Roanoke Times Copyright (c) 1995, Landmark Communications, Inc. DATE: FRIDAY, August 5, 1994 TAG: 9408050078 SECTION: BUSINESS PAGE: A5 EDITION: METRO SOURCE: MAG POFF STAFF WRITER DATELINE: LENGTH: Medium
J. Bradley Shaw, manager of public relations for PepsiCo.'s Pepsi-Cola International division at Somers, N.Y., described the costs of the June 1993 incident. Shaw was in Roanoke on Thursday speaking to the Blue Ridge chapter of the Public Relations Society of America at the Jefferson Club.
He said the costs of the crisis included a temporary drop in sales, special contacts with the company's customers, production of a video showing the bottling process and complete devotion of the company's entire work force to the problem for five days.
Five company representatives, including Shaw, gave 2,000 interviews over five days. The company's chief executive officer, attempting to be "open and confident," appeared on five network talk shows in a single day, Shaw said.
"We probably came out of it stronger as a company," Shaw said. And in what was probably "something of a sympathy backlash," sales bounced back the following month to the best July on record for the century-old company.
He said a lot of customers "think we were victimized."
The incident, a lesson in crisis management, arose when a Tacoma, Wash., couple alleged that they found a hypodermic needle in a can of soft drink.
Shaw said they went directly to a lawyer, who, in turn, called a television station. Thus, the media storm broke without any prior notice to PepsiCo.
The media reports, he said, triggered more than 50 copy-cat claims from around the world. None ever was proven to be true, he said.
The Tacoma couple lived with a diabetic man who used similar needles, Shaw said.
They were seeking a monetary award, he said. But even more, he added, they were "driven by fame," discovering they could make a claim and be on the evening television news. "It's a pretty enticing thing for people," he said.
Shaw called the resulting crisis "a battle of perception vs. reality."
At the same time, a reporter in the Philippines reported an incident that had occurred there a year earlier, in May 1992. In that instance, a lottery promotion that was supposed to net one winner of $2 million turned into a fiasco producing 800,000 winners.
The company ultimately paid claimants $20 each - a large amount of money in the Philippines, Shaw said - costing $10 million.
The delayed reporting of that incident resulted from "the feeding frenzy around Pepsi" because of the syringe allegations, Shaw said.
PepsiCo. overcame the problem, he said, by acting with responsibility and by dealing honestly with the media. "In any crisis, you have to consider them to be an ally" in getting out the truth, Shaw said.
Shaw, a 1988 graduate of Washington and Lee University, said any media representative who called PepsiCo. talked to one of its five spokespersons. Like others on the team, Shaw gave 80 interviews a day during each of those five days.
The company, he said, "looked at the situation through the public's eyes" as it provided the information the media requested. Shaw said the public listened and then "the general person on the street thought [the needle incident] couldn't happen."
In all its dealings, he said, the company used "a tone of openness," informing all who called about details of the bottling process designed to prevent any contamination.
After calm returned, he said, The Wall Street Journal quoted some public relations consultants who claimed PepsiCo. didn't handle its crisis as well as Tylenol did during an incident of product tampering.
"No one died and no one was hurt," Shaw said of Pepsi's situation. "It was a completely different scenario."
There is no formula for handling a fast-breaking public relations crisis, he said. Each case must be dealt with on its own.