The reputation of food and drink companies is tied more closely to legislation and regulations than any other industry. Brittany Golob investigates

They say you are what you eat. Meat, potatoes, fruit, veg, maybe a bit of chocolate. For millions of people this year, that list has unfortunately grown to include a tasty morsel or two of horse. The overwhelming crisis that has unfurled since January has left no link in the supply chain untouched.

Though the horsemeat scandal has betrayed consumers trust in brands, the crisis is symbolic communications in the food and drink industry.

In any business, trust is the basis of brand and reputation. Scott Guthrie, marketing director of the Tayto Group, says, “You have to live up to the promise that you give and make sure that you’re delivering on that promise.”

In pharmaceuticals, trust may derive from a drug achieving its intended effect. In financial services, trust reflects quality of service. In the food and drink industry, trust is rooted in quality products and confidence in the supply chain; likely why UK retailers not implicated in the horsemeat scandal attempted to prove to customers the quality of their products by communicating faith in their suppliers.

The supply chain extends from farming to transportation to storage, and everywhere in between. For that reason, Hubert Grealish, partner at MPERA and former head of brand communications at Diageo, says quality is a shared initiative between suppliers and large corporations, “We know that the lowest common denominator is where the weak spot is.”

Guthrie says, as a family-owned business, Tayto’s relationship with its suppliers is fundamental, “In our business, it’s about the personal relationship. If you look at the philosophy of this business, it’s about the family making a promise to its consumers. We have to be very mindful of what we’re giving to our consumers, and that’s an important message.”

Not all companies have such symbiotic relationships with their suppliers, however, as horsemeat has exposed. Hilary Ross, head of the food sector group at DWF, a law firm specialising in food and drink, says the communications between retailers and suppliers has been unregulated and inconsistent. “I think a lot of retailers realise that they had very good information and understanding of their immediate suppliers but might not understand where ingredients were coming from down the chain,” she says. “There’s an element of trust there that’s now gone.” Sam Gregory, MD of Tangerine B2B, agrees, “Brands are going to have to put effort in to build that trust back up. That is going to come through communications.”

One solution is to increase regulations within the chain and impose standards across the industry, a solution which public affairs consultancy Interel’s director general in France, Florence Maisel, says is not productive. The solution, she says, is transparency and communication.

Another means of addressing the inefficiencies in the supply chain is what British bottler and glassmaker Cobevco has done – integrate multiple services into one offer. The manufacturer addresses the inefficiencies in the supply chains by providing a one-stop-shop for foreign vintners seeking British distribution, eliminating collaboration with multiple suppliers, promising self-sufficiency and efficiency and promoting trust in the finished product.

Marketing director Fiacre O’Donnell says, “The whole concept behind the factory itself is that we can make the glass on site, store the bottles on site, fill the containers, put them in warehouses under bonded storage and transport those pallets down the road to market. The whole idea, cost and environmental impact has been lessened.” By streamlining the process, links can be removed from the chain, leading to increased efficiency and fewer opportunities for weakness to permeate.

Effective communication and trust in the supply chain is the foundation upon which reputation is built in the food and drink industry. “It all comes down to communication,” associate director of health and public affairs at Fishburn Hedges, Holly Rouse, says. “It comes down to what relationship that you actually have with your suppliers.”

Building on that foundation, food and drink companies must also address the cross-cutting and overlapping legislation, regulations and cultural differences that govern the industry.

The food and drink industry is one of, if not the most, regulated. Many cite the industry’s emotive quality as a driver for intense media and public interest in the goings-on of companies in that space. In Britain, a history of packaging and food safety issues has led to somewhat strict oversight and heightened scrutiny on the part of the media. The mad cow crisis of last decade and the issues surrounding accurate labeling of products – á la Danone – contribute to those phenomena.

Grealish points to horsemeat as the latest in a long history of food regulation issues stemming from low standards in the supply chain. In fact, the latest scandalous news from the industry is that nearly one-third of fish entering British markets is mislabeled and of a poorer than expected quality.

Regulation – of labeling, of safety, of quality – has been both implemented and explored in response to communications issues within the supply chain. But, Grealish says regulation is only effective when companies adhere to quality standards. He says rules and regulations must be easily understood by suppliers and retailers alike, “You can’t regulate for good behaviour, as in good parenting. More regulation may actually make it harder to implement all those rules and regulations. It has to be practical and pragmatic.” Regulation directly influences quality and confidence throughout the chain.

In Britain, regulation of the food industry is a blend of legislation and voluntary standards. The drinks sector is different, however. Nine of the largest British drinks companies sponsor the Portman Group, which regulates the industry via a code of ethics that all drinks producers and licensees must adhere to alongside an independent regulatory body, both of which regulate alcohol marketing. Sarah Hanratty, head of communications at the Portman Group, says, “It is in every drinks producer’s interest to ensure that we have a sustainable and responsible industry. Nobody wants to be regulated by government because it’s more costly, it takes longer and it costs tax payers more. We have a clever, effective, independent and relatively transparent system”

The opt-in style code of ethics guarantees quality marketing and quality products, thus ensuring retailers’ and consumers’ trust in both the product and the brand.

There is industry-wide consensus on at communications are key to building trust in the supply chain and that attention to producing quality foodstuffs is on par with attention to safety. Ross says food and drink lawyers are already responding to the horsemeat scandal by redrafting companies’ contracts with suppliers to both enhance transparency and to ensure quality throughout the chain.

While regulations are important, however, reputation is built on an additional framework of safety, confidence and quality. “Reputation is almost beyond laws and regulations, Rouse says. “Laws and regulations are there to ensure the safety of a product, but reputation is about how the product was made, who made it and where it was made and all those more complex questions that aren’t regulated for but have a reptuational standpoint from the multitude of stakeholders.”

Alongside institutional checks, food and drink companies must also adhere to cultural influences. Guinness, for one, uses a number of different recipes in different regions around the world in order to cater to local tastes. In Nigeria, barley is banned, forcing Guinness to brew its signature stout with sorghum, a grass-like cereal crop. Southern Comfort’s entrée into the British market tapped into one of Britain’s greatest pastimes – talking about the weather – with a nude, slightly rude weatherman.

Tayto’s Golden Wonder brand, which has a long heritage in Britain, but is being reintroduced by an Irish company, launched an awareness campaign driven by its crisp packet colouring differing from the now more-established Walker’s tableau. Though only the Irish Sea separates the two countries, in food culture, that may be an insurmountable chasm if a company does not communicate effectively.

Gregory says a brand must establish its place within local culture prior to expansion, “A company must understand how its offer fits within that and engage the target audiences as well as possible to create brand loyalty.”

Culturally, many European consumers had little problem with horsemeat itself. The crisis has galloped across Europe leaving a wake of distrustful consumers and damaged supply chains in its wake. Yet, the industry has responded by engaging another of the areas in which it has a unique stake – politics.

The food and drink industry, likely because it is intrinsically tied to local values, consumers and economies, has a long history of both participation in and cooperation with government. Some countries, like Ireland, have dedicated bodies through which to regulate and communicate. While the An Bord Bia is not unique, it is uncommon among EU countries, many of which – including those from where the horsemeat originated – rely on EU legislation to provide industry standards.

Alongside institutional bodies lie trade unions and lobbying organisations that work within politics on behalf of the food and drink industry.

In Britain, trade unions, lik the Society of Independent Brewers, are the primary actors for drinks companies as few are large enough to carry the political clout that Sainsbury’s or Tesco has in Westminster. Rouse says this helped the beer lobby prevent the taxation of beer and win a major battle in the form of one penny a pint. Grealish says that this relationship can become beneficial for all links in the chain, “We need a very simple, clearly articulated version of the regulations that everyone can buy into. Government should look to business as a partner.”

The confluence of business and politics is the premier level of influence on reputation in the industry. Beneath that lies brand management and attention to local customs. Beyond that are the rules and regulations that structure, standardise and oversee an emotive and complex industry. But at the core of the industry lies the supply chain.

The chain in which communications must be transparent, the chain that determines corporate trust in its products and consumer trust in a brand, the chain that ensures quality. Or delivers crisis.

Despite the horsemeat crisis shattering both trust and confidence in the supply chain, the way forward can be forged through a joint effort of business, government and suppliers. “If you do a good job in quality and confidence you tend to tick all the boxes of regulators and you tick all the boxes of your customers too.

Regulation can actually help us collectively weed out the charlatan from the true heroes,” Grealish says.

Confidence in the supply chain is tantamount to reputation. That confidence derives directly from quality and transparency throughout the chain. After all, the food and drink industry’s reputation is only as strong as its weakest link.