Horsemeat scandal: Can brands like Findus recover?
- 12 February 2013
- From the section Business
Horsemeat is a tough sell, even for the the most revered advertising executives.
In the US TV series Mad Men, 1960s ad man Don Draper is asked what a client should do when its popular brand of dog food is found to contain horsemeat - much to the disgust of its customers.
"Change the name," he says. "The name has been poisoned."
Amid the current horsemeat scandal, the question is whether names like Findus are now toxic.
Findus is the most prominent brand so far named in the scandal, which has linked big-name supermarkets in the UK and France to abattoirs in Romania via meat suppliers in Ireland and Cyprus.
The frozen ready-meal maker has been a firm fixture in the UK for more than 50 years, and the company had global sales of more than £1bn ($1.5bn) in 2011.
Those sales are likely to plunge in the aftermath of the scandal.
Its beef lasagne has been taken off the shelves after being found to contain up to 100% horsemeat, and analysts warn its wider sales of processed meat will suffer.
"It's not just Findus that is going to suffer here, it's the processed beef brand more generally," said Vince Mitchell, professor of consumer marketing at Cass Business School in London.
"We are increasingly trusting supermarkets when we buy processed meat, so that failure of trust will mean a knock-on effect. That is where the damage is to come."
But branding experts say the future of Findus depends on how the company responds the fallout of the scandal.
Shailendra Kumar, founding partner of the UK-based branding agency Equilibrium, said apologising should be an important part of the company's response.
"The situation is recoverable," he said. "As long as they put out their message of contrition and are seen to be acting on it, they will recover quite quickly."
If this is done effectively, he said, the scandal should not bring the Findus brand down.
"Of course there has been some damage to the brand, but they are a big brand in the food industry," he added.
"It's a bit like the Perrier scandal - they found benzene in the water but within a year their market share was back to where it was."
Benzene was found in bottles of Perrier mineral water in 1990, forcing the recall of 160 million bottles from markets worldwide, and provoking criticism of the firm's handling of the situation.
Prof Mitchell argues that it is the handling of the crisis, rather than the crisis itself, that will affect whether consumers continue to trust the Findus brand.
He pointed to the BP Gulf of Mexico oil spill in 2010, when chief executive Tony Hayward was roundly criticised for his slow response.
"People do forget. In the BP crisis what sticks in people's minds is not the specifics of the disaster, but the way the company responded to it."
The fact that the horsemeat is not believed to be harmful is a blessing, analysts say, and should limit much of the reputational damage. Findus initially described the horsemeat problem as simply "a labelling issue".
Other brand experts argue that the horsemeat scandal is simply not grave enough to hurt Findus, with its long history in the frozen food market.
"It's a very established name that's been around for a long time. I think it will take time, but I think they will get over it," said Stephen Izatt, managing director of the brand consultancy Thinkfarm.
"They have to be completely transparent now, they have to lay out what they have done and convince people that they have learned from the experience."