Woolworths SA: Something in the Yoghurt Mix (with Epilogue)

Author :

Amanda Bowen; Russell Abratt

Pages :

7 + 2

Product Type :

Background note

Reference # :

WBS-2009-18

Teaching Note :

Institute:

Wits Business School

Setting:

Cape Town

Year:

2008

Keywords:

Reputation management, crisis management, marketing

Summary/Abstract:

Woolworths SA: Something in the Yoghurt Mix In May 2008, alerted by a primary dairy supplier that one of its raw material suppliers may be including gelatine in its products, Julian Novak, divisional director of food at Woolworths SA , tasked his team to investigate the issue. The allegations proved to be true. There was gelatine in Woolworths’ entire yoghurt range. In 2003, the company had agreed to ensure that its yoghurts were free of gelatine (a product derived from meat sources), and had therefore advertised them as such. One of the foundations of the Woolworths brand was its reputation for being trustworthy. Novak knew that there would be an outcry if this crisis was not handled correctly. He wondered how to act to preserve the company’s reputation, and what action the company should take against the supplier. Woolworths SA: Something in the Yoghurt Mix Epilogue When Woolworths discovered that one of its raw material suppliers was including gelatine in its yoghurt products, the company knew not to delay in taking a decision. “In this business, when you find something that’s gone wrong, we immediately work to contain and address the problem. In 30 to 40 minutes, a decision has been made,” said Karin Carstensen, food scientist and technical manager: legal and policies at Woolworths. “It’s just the process of communicating the decision that takes a bit longer. We really don’t take very long to make a decision like this. It’s made within minutes or hours, not days.” Julian Novak, divisional director of food at Woolworths SA, assembled a crisis committee and decided to recall the product. All decisions about product recalls went through the company secretary, Cherrie Lowe, who then made the final decision to recall the product, in consultation with the board. Woolworths then immediately contacted the Beth Din , the relevant halal organisation and the vegetarian society and made them aware of the recall. These organisations then informed their members. In addition, the company contacted the media and issued a press release.