South Dakota-based Beef Products Inc (BPI) is feeling the effects this month of what a series of negative media stories can do to a company’s reputation and to its bottom line. By the end of this week, BPI, a family-owned business, is expected to close processing plants in three states – Texas, Iowa and Kansas – and lay off about 650 employees – close to half of its total workforce. BPI's remaining plant in South Sioux City, Nebraska, is expected to continue to operate, but at a reduced capacity The company blames the closures and the job losses on a controversy concerning its meat product – lean finely textured beef (LFTB) – that critics and news reports have dubbed “pink slime.”
In a world driven by 24-hour cable news and social media, negative stories like “pink slime” almost always go viral. For BPI, the leading U.S. producer of LFTB, the unflattering stories started two months ago, with the publication of a March 5 piece headlined, "Partners in Slime" in The Daily, an on-line publication owned by News Corp. The article essentially covered the same ground as a 2009 Pulitzer Prize-winning series in The New York Times. But the story in The Daily, which derided BPI’s filler for ground beef as not only unappetizing but also potentially unsafe, took on a life of its own – in large measure due to the pink slime label. The story was immediately posted on Twitter and Facebook accounts across the country and was picked up by a blogger in Texas who started an on-line petition urging the USDA to halt the filler’s use in school food. It was also noticed by producers for ABC News. Within 24 hours, ABC had television packages about “pink slime” leading the newscasts on World News and Good Morning America. Once it hit the network, newspapers and ABC affiliates took notice, and social media sites were again abuzz with the dangers of “pink slime.”
The reality is that the lean ground beef filler that critics have dubbed "pink slime" is not only safe, it is approved by the U.S. Agriculture Department. As part of a common industry practice, the filler, which is made from fatty trimmings, is sprayed with food-grade ammonia hydroxide to help with the manufacturing process and curtail the growth of salmonella and E. coli. The process has been used for years and meets standards that have been set by the Federal Food, Drug, and Cosmetic Act (FFDCA). All of that was lost, though, if you happened to read or see a story on “pink slime.”
By mid-March, after series of reports on ABC and the ensuing public uproar over the filler, BPI had suspended operations at three of its plants. Despite a public statement from the U.S. Department of Agriculture that lean ground beef filler was safe to eat, two of the biggest U.S. supermarket operators, Safeway and Supervalu, said they would stop buying beef blended with BPI's filler. As a result, sales at BPI plummeted.
For BPI, the events in March that unfortunately have culminated with plant closings two months later, should serve as a hard lesson about business crisis communications.
When the story in The Daily first appeared, it should have set the firm’s communications team and its General Counsel’s office into action. Rebutting this negative story and protecting BPI’s reputation should have been a company-wide priority. While that may well have occurred, BPI’s immediate response was clearly ineffective.
BPI needed to reach out immediately to newspapers and television affiliates in Amarillo, Texas; Garden City, Kansas; Waterloo, Iowa; and South Sioux City, Nebraska – the cities in which BPI’s four plants are located. Here was an opportunity to tell their story and explain why the product that BPI produces is safe, is approved by federal regulators and serves an important function – killing bacteria such as salmonella and E. coli. The company should have also taken a proactive approach to dealing with the national media. ABC’s reports by senior correspondent Jim Avila were well-produced and fairly reported. However, BPI should have made every effort to get a company and industry spokesman on the network to assuage any health concerns that the public may have.
BPI also needed to quickly recognize the role that social media plays in getting the public’s attention. The story, which got its start on a news site only available on the iPad, had mushroomed into the blogosphere and become a national headline broadcast on ABC News. If BPI lacked an in-house marketing or communications team, it needed to quickly hire a firm that specializes in crisis communications. Close to three weeks after the “pink slime” story first appeared, BPI finally caught up with the social media frenzy and launched a website – beefisbeef.com – aimed at dispelling the false information about LFTB. BPI should have developed this website three years earlier when The New York Times series on LFTB was published.
Finally, BPI missed an opportunity to quickly get third-party advocates on board their campaign to fight these negative stories. Although the Governors of Nebraska, Texas, Kansas, Iowa and South Dakota eventually toured BPI plants –declaring LFTB as safe to eat – these visits came several weeks after dozens of media reports unfairly maligned BPI.
What happened to BPI should be instructive to any company that wants to prevent an event or circumstance from negatively affecting their business, reputation or brand. BPI’s crisis is unique because it wasn’t precipitated by a food recall or an outbreak of a food-borne illness. In fact, this perfectly legal product was deemed safe by the federal government. Instead, it was negative appellation --“pink slime” – that created the crisis. A critical component of any effective crisis response is to regain control of the emerging story. Unfortunately for BPI, its slow response to the damaging stories about its meat product has had a damaging – and perhaps lasting – effect on the company.
Source: Jon Decker, McDermott Will & Emery, Washington, D.C.
Jon Decker is a Senior Advisor at McDermott Will & Emery. As a member of the Firm’s Government Strategies Practice Group, he focuses on providing clients with strategic advice, particularly in crisis management.