This week Down Under

Aussie firms must take crisis planning more seriously

By RJ Whitehead

- Last updated on GMT

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Insurance coverage across the food industry is inadequate, leaving many manufacturers exposed in the event of a crisis.

According to a survey for the Australian Food and Grocery Council, compiled by risk management specialist Victual, many businesses are in decent shape to weather a product recall, but others are still vulnerable to substantial costs if something goes very badly wrong. 

Among the most worrying findings of the survey, just 59% of companies regularly review their recall plans, while a third either have no designated spokesman or their spokesman is not trained in crisis communications.

It comes at a time when recalls have been steadily increasing, mainly following the detection of undeclared allergens and microbial contamination.

"We have seen time and time again that a poorly managed recall has the potential to turn quickly into a crisis, affecting a company’s reputation and bottom line​," said report co-author Peter McGee, adding that this is especially relevant when issues are rapidly amplified by social media.

Instead, companies must have specialist insurance to "transfer the risk of a product recall escalating into a crisis​" and have access to "specialist resources to guide the recall process​,” McGee said.

Putting the average global cost of a recall at US$10m, the survey found that almost two thirds of Australian food and beverage companies had insufficient insurance to cover a recall.

Besides insurance, companies should also prepare and protect themselves from corporate crises in other ways, the report recommended. These include:

  • Devising a robust system for monitoring customer sentiment, centred on social media.
  • Implementing small, relatively cheap measures, such as reducing batch quantities and storing batch samples, which can lower recall costs.
  • Tracking raw materials through the supply chain to pinpoint any source of defects.
  • Effectively communicating product and packaging changes between suppliers and retailers to reduce the risk of unexpected product issues.
  • Introducing a robust and practised recall and crisis management plan.

More from Down Under... 

Australian dieters fall into five personality groups 

Australia's biggest ever diet and personality survey has identified the categories the country’s weight watchers typically fall into. 

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According to a survey for the Australian Food and Grocery Council, compiled by risk management specialist Victual, many businesses are in decent shape to weather a product recall, but others are still vulnerable to substantial costs if something goes very badly wrong. 

Csiro, the government research agency, found that Australians are likely to have one of five "diet personalities​", based on a survey of more than 90,000 Australian adults.

The most common type, the "Thinker​", comprises 37% of the population. Thinkers tend to over-analyse their progress and have unrealistic expectations. This can result in a sense of failure and derail a diet.

The "Craver​", applicable to 26% of Australians, finds it difficult to resist temptation. Nearly one in six of all Cravers are obese.

The third group, the "Socialiser​", represents about one sixth of the population. Food and alcohol play a big role in the Socialiser’s active social life, so flexibility is key to maintaining a healthy diet.

Representing 16% of Australians, the "Foodie​" is most likely to be a normal weight. Passionate about food, this type has the healthier diet with a high variety of vegetables in their diet. Alcohol makes up one-third of their discretionary food and beverage intake.

Finally, there’s the "Freewheeler​", accounting for 4% of the population. These are spontaneous and impulsive eaters, and have the poorest quality diet. With a higher proportion of men in this group, Freewheelers avoid planning meals and over half are obese.

According to Csiro behavioural scientist Sinead Golley, knowing one’s diet personality could provide an explanation as to why past weight loss attempts have failed.

One in five Cravers have tried to lose weight more than 25 times and say that chocolate and confectionery are the biggest problem foods to resist​,” Dr Golley said.

On the other hand, people with the most common diet personality type—known as the ‘Thinker’—tend to have high expectations and are often perfectionists, giving up when things get challenging​.”

Dr Golley said she and her researchers found some interesting food personality trends across generations.

Baby boomers and those aged 71 years and over are more likely to be Socialisers and Foodies, suggesting lifestyle and social connections influence a person’s eating patterns at different stages of life.

Millennials and Gen Xers, meanwhile, are more likely to be Cravers, Thinkers and Freewheelers. 

We also found younger people commonly used fitness trackers and apps to lose weight, while older generations turned to diet books and support groups​.”

Taco Bell hopes third time will be lucky in Australia

Taco Bell appears to have put previous setbacks behind it and is is set for an imminent return to Australia.

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The Yum! Brands-owned Mexican fast food chain last pulled out of the country in 2005. 

It had previously re-entered the market seven years earlier after abandoning an experiment in the Eighties when a Sydney restaurant won a court case over naming rights. 

Collins Foods, which runs a number of KFC stores and Sizzler within Australia, has the rights to the Taco Bell name there.

In a statement, Collins said a former Sizzler restaurant in Annerley, Brisbane, will be the launch location.

[We are] currently recruiting for staff for the new restaurant, further details will be announced closer to the restaurant opening​.”

The Australian Mexican fast food segment is already dominated by the established franchise chains Guzman y Gomez, Mad Mex and Zambrero.

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