Last month a customer at an outlet of US fastfood chain Wendy's claimed to have found a severed finger in her food. The news spread like wildfire, fuelled by intense media interest, and Wendy's sales suffered. Since then, the company has gone all out to win back its reputation. David Robertson reports on the lessons the food industry can learn from such a situation.

When US fastfood chain Wendy's discovered last month that one of its customers had been munching on a severed finger instead of chili, executives throughout the company must have realised they had entered food-industry hell.

Undoubtedly the single worst crisis a food retailer or producer can experience is a public health scandal. When the banned food dye Sudan 1 was recently discovered in hundreds of foodstuffs in the UK, manufacturers had to recall vast quantities of product and then immediately find new suppliers before sales were too badly damaged.

However, because the problem was so widespread (and the health dangers so minimal) the brands involved bounced back quite rapidly. Indeed, most consumers in the UK have probably now forgotten which products and brands were affected.

Time is of the essence

But when a single food retailer is the source of such a scare it can be devastating. In 1993, US-based fastfood chain Jack-in-the-Box had a bad outbreak of E.coli and four children died. As a result, the company, which had revenues of hundreds of millions of dollars a year, was nearly ruined. The Jack-in-the-Box outbreak rammed home to retailers just how vulnerable they are to this sort of health scare. When a single outbreak can bring a company within a whisker of bankruptcy, executives need to know how to respond.

Dr. Steve Iseman, professor of communication arts and public relations at Ohio Northern University (near Wendy's HQ) told just-food: "Food companies are so vulnerable because food is something that is common to everyone - we all eat.  Also, a lot of what happens in the food industry is based on confidence - we count on the folks that prepare our food to do it right - and our confidence is easily shaken."

In the modern media age, PR experts believe companies have just hours to regain the public's trust after an event like this, or risk losing consumers forever. Given the headline-worthy nature of the Wendy's chili-finger story, the company had to get on the front foot fast before consumers started abandoning the chain in droves. And although the woman involved has now been charged with attempted grand larceny the publicity damage was done the moment the story broke. The way Wendy's has handled the problem is an interesting lesson for all those in the food industry.

Human remains

On 22 March, Anna Ayala of Nevada was in a Wendy's store on Monterey Road, San Jose, California. She claimed that she had ordered a cup of chili (ingredients: ground beef, beans, tomatoes and seasonings) and when she took a spoonful discovered that she had bitten into a (manicured) fingertip. The 3cm long finger had evidently been ripped from some poor victim's hand and when Ayala realised what she'd bitten into she vomited.

"Just knowing that there was a human remain in my mouth… it is disgusting. It is tearing me apart inside," she told ABC News. Ayala hired a lawyer and threatened to sue Wendy's for the emotional distress the incident caused her. Meanwhile, news outlets around the world picked up the story and gave it prominent coverage. The incident has also become a favourite joke for comedians (meaning that the bad publicity is reaching an even wider audience than just those who pay attention to the news).

San Jose police interviewed all the Wendy's staff members at Monterey Road and they even took lie detector tests to determine whether any of them were responsible - they weren't. Forensic tests are now being conducted to establish whether the finger was cooked with the chili or added post-production.

Quick response

For Wendy's, which sells more than six million meals a day, the publicity has been horrific. Sales in the store involved, and throughout Northern California, have been drastically hit (resulting in $2.5m in lost sales, according to charges laid against Anna Ayala last week). Across the US sales were down between 3.9% and 5.1% in the month to 6 April (although this will largely be due to other factors, these numbers do include two weeks' worth of the "finger effect").

"This has been a terrible ordeal," Bob Bertini, spokesman for Wendy's International told just-food. "All of us in the Wendy's family and particularly the independent franchisees in the San Francisco area have been devastated by this. It has generated a tremendous amount of negative publicity and it has hit sales hard in stores in that area. Obviously our brand reputation has been affected nationally and we are determined to find out what happened."

This determination has defined Wendy's response to this crisis and it has impressed PR experts. Dr. Steve Iseman said: "It seems to me that Wendy's has done a good job with this.  They've responded quickly, provided accurate information and they have not appeared to cover up or distract attention from the story.  Also they have not speculated about things that they weren't sure of and in a story like this one there are many opportunities to do that."

Reward for information

As in politics, the cover up or failure to reveal information quickly is often what upsets the public most, and Wendy's has been swift to act. Within days the company had tracked down all the ingredient suppliers and established that none had reported any finger-related accidents - such events have to be reported by federal law. A full check of all Wendy's employees also drew a blank. Then, on 7 April Wendy's offered a $50,000 reward for information in the case and last week that was bumped up to $100,000. That is a huge sum of money just for information on a missing finger but it demonstrated the lengths Wendy's was willing to go to in order to re-establish its reputation.

Bertini says: "Throughout this whole endeavour we have sought to do the right thing. We have cooperated fully with the police and we are so determined to find the source of the contamination that we have offered this reward, set up a free-phone hotline for information and we are advertising in the San Francisco area seeking information."

One of the reasons the company has pressed so hard to discover the finger's identity is that many believed Anna Ayala had set the whole thing up as a hoax. She dropped her action against Wendy's after it was discovered she had sought damages from a number of other companies in the past. Police raided her home in Nevada last week and formally arrested her last week.

Accuracy and honesty

But Dr Iseman, the PR expert, believes that Wendy's cannot afford to let up its relentless effort to get its message across to the public: "Ed Bernays, a man that many consider to be the father of modern day public relations once said that the two most important words for people in the public arena were accuracy and honesty.  The reason being that ultimately all we have is the faith and trust of our publics. I think this is true for Wendy's now more than ever. Honesty and accuracy in all communication is critical - a single lapse will bring this issue back to the public's mind and could cause a lot of damage to their reputation."

Of course, Wendy's is by no means the only food company to experience this sort of health crisis but given the gruesome nature of the case it has inevitably caught the public's attention. In such a case there was never going to be much that Wendy's could say, or do, to dilute the negative publicity but the company can take comfort from not having made the situation worse.