Crisis Communications

In 1993, a couple from Tacoma, Washington claimed that while looking for a prize winning word in their Diet Pepsi, they found a syringe. The couple reported their findings and turned over the product to their lawyer on a Wednesday and the Seattle news had the story running by Friday morning. That day, another needle finding was claimed in the state of Washington causing the FDA to issue a five state alert to have consumers of Diet Pepsi inspecting their products. The advice was to empty the soda into a glass cup before drinking. Soon, claims of finding needles were popping up all over the country and immediately following the story was being run on CNN and by the Associated Press. The crisis soon escalated to reports of findings of needles, screws, pins, a bullet, and a crack cocaine vile. The crisis began to turn into what the country believed to be a hoax or a scam. Arrests were made with charges of causing “hypodermic hysteria.”

The night that the Pepsi story aired on CNN, the PR crisis team met and made a decision to use the media to fight off the media crisis. PepsiCo’s North American CEO, Craig Weatherup, spoke to the FDA Commissioner, David Kessler, on that night and it was agreed that a product recall was unnecessary. A crisis command center was established in the company’s TV room where the CEO worked very closely for the duration of the crisis. Video news releases were created to be distributed through satellite across the country—it was aired on over 400 stations.

Because of the information brewing over false claims of product tampering, both PepsiCo CEO Craig Weatherup and FDA Commissioner David Kessler appeared on “Nightline” and spoke about the potential consequences of making these sorts of claims, which could be five years in prison and/or a $250,000 fine. After their appearance, any following claims that appeared in the news were also paired with terms such as “copycat” or “hoax” which essentially helped to undermine the claim as being false.

Lastly, the PR team released another video news release including statement s from FDA Commissioner David Kessler saying that the FDA had not been able to identify any cases of actual tampering with the product. Also, the CEO Weatherup narrated the piece saying, “PepsiCo Inc. declared that its needle-in-the-can scare was over…As America now knows, those stories about Diet Pepsi were a hoax. Plain and simple, not true.” Blame ended up getting placed not on PepsiCo but on the news sources for helping to spread the rumors and creating the paranoia.

For a couple months following the can tampering crisis, PepsiCo ran ads such as the full page, “Pepsi is pleased to announce…nothing.” Also, on the fourth of July, Pepsi put out ads for their products along with coupons saying, “Thanks, America.” Ultimately, the crisis cost PepsiCo about $35 million due to lost sales and coupon distribution.

I think that the PR crisis communications team for PepsiCo handled the crisis very well. They acted immediately and appointed their CEO as the spokesperson to deal with the media, a strong tactic. They did not hide anything from the public nor did they go right out and accept blame when they didn’t have enough information. The incorporation of new media by using video news releases was a great tactic in reaching the large public. Also, the company had great follow up with their advertisements and giving out coupons to thank the consumers.

http://www.roadsideamerica.com/rant/pepsipanic.html