Today’s news brings us the cautionary tale of Butterfly Bakery, which is no doubt trying to find a cocoon to hide in after an onslaught of mostly self-inflicted pain. This is primarily a lesson on the importance of transparency, authenticity and speed in the age of 24/7 public scrutiny.
The short story: Butterfly Bakery, a small Clifton, NJ baker of special baked goods (e.g. sugar-free, no sugar added, gluten-free, etc), is suffering through its 15 minutes of fame courtesy of the FDA, which forced it to close its doors after discovering that sugar and fat levels in several of its muffin and cookie products were well above what was claimed on the label. Selected products had 3x the stated levels of sugar and 2x the indicated amount of fat. This has led to some explanatory statements on the BB Facebook page and caused the charming looking website to be taken down. The Twitter feed has also stopped.
So — what’s the big deal? Isn’t this just another case of the government unfairly picking on the little guys while ignoring ‘big business’? After all, only 3 products of 45 were cited.
Well, yes and no — but mostly no.
– it turns out that the original FDA complaint is almost 2 years old, and that BB was well aware of the issues. Here is an excerpt from their Facebook statement: “Butterfly Bakery, Inc. acknowledges the claims in the FDA press release dated March 13, 2013. Butterfly Bakery voluntarily entered into a consent decree and has been working with the FDA and a team of technical and regulatory experts since May 31, 2011, to improve its processes and ensure compliance with all Butterfly Bakery products”. [bold added]
– May 2011? Based on comments on their FB page, their customer base was clearly not aware of anything, and they are now suitably outraged. 2 years is plenty of time to reformulate, repackage, explain to customers, and flush out all inventory. An FDA inquiry would seem to have been a strong hint to watch nutritional claims closely.
A matter of health – these products draw heavily from diabetics and celiac sufferers, for whom safe, tasty treats are often difficult to find. BB’s products apparently tasted great, which is now not surprising since that’s largely what sugar and fat are for. So whether intentional or not, BB enticed customers with better taste, while simultaneously putting them in danger because of misleading labeling. This is not just a case of ‘I’m mad you didn’t tell me’, it’s a case of putting consumers at risk.
You never get a 2nd chance to make a first impression – – Butterfly Bakery has now gotten its first national publicity, which is hugely negative, and they will forever be associated with this scandal. They will immediately forfeit retail distribution and may have trouble regaining it. But perhaps most importantly, they have violated the trust of their most important constituency – their customers, which may be impossible to restore.
Collateral damage – – other unrelated Butterfly Bakeries have already had to start issuing disclaimers that this doesn’t apply to them. But clearly potential customers will have pause before buying from them.
The upshot: Hindsight is 20/20, but Butterfly Bakery could have positioned themselves most positively back in 2011 if they had acknowledged some inaccuracies in labeling, offered refunds, and pledged to a new level of scrutiny. They would have been seen as being committed to their customers. Now the opposite is true, and their options are limited. At least they have not made the mistake of trying to fight hand-to-hand on Facebook (see Applebee’s case).
The Armchair MBA 