ConAgra Faces Tough Sell When Peter Pan Returns After Recall

Sunday, April 15th 2007, 5:16 pm
By: News On 6

OMAHA, Neb. (AP) _ When Peter Pan peanut butter returns to stores in July, some consumers' first thoughts will undoubtedly be about this year's salmonella outbreak and total recall of the brand.

``I would be hesitant'' to buy Peter Pan, college student Kevin Akerson said while grocery shopping in Omaha recently.

The company that makes Peter Pan, ConAgra Foods Inc., will have to find ways to convince consumers like Akerson that its peanut butter is safe.

But consumers like Audrey M. Wright, who have missed Peter Pan since it disappeared from stores in mid-February, give the company hope.

``We had to throw out a jar of Peter Pan with regrets,'' said Wright, who was shopping in the same west Omaha Hy-Vee grocery store Akerson was. ``I like ConAgra.''

The Omaha-based food company won't discuss the details of its Peter Pan marketing plan for competitive reasons, but ConAgra is eager to win back consumers after the outbreak that sickened more than 400 people and spawned numerous lawsuits.

Marketing experts say ConAgra would do well to study the examples of companies that successfully dealt with past recalls by being forthright, like the makers of Tylenol did in the 1980s. But ultimately, ConAgra simply needs to reassure consumers and deliver a safe product.

``When people own up to it, Americans forgive,'' said John Lord, professor and chairman of St. Joseph's University's food marketing program. ``When they don't, we get upset.''

The division of Johnson & Johnson that markets Tylenol set the standard for dealing with brand crisis with the way it handled the 1982 cyanide tampering scare in Chicago.

J&J removed 264,000 bottles of the painkiller from Chicago stores and offered replacements to consumers. The company offered prompt updates and developed tamper-resistant packaging to prevent any recurrence. The recall cost J&J about $100 million, but the public regained confidence in Tylenol quickly.

The Tylenol example gets brought up often because the manufacturer handled it so well, said Joe Marconi who teaches marketing at DePaul University in Chicago. But companies should be careful about following that example too closely because Marconi said it may appear insincere and formulaic. For example, he said featuring the CEO in advertising during a crisis can backfire.

``It's been done so many times that it appears less effective,'' Marconi said.

But Lord said it's the companies that refuse to discuss and take responsibility for a problem that often have trouble regaining consumer trust.

ConAgra officials have revealed what they think caused the problems at their Sylvester, Ga., plant. Chief Executive Gary Rodkin has repeatedly apologized and pledged to settle claims quickly.

``We put consumer safety first with no compromise,'' Rodkin said during a call with investors last month.

ConAgra officials said they believe moisture in the company's peanut butter plant likely helped salmonella bacteria to grow and later infect the finished product. The moisture came from a roof leak and a faulty sprinkler head that triggered the plant's fire sprinklers twice, and the salmonella likely came from the raw peanuts. But they can't be entirely sure what caused the problems.

So ConAgra plans to do more than just eliminate the source of the moisture. The company said it would renovate the Georgia plant to make sure there is greater separation between raw peanuts and the finished product.

While those repairs are being made, ConAgra has arranged for another company to make Peter Pan, but it refuses to name the other company.

ConAgra also plans to change its testing routine for peanut butter to ensure the product is safe.

But with several major outbreaks of food contamination in the past year, Lord believes many American consumers are skittish.

``Right now we're a country that's pretty squirrelly on food safety issues,'' Lord said.

That's where history may be on ConAgra's side, according to Marconi, who wrote ``Crisis Marketing: When Bad Things Happen to Good Companies.''

``The biggest and best thing Peter Pan has going for it is it's one of the older brands. It has an established track record,'' Marconi said.

Marconi said the Peter Pan label needs to carry a message that lets consumers know ConAgra stands behind the product and that the peanut butter inside is new.

A simple message like ``certified pure'' combined with a satisfaction guarantee on the label might be enough for most consumers, Marconi said.

``You have to reassure the public that the problem you had has been corrected,'' Marconi said.

For consumers like Elizabeth Morrison, ConAgra's pledge to clean up and renovate its peanut butter plant might be enough. Morrison said she's not going to worry about her peanut butter much unless there is a pattern of problems.

``These things can happen anywhere,'' Morrison said.

But other consumers like Teresa Neff may need more convincing.

``It does make you concerned about your entire food supply,'' Neff said.