Crisis

Cadbury™’s Crisis Case Study: A Lost Classic

Richard Levick |

Cadbury™’s Crisis Case Study: A Lost Classic

In a July 6 column for Forbes.com, I analyzed Chipotle™’s handling of its food contamination crisis within the context of a classic case study in crisis communications: Johnson & Johnson™’s exemplary management of the 1980™’s Tylenol tampering case. Chipotle has some way to go before it is out of the woods; nevertheless, it has pursued a smart strategy, committed itself to transparency, and taken a number of constructive steps to restore its trust and credibility with customers, regulators, and stakeholders.

There™’s another corporate crisis case study that, in my view, has become something of a “lost classic,” as the radio d.j.™’s say. Cadbury™’s 2003-2004 handling of its product contamination crisis in India merits careful study from crisis counselors.

The crisis erupted after certain Cadbury chocolate bars were discovered to be infested with worms. The Indian equivalent of the FDA quickly seized the chocolate stock at Cadbury’s manufacturing plant as evidence for its high-profile investigation. Cadbury’s sales in India plummeted by nearly 30 percent in the wake of adverse media coverage.

Even while the company was under siege, Cadbury made itself accountable as it conveyed empathy to the victims and launched a comprehensive education initiative covering nearly 200,000 of its retailers around the world.

Initially the company™’s response may have been too passive. Once the matter escalated, however, Cadbury acted decisively. It immediately suspended its advertising campaign and focused its efforts on educating retailers on safety and hygiene. It kept the media updated through detailed press releases on the specific measures it was taking to correct its manufacturing and storage processes. It also overhauled the machinery and packaging processes of its most popular product lines.

After the company™’s infrastructure had been fixed, Cadbury resumed its aggressive advertising. At that point, the company’s relationship with the media had significantly improved; its new media campaign was well received by key constituencies.

Within 60 days of the implementation of its new packaging processes, Cadbury™’s sales had nearly reached pre-crisis levels. The company announced eight months after the incident that its consumer confidence metrics were back to normal. Today, Cadbury maintains its position as the top chocolate bar seller in the Indian marketplace.

No institution or individual caught in the throes of a crisis emerges unscathed. Inevitably, mistakes get made and the brand takes a hit. The key is to learn from those mistakes and institute a regimen to ensure that they never get repeated. Cadbury and J&J did that brilliantly. Chipotle is positioned to do the same.

Richard S. Levick, Esq. is Chairman and CEO of LEVICK, a global strategic communications and public affairs firm.

Richard Levick |

Cadbury™’s Crisis Case Study: A Lost Classic

In a July 6 column for Forbes.com, I analyzed Chipotle™’s handling of its food contamination crisis within the context of a classic case study in crisis communications: Johnson & Johnson™’s exemplary management of the 1980™’s Tylenol tampering case. Chipotle has some way to go before it is out of the woods; nevertheless, it has pursued a smart strategy, committed itself to transparency, and taken a number of constructive steps to restore its trust and credibility with customers, regulators, and stakeholders.

There™’s another corporate crisis case study that, in my view, has become something of a “lost classic,” as the radio d.j.™’s say. Cadbury™’s 2003-2004 handling of its product contamination crisis in India merits careful study from crisis counselors.

The crisis erupted after certain Cadbury chocolate bars were discovered to be infested with worms. The Indian equivalent of the FDA quickly seized the chocolate stock at Cadbury’s manufacturing plant as evidence for its high-profile investigation. Cadbury’s sales in India plummeted by nearly 30 percent in the wake of adverse media coverage.

Even while the company was under siege, Cadbury made itself accountable as it conveyed empathy to the victims and launched a comprehensive education initiative covering nearly 200,000 of its retailers around the world.

Initially the company™’s response may have been too passive. Once the matter escalated, however, Cadbury acted decisively. It immediately suspended its advertising campaign and focused its efforts on educating retailers on safety and hygiene. It kept the media updated through detailed press releases on the specific measures it was taking to correct its manufacturing and storage processes. It also overhauled the machinery and packaging processes of its most popular product lines.

After the company™’s infrastructure had been fixed, Cadbury resumed its aggressive advertising. At that point, the company’s relationship with the media had significantly improved; its new media campaign was well received by key constituencies.

Within 60 days of the implementation of its new packaging processes, Cadbury™’s sales had nearly reached pre-crisis levels. The company announced eight months after the incident that its consumer confidence metrics were back to normal. Today, Cadbury maintains its position as the top chocolate bar seller in the Indian marketplace.

No institution or individual caught in the throes of a crisis emerges unscathed. Inevitably, mistakes get made and the brand takes a hit. The key is to learn from those mistakes and institute a regimen to ensure that they never get repeated. Cadbury and J&J did that brilliantly. Chipotle is positioned to do the same.

Richard S. Levick, Esq. is Chairman and CEO of LEVICK, a global strategic communications and public affairs firm.

  • [blog_shorcode_show]