Scandal management: How brands can avoid being sunk by negative press

Brand loyalty is the cornerstone of any successful food and beverage company. And that loyalty is built on consumer trust.

“Brand loyalty could mean the difference between meeting or missing revenue targets,” says a spokesperson for brand development firm, Qualtrics.

So, what happens if that trust is broken by negative press? Is the trust lost forever? Will customers go elsewhere? And can trust be restored before it leads to financial ruin?

How does negative press impact sales?​

While no brand wants to receive negative press, it could easily happen. And the bigger a brand gets, the more scrutiny it will be under. But, the big question is, will it impact sales?

And the answer is, almost certainly, yes.

According to a recent survey by consumer research firm Cluey, 95% of respondents confirmed that negative press attention has affected their opinion of a brand in the past. Furthermore, 89% said negative attention actually impacted their shopping behaviour. But how significantly is that behaviour affected and how long will the negative impact last?

This can depend on a number of factors, including what the negative news story is, who has been affected, and how the brand responds to the issue. For example, Coca-Cola faced backlash from environmental groups in 2020, after it was ranked the world’s number one plastic polluter.

The beverage powerhouse responded by saying it would not abandon plastic bottles, stating they were “popular with customers” and sales were unaffected. By comparison, British brand BrewDog has faced multiple negative news stories. In particular, the beer and spirits maker came under fire for transphobic rhetoric in 2015, leading to 8,000 people signing a petition against the brand. The moral of the story being, upset the customer and there's a problem.

How consumers perceive negative press is also heavily influenced by how loyal customers were to a brand before the negative news story hit. Trust in the food and beverage industry is declining​ so brand loyalty is more important than ever.

“Brand loyalty is incredibly powerful for any brand,” Amanda Thurston, a PR Consultant for food and drink challenger brands, told FoodNavigator. “Creating a strong emotional connection with customers means they are more likely to remain loyal in the face of negative press.”

This has been proven true for major brands including Nestlé, which continues to dominate the market despite negative news stories such as the recent baby formula scandal​.

Meanwhile confectionery giant, Mondelēz International, has proven the power of customer loyalty, weathering negative stories such as shrinkflation​, where they reduced the size of products, despite sales continuing to rise.

The brand also increased product costs as a result of rising commodity prices​, with chief executive Dirk Van de Put confirming there would be a “straightforward price increase” for consumers as a result. Though one reason they may have passed through this situation unscathed is the transparency with which they approached the situation. It could also be a result of negative bias.

What is negative bias and how can it increase sales?​

Negativity bias is the tendency to pay more attention to negative information than to positive information. Brands can benefit from this as it puts their name and products at the forefront of consumers’ minds and actually raises the profile of the brand.

“Negativity bias is a psychological phenomenon deeply ingrained in our evolutionary history,” says business strategist, Shah Mohammed. “It’s the tendency of our brains to pay more attention to, remember, and be influenced by negative information compared to positive or neutral information. And it’s a phenomenon that savvy brands have mastered the art of exploiting. Some brands intentionally acknowledge their own flaws or vulnerabilities, creating a sense of authenticity and relatability. This can foster a more positive perception, as consumers appreciate honesty.”

Although again, it is important to remember that this will depend on the type of negative news and how it is communicated to consumers. Negative news will also likely occur unexpectedly. So, how can brands return a more positive outcome from negative news stories?

How can brands recover from negative press?​

The best way to recover from negative news stories is to make a change. This will show consumers that you recognise the error and are seeking to make amends rather than ignoring the issue. And it seems that most brands recognise this.

“In my experience, when food companies receive negative press, they’re more likely to make positive changes to their products,” Vani Hari, author and food activist, told FoodNavigator. “For example, when I discovered in 2013 that Kraft was producing their famous Mac & Cheese in other countries without artificial dyes, while they used Yellow 5 and Yellow 6 in the US, I was so outraged that I started a petition. This petition received major media attention and garnered nearly 400,000 signatures. I went on national morning talk shows and did countless interviews with the press. This put tremendous pressure on Kraft to do the right thing, and thankfully we now have artificial dye-free Kraft Mac & Cheese.”

But, more than that, it’s possible for brands to turn negative press into a positive if the response is well handled.

“It’s how you react that counts,” says PR consultant Thurston. “A brand that reacts quickly and clearly, with honesty and integrity, has potential to take control of the narrative and even turn it around. Oatly is one example. Instead of shying away from negative publicity received over environmental claims, the brand embraced it, building an entire campaign around it to tell its side of the story and to rectify mistakes made. Now, despite its challenges, 36% of all alt-milk drinkers in the UK buy the brand.”

However, brands should make sure they fully understand the problem, before trying to fix it.

“When reading negative comments about your business or brand, there is often a tendency to react quickly in defense,” Emily Blewett, co-founder of Spring & Tonic PR, told FoodNavigator.

Companies may also face negative press about their brand, based on opinion. This can’t necessarily be changed and sometimes it’s better to leave the situation alone.

“People are entitled to their opinion, and this is something that cannot be controlled,” says Blewett. “If possible, we advise taking a step back, and giving yourself time to think before doing or saying anything.”

She advises brands to consider three key questions:

• Do you need to respond?
• What can be gained from doing so? You want to avoid adding fuel to the fire 
• Have you done something wrong that you need to apologise for?

And if you do decide that you need to respond then make sure you plan your approach.

“In business, things don’t always go to plan,” says Thurston. “It’s how you react when things go wrong that counts.”