Crisis management – China style

Reputation and brand are often seen as being two sides of the same coin. In people businesses, where I have spent much of my career, its actually the same thing. An intangible brand is simply a reflection of its reputation and the basis for all products, services and an accumulation of experiences across all touch points.
 
In consumer goods, its perhaps less complicated but its as much if not more important. And when there is a problem, especially with contaminated food, the problems is a crisis.
 
Heinz in China has chosen to recall four products that it has found to have unacceptable levels of lead. China is particularly sensitive about baby food as there was a scandal related to milk back in 2008 when some babies tragically died.
 
Thankfully Heinz noticed the problem and acted before there was a tragedy. The milk scare as well as other concerns over meat quality in certain burgers have recently focused the attention of Chinese consumers on the whole length of the somewhat complicated supply chain of goods and they are now more attuned to the issues and are fast to react in store and to switch to alternative products.
 
The question is will this have a negative impact on the Heinz brand in China? Will consumers see the logo and buy an alternative product? My children are long past needing baby food, but when I walk around the shops the range of baby products on offer and brands offering them is as broad as in the UK.
 
Europe has had its fair share of these things over the years. Perrier Water doesn’t seem to have ever recovered from its crisis of a few years ago whilst Nestle, the largest food company in the world clearly has.
 
It will be interesting to see how Heinz re-builds trust in China and how quickly consumers allow them to do so.

Another factor here is the digital landscape in China where news spreads at lightening speed on the net and netizens are already commenting and asking for alternatives. In China a small rumour can be fanned by questions and concerns into a full blown PR crisis in a matter of hours. Heinz will react quickly but the damage is likely to be significant. Brands take years to build but can be destroyed very quickly, particularly in China where Weibo and WeChat are already hot with commentary and concern.