Well, neither, actually, thank you. If you’re talking about things that we’d rather not see in our food, you can add melamine to the mix. All three caused quite a commotion when stories broke revealing their presence in the food supply.
In that respect they have similarities; in other ways they couldn’t be farther apart. In all cases, the media played a key role.
First, a brief recap (if you’re up to speed, skip to the meat of this post below).
Melamine – – an organic compound, used to make familiar things like Formica, dinnerware, laminate flooring, and white boards. Melamine also is toxic, and can falsely indicate high protein content in foods. These characteristics came together with tragic consequences in 2007 and 2008, when Chinese-sourced infant formulas and pet foods that had had their protein counts ‘boosted’ with melamine led to six infant deaths and hundreds of thousands of injuries, as well as a lot of killed or harmed pets.
Pink Slime – – known more commonly in the meat biz as Lean Finely Textured Beef (‘LFTB’), is ground-up low-grade meat byproducts that has had the fat removed, and was approved in 2001 for use as a filler at up to 25% of ground beef content. In 2012 a scandal arose when it became known that as much as 70% of the ground beef sold in the US contained LFTB but was not required by the USDA to be identified on labels. While not posing any health risk, public outcry focused on the fact that with no label disclosure consumers were not able to make informed decisions.
Horsemeat — just this week, An Irish meat processor recalled 10 million burgers from supermarkets across Ireland and Britain amid fears that they could contain horsemeat, a discovery that poses no danger to public health but threatens to harm Ireland’s important beef business. While the concept of horsemeat is not particularly appetizing to a US culture that idolized Seabiscuit and Mr. Ed, apparently that’s not a universal feeling. In fact, according to Food Manufacturing, “much of Europe happily consumes horsemeat as a delicacy. Still, ‘The Irish are known for their respect of the horse, and they’re not used to eating horses,’ the French newspaper Le Figaro explained Wednesday to its readers.”
How are these three things similar? Easy: with all of them we were served a nasty surprise regarding our food, which is never going to go down smoothly.
How are these different? Well, in a few ways.
1) Benefits/Dangers – – Melamine is toxic, period. It provides no benefit in food other than to increase profits for the producer. LFTB is clearly not harmful, although it has less protein than the beef it replaces. On the other hand, it helps reduce beef’s fat content, which is good, and can help reduce retail prices of ground beef, a benefit generally appreciated by consumers. Horsemeat is similar to LFTB in that it is not harmful, but in this case it seems to have been secretly added to ground beef solely in an effort to increase profits.
2) Outcome of the scandal – – Melamine – – boycotts of Chinese products worldwide, 21 convictions, including 19 long sentences and two death sentences in China. On the plus side for consumers, it has led to longer-term enhancements in food supply chain testing and security. LFTB – – as a result of the media frenzy, several beef processors went bankrupt, eliminating thousands of jobs and driving higher prices at the shelf. Horsemeat — still unfolding.
3) Role of the media — with melamine, the media was essential in uncovering the scandal and demanding quick action and accountability. With LFTB, the media seemed less interested in pushing for the public good than in fanning hysteria (and circulation) using the irresistible ‘pink slime’ nickname. Certainly without that name there would have been far less outrage. With horsemeat, the media is somewhere in between – – apparently staying mostly objective and reporting the facts, so far.
What is the meat of the matter here? What are lessons for producers and retailers?
–> With the broad footprint of upstream suppliers and the highly dispersed market for downstream finished products, there can be no such thing as too much supply chain traceability and security, and with access to the right information, consumers will increasingly be willing to pay for safety. Manufacturers and retailers have a potential danger in the event of an ingredient scare, but also an opportunity to use traceability and source of supply as differentiating advantages, by simplifying sourcing, and investing in supplier audits and shipment tracking automation.
–> Consumers will continue to demand transparency regarding what’s in their products. Manufacturers and retailers will need to increasingly provide it to stay competitive. To some extent this is not easy; research shows that consumers often have a knee-jerk reaction to the sound of an ingredient (e.g. ‘pink slime’) without bothering to know the facts. But pink slime is a very obvious example; there are more subtle perception dangers even with very useful ingredients (propionic acid is naturally occurring and helps prevent bread mold; alpha tocopherol is just another name for Vitamin E; and ascorbyl palmitate is an antioxidant and nutrient; etc.). Claims like GMO-free can provide a marketing benefit but can also generate significant added costs. Country of Origin Labeling (COOL) is a great concept but can get murky depending on where a product is grown, processed or packed. Net, providing transparency is a worthy goal but it is still very tricky and will require ongoing management.
–> Social media has helped create a situation where consumers act immediately on rumors and don’t want to wait for facts, which puts all producers at greater risk of a Pink Slime-type incident. In some ways, this is a risk that is hard to mitigate. The best advice would be twofold: 1) err on the side of greater disclosure of ingredients so the message can be proactively managed; and 2) in the event an ingredient issue surfaces, use the same social media to immediately acknowledge the problem, present the facts, and communicate what the company is doing about it.
–> The media must remember that with its power comes a responsibility to maintain objectivity, balance and context in reporting the news. A pink slime-type episode, where sensationalism trumps perspective, can make for interesting copy, but can also have real consequences for real people.
The Armchair MBA 