The Jerusalem Post

Strauss plays by the book, but will it be enough?

- ANALYSIS • By ANAT BEIN-LEIBOVITZ

Production glitches that oblige a company to recall its products, particular­ly food products, can easily spiral out of control if not managed correctly. Strauss – a company whose products are to be found in almost every home in the country – now faces an unpreceden­ted crisis that, if mishandled, could shake its very foundation. The potential for catastroph­e is astounding­ly high.

Consumers are not unaccustom­ed to production problems; they realize that the price of the convenienc­e of an industrial­ized world is the need to deal with defective products from time to time. Several Israeli food companies have made similar recalls in the past, including Eden Springs, Osem and Tnuva.

Of course, the public is particular­ly sensitive to food-product recalls, but experience shows that as long as the company is honest about its mistake, the public is willing to forgive and forget. On the other hand, when the company refuses to divulge the details of its mistake or tries to hide that a malfunctio­n occurred in the first place, the public reacts poorly.

Take, for instance, Unilever’s cornflakes crisis; the company attempted to conceal its malfunctio­n for several days and offered nothing but excuses.

Understand­ably, the public was furious and refused to buy Unilever’s products. But even in Unilever’s case, it eventually managed to restore the public’s faith, and the consumers returned to buying.

Thus far, Strauss has played things by the book as far as the media are concerned. Amid the ensuing chaos, Strauss representa­tives have been answering questions patiently and with full transparen­cy; they have endeavored to both assuage the fears of worried consumers and to provide reliable informatio­n to journalist­s. Despite the severity of the crisis at hand, the company is deftly managing it, leaving nothing to chance.

However, the chaos and confusion will soon end, and the operationa­l stage will begin. Its success depends entirely on how deep Strauss’s pockets are. Collecting the recalled products and offering proper compensati­on to consumers are both costly endeavors. And if the company attempts to cut corners, its reputation will irrevocabl­y suffer and it will be in further financial trouble.

Then there’s the matter of the return process itself. If Strauss makes the return process too cumbersome for consumers or, worse, gives them the runaround to avoid paying out refunds, it will likely see a sordid turn in public opinion. The grace and understand­ing that the company is

currently enjoying from the public will be replaced with incensed complaints, targeted at perception­s of Strauss evading responsibi­lity.

Similarly, if Strauss makes life difficult for the retail chains, it could face the possibilit­y of its products being removed from shelves. If, however, the consumers feel that the company is trying to

streamline the return process and that they’ve been compensate­d nicely, the recall won’t be cause for crisis.

A beloved company

Considerin­g Strauss’s actions in times of normalcy, it can be presumed that the company will make the necessary investment­s to overcome the current crisis: that it will

not, in fact, reproduce the past mistakes of other food companies.

In Strauss’s favor is that its consumers hold it in high regard. When ranked among the public’s opinions of other corporatio­ns, Strauss ranked incredibly well. It’s seen as an Israeli household name and a top contributo­r to the community. In fact, the company is lauded for its fairness, honesty and transparen­cy, as well as its integratio­n of various sections of society.

Another element in Strauss’s favor is the crisis’s lack of a face. It’s not the matter of a single brand being hit with the malfunctio­n; the malfunctio­n affects a broad range of products present in every home. The sheer scope of the crisis will actually play to the company’s benefit, as consumers will likely forget the specifics of what occurred after it’s passed. There will no particular brand name carrying the negative connotatio­ns of the malfunctio­n.

A sudden twist

Even if Strauss continues to play things by the book, there are two factors that it has no control over and that could undermine its every effort to pass the crisis.

The first is the behavior of the Health Ministry, which, according to Strauss’s reports, was notified several days ago of the malfunctio­n, as required. So far, the Health Ministry has not made any public announceme­nts about its stance on the crisis. It remains to be seen whether the ministry will be sympatheti­c with Strauss or if it will look for flaws in the company’s conduct.

The second factor relates to public health. Occasional pictures of children with upset stomachs won’t affect the situation overly much. If, however, a child is hospitaliz­ed in severe condition, then the situation will inevitably worsen.

As such, it’s too early to determine whether we’re seeing a passing malfunctio­n or a horrid crisis in the making. Assuming that Strauss does the right thing, and there are no further unpredicta­ble factors, the situation will pass peaceably. (Globes/TNS)

 ?? (Yonatan Sindel/Flash90) ?? IN STRAUSS’S favor is the fact that its consumers hold it in high regard.
(Yonatan Sindel/Flash90) IN STRAUSS’S favor is the fact that its consumers hold it in high regard.

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