By Anupama Chandrasekaran
CHICAGO (Reuters) - Last December, officials at pancake house chain IHOP Corp.IHP.N received notice that a gay and lesbian advocacy group would begin boycotting and picketing IHOP restaurants in San Francisco.
The reason -- an allegation that an assistant manager of a franchised restaurant had made derogatory remarks to a homosexual couple.
IHOP executives went into damage control mode. One of the company's vice presidents got ready to call a local television station. That's when he was told that it was just a drill.
"What we are trying to see is if all the processes that have been put into place are followed under fire," said the restaurant company's Chief Executive Julia Stewart, speaking at the Reuters Food Summit in Chicago this week.
While it takes years to build a good reputation as a corporation, it could take just seconds to send that image crashing down, industry consultants say. With food scares, increased activism and faster dissemination of news, food and restaurant companies are buckling up for a rough ride.
"We know that crises will hit at 5 p.m. on a Friday on a holiday weekend and you are not going to have your executive team hanging around the office waiting to respond to this," added Patrick Lenow, IHOP's spokesperson.
So U.S. corporations are trying hard to be ready for crises when they strike by holding mock crisis drills, learning to communicate quickly, setting up Web sites and avoiding interviews with tabloids that might give a sensationalist angle to a contentious issue.
"Everything moves faster in the Internet age," said Jeff Ettinger, chief executive of Hormel Foods Corp. (HRL.N: Quote, Profile, Research, Stock Buzz), maker of Spam processed pork and Dinty Moore canned stew. "When you work in small communities, you do have this feeling that no one is paying attention to a small town; but that we know is not the case."
Last year, while browsing a Web site that compiles news on the food industry, Ettinger found an article from the Paynesville Press of Paynesville, Minnesota, detailing the promotion of one of its employees in a town of 500 people.
"Clearly there's no such thing as local news," Ettinger said at the summit.
PERCEPTION, REALITY AND INFORMATION
The best solution in most crises is for companies to be first to communicate with the public, experts say.
"If the media picks up on it and makes it a public issue prior to people being lined up to say 'Here's the truth ...,' things start to look like inactivity or inertia, when in fact it really may not be," said Ken Harris, a partner at food and consumer products consulting firm Cannondale Associates.
"What is happening now is companies are erring on the side of disclosing more than less because the market demands it," Harris said.
And that's what Wild Oats Markets Inc. OATS.O is doing. The company regularly posts articles that are critical of food products or categories in its stores. Continued...
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