FINDING horse meat in hamburger in the U.K.: That's a major scandal that needs resolution sooner rather than later.
Each day seems to bring some new development. The more investigators dig in, the more widespread the mess becomes.
Thankfully, this does NOT appear to be a major food safety issue; no one has been placed in danger.
Nonetheless, from a cost perspective, the outcome is the same. Direct costs associated with product testing, recalls and replacement, legal fees and general loss of sales are mounting rapidly. Meanwhile, the indirect costs also are significant, including costs of government investigations, interruptions to business continuity and loss of brand equity.
That brings us around to the long-term fallout -- namely, implications for consumer perception. From the consumers' perspective, this all seems chaotic, with no reasonable explanation; it's hard to make sense of how it's even possible for horse meat to end up in ground beef.
Consumers feel like they've been duped, the default presumption being that fraud and deception have been occurring for an extended period of time. So, consumer confidence in the food supply is being tested yet again.
Simply put, it's all about trust. Consumer expectations of integrity have been dealt a major blow, and because it's all playing out in public, consumers become filled with notions of negligence and corruption within their food system. Given what has occurred and the sweeping media coverage, questions about food system practices no doubt will intensify, e.g., "What else don't we know?"
It's interesting to note that this has all occurred in the U.K. as we approach the one-year anniversary of the lean finely textured beef (LFTB) -- a.k.a. "pink slime" -- fiasco in the U.S. As such, it's probably good to remind ourselves of the lessons learned from that situation. After all, they're somewhat parallel scenarios, even though LFTB is completely legal and regulated and was misrepresented by the broader media.
Both events are potential game changers and speak to consequences of consumers finding out about their food after the fact.
The take-away message here is that there's no such thing as too much transparency. Facilitating that transparency requires innovative perspectives throughout the value chain.
As I noted last year in a column regarding LFTB, that means "new business paradigms that incorporate more traceability, more documentation and more verification."
It's the only way to establish and maintain credibility.
In all of this discussion, I'm reminded of a presentation by C. Larry Pope, chief executive officer of Smithfield Foods, to attendees of the U.S. Department of Agriculture's Agricultural Outlook Forum in 2008.
His presentation followed the Westland/Hallmark animal abuse/meat recall debacle by just a few days. Again, there were no food safety concerns (despite USDA's recall); rather, it was an animal welfare and public relations matter.
Pope was especially forthright and passionate that day and made some great observations about the food business. Most notable, he discussed how customers increasingly care about the background of their food, a development he called "radically different" from previous generations.
He also remarked that these issues mandate changes in the value chain requiring greater alignment in the future.
"We can't do business (the old) way going forward. ... The consumer is forcing us (to change)," he said.
Perhaps most significant among Pope's comments, and what still resonates most with me to this day, was his observation that each of these incidents causes consumers to trust the food system a "little bit less." He's exactly right -- and failure to change spells long-lasting complications.
The only way to prevent the erosion of trust and broad cynicism in the food system is to ensure that we are doing the right thing each and every day while stepping up collaboration and communication with consumers. Then, and only then, will the food system begin to earn back that trust -- little by little.
*Dr. Nevil C. Speer is with Western Kentucky University and serves on the board of the National Institute for Animal Agriculture, a national organization devoted to engaging livestock producers and livestock health professionals in developing solutions for issues in the livestock industry.