Don’t get caught flatfooted when a recall crisis hits

Recalls have been in the news quite a bit of late, and no company ever wants to be in the media spotlight having this conversation.

The unfortunate situations, however, raise the importance of companies having crisis plans in place to deal with such recall scenarios. Getting caught flatfooted when a story of this size breaks can cause significant damage to the brand.

Below are a few cornerstone elements for a crisis plan. But any strategy is only as good as employees’ readiness. So it’s imperative that marketing communications and public relations teams regularly review and drill on plans.

• Get ahead of the story. In our digital world, news is breaking fast and from multiple channels. So companies that feel they can sit on a story, do so at their peril. As soon as an issue is discovered, get in front of it utilizing all media tools available. The caveat to this is that, while multiple channels will be utilized, the company needs one gatekeeper controlling the flow of all information. This ensures consistency of message. The only thing worse than no information being released, are details that trickle out from multiple company sources. 

• Communicate a plan. Know what the company is going to do to address the problem, and communicate it. This is the active part of the plan that helps a company steer the conversation. Good plans will highlight what the company is doing to assess why the situation occurred, as well as a focus on key steps involved in managing the recall. Plans also should emphasize the safeguards being put in place to prevent the need for a similar recall in the future. Step outside your company role and anticipate what consumers and media really want to know, versus what the company wants to say. 

• Admit the mistake. This seems like a no-brainer, but it’s surprising how many companies can’t utter the words “we are sorry.” Again, use the mediums available to your company and make it a part of all communications. Something as simple as a 30-second video clip of a company president apologizing can have a major impact, provided he or she comes across as natural and unscripted.

No company wants to face a major recall. However, having a plan in place with three simple elements – control the story; communicate your plan; and apologize – will help protect the brand in the marketplace.

NFDM Prices Present Significant Profit Opportunity

Lower your production costs and your profits will increase. This is why companies do all they can to leverage the best prices on raw materials.

Food product manufacturers are doing this today, taking full advantage of Non-fat Dairy Milk (NFDM) powder prices that are at five-year lows. This low point is an opening for companies to utilize an asset-based line of credit to stockpile the commodity. But food product manufacturers aren’t the only ones who can benefit.

The down market also presents a fantastic opportunity for savvy NFDM manufacturers and traders to hedge. Given the right financing terms, setting aside product now for a later sale can pay significant dividends in the months ahead.

Consider this scenario. Powder is selling today for roughly $1 per pound. Let’s say a company was able to secure advantageous finance terms, which came out to $.02 per pound every three months. If the price of NFDM were to increase to $1.15 in three months, that’s $.13 of profit per pound.

Now what if NFDM rallied within a year to its 3-year average of $1.60? Subtract the $1.08 in finance costs, and the profit becomes $.52 per pound.

All of this depends on a financing mechanism that not only gives companies highly competitive rates, but also is agile enough to put them in a hedging position now, while the market is at a low point. The old adage holds true – time is money.