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Nestlé in the middle of the Buitoni storm: analysis of…

Nestlé makes the same mistakes as Lactalis in the face of the contaminated infant milk crisis. Lack of responsiveness, transparency, and mobilization, strategy of denial (“There is no proven link between our products and the poisonings that occurred”) then of doubt (“Nestlé took 75 samples from the manufacturing line concerned and in the whole factory, “all negative”) … all the boxes for failed crisis management are checked by the Swiss giant as complaints multiply.

After the publication, by RMC, of ​​shocking images and testimonies of former employees of the Buitoni factory in Caudry (Nord) where the pizzas of the “Fraich’Up” range are produced and while the health authorities accuse him of being the cause of the E.Coli bacteria poisoning of dozens of children and the death of two of them, the Nestlé Group, one of the largest food companies in the world, is not up to the basic requirements of crisis communication whose six global strategic brands Nestlé, Nescafé, Nestea, Maggi, Buitoni and Friskies represent 70% of the Group’s sales.

The brand’s attitude is so far removed from the standards of crisis management, that the announcement by the Paris public prosecutor’s office of the opening of an investigation for deception of merchandise, sale of corrupt or falsified and harmful food products for health, endangering others, injuries and manslaughter, manslaughter is not surprising. It is now a communication under judicial constraint that the brand will have to deploy in order to control the reputational risk.

41 children present today with haemolytic and uraemic syndromes, while 34 other cases still require investigation. The victims are all children aged 1 to 18 and two of them were killed.

With this dramatic and worsening human toll, the giant Nestlé is going through the most difficult period in its century-old history.

The company mismanaged the crisis unlike other international giants, including the French Perrier and the American Johnson & Johnson (Tylenol) which survived slippages in the past thanks to appropriate crisis communication.

The crisis will be costly for the giant’s insurance and for its stock market value, which risks being brutally reduced given the communication errors that are unlikely to reassure its audiences and the families who legitimately expect precise answers.

For Nestlé, this is the worst crisis in its century-old history.

The immediate costs of this crisis can represent several tens of millions of euros borne by Nestlé insurance in terms of crisis management and compensation for the damage caused.

How will insurance companies react when Nestlé’s attitude has undoubtedly already contributed to aggravating the consequences of the crisis and therefore the damage to be compensated?

But this estimate only includes the costs of recalling and destroying pizzas at risk, as well as the temporary closure and complete cleaning of the factory, not to mention the support for the victims and their families.

The Nestlé factory will undoubtedly reopen. But, taking into account the poorly mastered crisis communication, who will want its products, and all the others labeled Fraich’up?

Moreover, what will be the damage of this crisis of the Nestlé brand in the eyes of consumers and investors? And even towards the majority of its products which have nothing to do with the contaminated Buitoni factory?

It is by being open and transparent to correct the crisis situation that a manufacturer allows his consumers to see his efforts and regains trust in his brand. Everyone knows that there is no consumption without risk, but everyone needs to be assured that everything is done by the manufacturer to identify and fight against the occurrence of these risks.

A model of anti-crisis management

The company has reacted beyond what it was required to do until now. How will consumers see it? Some will fear the risk and decide to avoid Nestlé products.

The shortcomings observed in the management of the Buitoni crisis are staggering. The food giant Nestlé should obviously have better managed the crisis caused by the presence of e-coli in its pizzas. Is this linked to a faulty identification of risks? Is it linked to a lack of anticipation of the crisis? Is it linked to irregular crisis management exercises?

One of the basic rules when a case of contamination occurs is to react quickly, which Nestlé surprisingly did not do in this case.

It was the health authorities (DGS, Public Health France and the DGCCRF) who, given the industrialist’s communication attitude, were forced to draw out the link between the consumption of pizzas and the state of health of young people. victims. Nestlé zero, when the best way to manage a crisis is to act, not to react. In this case, the company was not proactive.

Christophe Cornu, CEO at Nestlé France, has never appeared in front of the media, for example. Didn’t children’s lives deserve mobilization at the top of the company?

Here we have what seemed to become a crisis within a crisis. We had the feeling that Nestlé tries to preserve the highest leader as long as possible because after him, there is no one left to intervene. Failure to involve the CEO means giving rise to the feeling in public opinion that the company is underestimating the seriousness of the crisis or that the worst is yet to come. Michel-Edouard Leclerc and Guillaume Pepy, whose attitude the French appreciated during the crises, embody a more virtuous model than that of Nestlé.

Everyone can also deplore the slowness of an expanded recall in order to reassure consumers. Isn’t the potential loss of healthy products less serious than the sale of contaminated products?

Another bad point. Nestlé did not recognize from the outset that there was a problem. It costs a lot less to do that than to try to sweep the problem under the rug.

It is better to lose your money than to lose your reputation. Reputation is one of a company’s most valuable assets.

Nestlé did not recognize its responsibility from the start, no doubt so as not to expose itself to legal action, which is a serious strategic error because you can win a case in court and lose it in public opinion, and vice versa. .

The crisis is not over and could well get worse in the coming days. They will now have to properly supervise the victims.

There is also a risk of crisis by amalgamation. Other companies in the sector, competitors of Nestlé, could be affected if consumers decide to forego all frozen pizzas.

About LaFrenchCom:

Created in 2010 by Florian Silnicki, LaFrenchCom is a French crisis communication consulting agency. LaFrenchCom counts among its customers the world’s largest public and private organizations. He accompanies his clients through image and reputation crises. LaFrenchCom’s services thus revolve around three main activities: crisis communication, crisis management and communication under judicial constraint. With a network of clients and partners on a global scale, the agency, which has 28 employees and generates more than half of its turnover internationally, offers its clients cutting-edge and recognized expertise. LaFrenchcom has also been designated for several years among the best crisis communication agencies in France in 2020 in the Leaders League ranking.

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