Natural Foods Merchandiser

Cracking the nut: Finding opportunity in food safety awareness

Almonds are the new peanuts. That's the word from naturals retailers whose customers took this winter's food-safety crisis in stride, maintaining store loyalty even in the face of one of the deadliest food recalls in recent history. But those are the rare retailers who handled everything right—before and during the outbreak—and turned a tragic situation into an opportunity for retaining and building business.

It started last December, when people across the U.S. began reporting symptoms of salmonella poisoning—diarrhea, fever and abdominal cramps. At first, the outbreak elicited yawns—the Food and Drug Administration had traced the source to a peanut butter label sold mostly to nursing homes and schools but not directly to consumers. Days later, however, Americans found out that King Nut was just one of hundreds of brands produced by Peanut Corp. of America—a processor Nestlé had refused to use in 2006 after its auditors saw at least 50 mouse carcasses in and around the plant as well as a dead pigeon near the peanut-receiving door. Eventually, PCA recalled its products and was forced into bankruptcy, but not before nine people were dead and 683 sickened.

Shock and awe
"Your whole mission in this industry is built around your customers' health," says Nancy Flynn, director of marketing for Natural Grocers by Vitamin Cottage, a chain of 31 natural products stores based in Lakewood, Colo. The last thing retailers want is to have a product from their own shelves threaten customers' well-being.

"I was surprised how many products we had that were affected," says Michael Kanter, owner of Cambridge Naturals, just outside of Boston. "We carry peanut butter. What I didn't get was that this included organic peanut butter. I didn't calculate the number of bars we have that had to be taken off the shelf."

‘Don't screw around'
Those who've been through this say that once the initial stun wears off, it's critical to take swift steps to prevent illness, build trust and retain customers—but most important, to respond with integrity.

"You don't screw around with this. You do the right thing, you take responsibility, you do whatever it takes to make it right," says Stacey Brewer, who was a communications specialist at Odwalla in 1996, when that company's apple juice was found to be tainted with E. coli. "It's like your covenant with the public that you're going to put out a safe product"—or, in the case of retailers, sell a safe product.

"You have to treat every consumer contact very seriously even if they're questionable. … When people are scared, you need to deal with them on a human-to-human level."

Walking the talk
Natural Grocers quickly discovered just how important that approach can be. The chain had used organic peanuts from PCA's Texas plant for its freshly ground peanut butter, so even when only PCA's Georgia plant was under investigation, store officials voluntarily recalled their products.

"Any retailer's dilemma would be to not minimize the health effects and the illness and to communicate to consumers that they are going to be taken care of," without fanning the flames of fear, Flynn says. "In a crisis, your customers need you to stick to your core values. They need you to be there.

"You kind of look at it as an opportunity to build relationships with all the people involved—customers, employees, reporters," she says, both through actions at the retail level and in proactive media relations. "You don't want to appear defensive. You just want to provide the facts."

So Natural Grocers posted fliers in every store, informing consumers of the potential salmonella link; notified the FDA, the Colorado Department of Health and the local media; e-mailed the 20,000 consumers who subscribe to the store's e-newsletter; set up a telephone hotline with recorded information and the ability for concerned consumers to leave messages for the chain's owners; began sourcing organic peanuts from a new vendor, Hampton Farms; and perhaps most important, began testing every lot of peanuts the company receives, rather than the random testing it previously performed.

The result? "I don't think we were injured all that much by it," Flynn says. "I think [the hotline] got maybe three messages. We were getting responses from customers by e-mail and voice mail, saying, ‘We understand what you're doing and we think it's great, and just let us know when you're going to have peanut butter back on the shelf.' People have been through this before, so they set this aside and go get another brand, or another nut butter, for now and see what develops."

"I think customers will probably be more questioning in some cases."

The element of trust
Kanter says his experience at Cambridge Naturals was similar. "We've had few if any customers with fears or comments. Very few customers have even mentioned it. … My theory is that they trust us. They don't believe we would carry things that would be harmful. It's humbling that we've had so few complaints or fears expressed and it's a reminder to me that we want to keep finding out what the sources of our products are—not just that they're organic or fair trade, but that the people doing the manufacturing are to be trusted."

Getting down to nuts and bolts
"Trying to nail down where something went wrong is crazy-hard," Brewer says. "Look at how much stuff is co-packed. Plus, you have lots of co-packers handling things for a lot of different labels. … Even though some clients are more stringent, at the end of the day, it's still the co-packer who calls the shots."

The National Organic Program, for its part, is taking steps to crack that nut. In late February, the NOP told certifiers that, effective immediately, they should notify state and federal authorities when they see health and safety violations. In addition, the NOP stated that any company that fails to undergo or pass a health or safety inspection will not qualify for organic certification. So a company operating like PCA, which was not inspected by the FDA for eight years, would have its organic certification revoked—a move that, in a nutshell, may lead consumers to have greater faith in the safety of organics over conventional foods.

Some in the industry feel that the growth of private-label products has also led to complications. Michael Straus, of San Francisco-based Straus Communications, notes that while organics has led the way in creating transparency in the food industry, the whole point of private label is nontransparency.

"I think customers will probably be more questioning in some cases," Flynn says, "and will ask retailers: ‘Where is your private label from?' They want to know where their produce is coming from, so this may be the next generation of transparency."

"I think something good always comes out of things like this," Flynn says. "It raises public awareness. This is an opportunity for us to show the quality control we have."

The silver lining
If the organics industry continues to emphasize safety, integrity and farm-to-fork transparency, crisis-weary shoppers may turn to organics even more—and happily turn almond butter into the next big trend.

Laurie Budgar is a freelance writer in Longmont, Colo.

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