Defying a Reputational Crisis - Cadbury's Salmonella Scare: Why are Customers Willing to Forgive and Forget?

In late June 2006, Cadbury Schweppes, the world's largest confectionary company, had to recall seven of its branded products in the UK and Ireland due to the possible contamination with Salmonella Montevideo. Salmonella can cause a severe case of food poisoning, and leads to extensive diarrhea and vomiting. However, the food company had known of the possible contamination as early as January 2006, yet did not inform health authorities. The company was castigated in the media by the Food Standards Agency (FSA), and lambasted for their negligence. Only then did the company decide to issue a recall of over a million affected products. The company decided not to issue a recall in January as they felt there were only minute traces of salmonella present. Despite the FSA declaring Cadbury's products posing an 'unacceptable risk to the public', Cadbury's crisis management strategy to the food poisoning was counterintuitive to the traditional crisis management mantra of being open, honest and responsive. The handling of the crisis was at odds with current crisis management thinking. This crisis case study raises some very interesting questions and implications in the management of a food safety crisis and of crises in general. Does admission of guilt affect a firm's reputational integrity? Did short-term profit maximization objectives override long-term reputational objectives of the firm? Did the positive brand equity and favorable reputation of Cadbury's insulate the firm from the full impact of a crisis? Would others have survived such a scandal? Did the food contamination scare and the handing of it jeopardize the future of one of Europe's best-loved brands? What lessons can be learned for crisis management and reputation managers? Cadbury's market share quickly returned to pre-crisis levels, due to a number of reasons, but the long-term repercussions of the scare still reverberate around the image of Cadbury's.