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Communications Case Study
Lessons to learn from a product recall
In recent years, food and drink manufacturers as diverse as Cadburys, Premier Foods
and ABF have discovered food contamination, forcing them to announce product
recalls. These companies have all survived. Why? Possibly because they learnt from
Perrier how not to do it.
In 1990, Perrier was synonymous
with mineral water. An independent
French company over a hundred years
old, it was the leading brand in a
growing sector with a 15% share of the
U.S. market.
Then, on 6th February 1992, American
regulators in North Carolina discovered
bottles had been contaminated with
benzene, albeit in miniscule quantities
that would not affect human health.
No one suffered as a result of drinking
the benzene-contaminated water but
Perrier recalled 160 million bottles from
120 countries at a cost of over $250m.
Within 18 months, its market share had
declined to 9% in the U.S. and dropped
from 49% to less than 30% in the UK.
The shareprice fell by 37% and the
company was taken over by Nestlé.
Some 750 people in the mineral water
division were made redundant. By 1995,
Perrier sales had fallen to one-half their
1989 peak.
So what did they do wrong and what
crisis communication lessons can
PROs learn?
Perrier’s first error was its failure to
plan and specifically, to plan for the
right threats. Despite the publicity
around the Tylenol deaths in 1982,
Perrier did not have a crisis plan nor
did it have product recall insurance.
While Perrier’s US President Ronald
Davies took advice from former Johnson
& Johnson Chairman James Burke
over his handling of the Tylenol crisis,
Burke’s sage advice “Be straight” had
unintended consequences.
Perrier’s second error was to provide
information which turned out to
be incorrect. It therefore forfeited
the right to be heard as honest and
authoritative. Attempting to play down
the scale of problem also set the
media against them.
Perrier recalled 70 million bottles in been devastating for
North America on the 9th February – the company). So
three days after being alerted to the Perrier was forced to
issue. At the time, Perrier stated that reveal that while the
the cause was an isolated incident - spring is naturally
blaming a cleaner’s improper use of a carbonated, the
cleaning solvent on machinery filling water and natural
bottles bound for the USA for the carbon dioxide
contamination. gas were captured
Shortly afterwards, benzene- independently.
contaminated bottles were discovered Water was pumped
in Holland and Denmark. And since from the spring
this global product had only one single in one pipe and
source – a spring in Vergezes southern another pipe
France - Perrier had to announce brought the carbon
a worldwide recall and change its dioxide, mixing
explanation. the two at the
manufacturing
It turned out that the carbon filters
plant. CO2 naturally
intended to remove benzene from
contains trace
carbon dioxide gas had become
amounts of benzene
clogged and had gone undetected
and the clogged
for six months. So rather than being
filters were supposed
a victim of someone’s mistake, the
to remove it.
company was viewed as culpable
because of its own poor quality The consumer already believed that
control. the product was not ‘Pure’ because of
the benzene. In identifying the actual
But what really did for Perrier was
problem with the filters, Perrier’s
that in managing the contamination
statement had the merit of showing
crisis they caused a greater crisis by
the basic water was uncontaminated.
revealing that there was a deception at
But the disadvantage was that it
the heart of the brand.
showed that the product was not
Perrier’ advertising stated that Perrier ‘naturally sparkling’ mineral water.
was pure and its strapline stated With its product relaunch, Perrier was
“It’s Perfect. It’s Perrier”. Executives required to drop the words “Naturally
decided to withdraw the product Sparkling” from its label as the water
not because of any actual health was artificially carbonated.
implication but to maintain its brand
It took more than five years for the
positioning. The presence of benzene,
public to trust the brand again. In that
even in tiny quantities that posed
time a once totally dominant market
no threat to consumer health, was
position collapsed as other companies
incompatible with its purity claim. So
raced to fill the void left by the
far, so good. The recall could even be
product recall. Perrier’s experience
viewed as an act of corporate honesty.
demonstrates how poorly handled
However, Perrier needed to prove crisis planning and communications
that the spring water itself was not can seriously damage a product’s
contaminated (which would have brand and business.