to handle the crisis and how it plans to make things better for consumers after it’s over. Act sympathetically, yes, but also act responsibly.
• Don’t over-reassure, but let consumers know that the company has been through difficulties before and emerged stronger to serve its customers. It’s going to happen this time, too.
• Don ’t wait for the news media to call and put you on the defensive. Reach out to reporters and deliver your messages. Use television when you can, because pictures are the best way to communicate emotion. Shape the news, don’t simply react to it.
• Be honest. If the crisis is hurting your business, admit it. But immediately state what you’re doing to turn things around.
• Coordinate your communications strategy with your legal strategy; don’t subordinate it. Consumers see right through legal language and legal machination. They dislike both.

While it’s still too early to tell what the final outcomes of their crises will be for Chi-Chi’s and Sheetz, some consequences of their actions are evident.

Chi-Chi’s, already in bankruptcy when its outbreak occurred, agreed this summer to pay $2 million in the 60 largest lawsuits to people who’d been sickened. Hundreds of additional claims are expected to be settled for tens of thousands of dollars apiece.

In court documents, Chi-Chi’s cited a “drastic decrease in business sales ”at its Pennsylvania restaurants as well as a significant drop in sales at virtually all Chi-Chi’s locations nationwide. Talks are underway for other food chains — none to serve Mexican cuisine — to take over the ailing Pennsylvania restaurants.

News reporters who covered both episodes refused to be quoted for this article because they are continuing to cover the cases. But the four contacted said they believed Chi-Chi’s made things harder for itself and that the company’s reputation is gone for good in Pennsylvania.

As for Sheetz, no stores have closed. Its customers have returned. Those who have called into local radio talk shows to threaten law suits against Sheetz are being pooh-poohed by members of the news media defending the convenience store chain.

These two similar and painful episodes serve as ready examples for the next companies that face a product liability crisis. Their leaders only need the resolution to apply the clear lessons.

Richard S. Levick, Esq., rlevick@levick.com is president, and Gene Grabowski, ggrabowski@levick.com, is a vice president, of Levick Strategic Communications, which has directed the media in the highest-profile matters, from Napster and Guantanamo to the Catholic Church controversy and the Rosie O ’Donnell Rosie magazine lawsuit. Mr. Grabowski was also Vice President of Communications and Marketing for The Grocery Manufacturers of America, the world ’s largest food trade group representing brand-name food, beverage and consumer-product companies. Their latest book, Stop the Presses: The Litigation PR Desk Reference, is available at Amazon.com. Copyright by the authors 2005. Replies welcome.