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Horsemeat lasagne scandal leaves Findus reputation in tatters Horsemeat lasagne scandal leaves Findus reputation in tatters
(about 2 hours later)
"Our chefs take painstaking care to ensure our recipes are developed to the highest standard. We use only the best ingredients and a generous pinch of imagination." So states Findus on its website."Our chefs take painstaking care to ensure our recipes are developed to the highest standard. We use only the best ingredients and a generous pinch of imagination." So states Findus on its website.
It would seem that imagination is now catching up with them, as revelations that Findus beef lasagne products contained up to 100% horsemeat threaten to leave the company's reputation in tatters.It would seem that imagination is now catching up with them, as revelations that Findus beef lasagne products contained up to 100% horsemeat threaten to leave the company's reputation in tatters.
Analysts and experts believe a firm best known for crispy pancakes can recover its standing, but the way it handles the fallout will be crucial. Analysts and experts believe a firm best known for crispy pancakes can recover its standing, but the way it handles the fallout will be crucial.
Neil Saunders, managing director of the retail researcher Conlumino, said: "I think it's a PR nightmare and disaster for them and I think it's much worse than for a company like Tesco which sells a whole variety of products." Last month Tesco was among the retailers caught up in the first wave of revelations that horse DNA had been found in meat products.Neil Saunders, managing director of the retail researcher Conlumino, said: "I think it's a PR nightmare and disaster for them and I think it's much worse than for a company like Tesco which sells a whole variety of products." Last month Tesco was among the retailers caught up in the first wave of revelations that horse DNA had been found in meat products.
"Findus is a food brand associated with ready meals so when customers stand in front of a freezer in a supermarket, they have a lot of choice. People will look at the whole brand as tarnished and it will affect other products."Findus is a food brand associated with ready meals so when customers stand in front of a freezer in a supermarket, they have a lot of choice. People will look at the whole brand as tarnished and it will affect other products.
"Findus's reaction has been left wanting," Saunders added. "If you go on their website, one of the products featured on the front page is the beef lasagne. I don't think they've been particularly clever or savvy at handling this.""Findus's reaction has been left wanting," Saunders added. "If you go on their website, one of the products featured on the front page is the beef lasagne. I don't think they've been particularly clever or savvy at handling this."
The company, which was bought by the private equity firm Lion Capital for £1.1bn in 2008, also owns the Young's Seafood brand. It has been struggling financially after it was loaded with huge debts, and was forced into a major restructuring last year, including a £220m cash injection.The company, which was bought by the private equity firm Lion Capital for £1.1bn in 2008, also owns the Young's Seafood brand. It has been struggling financially after it was loaded with huge debts, and was forced into a major restructuring last year, including a £220m cash injection.
A source familiar with Findus's operations said there has been "huge pressure" to lower the company's costs as it struggles to take its products upmarket.A source familiar with Findus's operations said there has been "huge pressure" to lower the company's costs as it struggles to take its products upmarket.
"Until they could introduce new products for which consumers are willing to pay more - by taking frozen food upmarket - the only option they had was to reduce the cost line," the source said, adding that a series of executive changes had left the entire group short of media expertise, leaving it exposed to the latest damaging revelations. "Until they could introduce new products for which consumers are willing to pay more - by taking frozen food upmarket - the only option they had was to reduce the cost line," the source said, adding that a series of executive changes meant the entire group was short of media expertise, leaving it exposed to the latest damaging revelations.
"No one in the company is responsible for communications as a full-time job. It is simply part of the marketing function, so the company is not set up to manage a crisis.""No one in the company is responsible for communications as a full-time job. It is simply part of the marketing function, so the company is not set up to manage a crisis."
The same source said the reputational impact will deal a further blow to the group's efforts to make frozen food a more upmarket. The same source said the scandal would deal a further blow to the group's efforts to make frozen food more upmarket.
"The last thing Findus and the frozen food industry needs is a reputational scandal … They wanted to introduce new brands, new products and take the whole category upmarket … The bet by Lion Capital was that instead of being 2 for £1 in Iceland, they could sell products for £3.50 in Waitrose. This scandal is a horrible setback for the company and a food category that is very unloved.""The last thing Findus and the frozen food industry needs is a reputational scandal … They wanted to introduce new brands, new products and take the whole category upmarket … The bet by Lion Capital was that instead of being 2 for £1 in Iceland, they could sell products for £3.50 in Waitrose. This scandal is a horrible setback for the company and a food category that is very unloved."
The company's website now has a statement apologising for "any inconvenience caused". It adds: "We do not believe this to be a food safety issue. We are confident that we have fully resolved this supply chain issue. Fully compliant beef lasagne will be in stores again soon."The company's website now has a statement apologising for "any inconvenience caused". It adds: "We do not believe this to be a food safety issue. We are confident that we have fully resolved this supply chain issue. Fully compliant beef lasagne will be in stores again soon."
Saunders agreed and said any plans to approach high-end retailers lay in tatters, but added: "If this was just a Findus issue, the full spotlight would be turned on the company. I think retailers would take a slightly more aggressive approach if it hadn't already happened to some of their own brand products. The biggest saviour for Findus is for something else to be discovered with another brand and another product.Making the blame more diffuse could be very helpful for them in the longer term." Saunders agreed and said any plans to approach high-end retailers lay in tatters, but added: "If this was just a Findus issue, the full spotlight would be turned on the company. I think retailers would take a slightly more aggressive approach if it hadn't already happened to some of their own-brand products. The biggest saviour for Findus is for something else to be discovered with another brand and another product. Making the blame more diffuse could be very helpful for them in the longer term."
Tesco has already withdrawn its value burgers after they were found to contain horse DNA and Aldi has also pulled products from its shelves.Tesco has already withdrawn its value burgers after they were found to contain horse DNA and Aldi has also pulled products from its shelves.
The Findus brand is likely to remain on supermarket shelves for now, with Sainbury's, Morrisons, Asda and Tesco all saying they currently have no plans to remove other Findus products.The Findus brand is likely to remain on supermarket shelves for now, with Sainbury's, Morrisons, Asda and Tesco all saying they currently have no plans to remove other Findus products.
Christian Mahne, a corporate reputation expert at Vetch Mahne, said the discovery in the food of phenylbutazone, an anti-inflammatory veterinary drug, could be disastrous. Christian Mahne, a corporate reputation expert at Vetch Mahne, said any discovery in the food of phenylbutazone, an anti-inflammatory veterinary drug, could be disastrous.
"The problem will become a full blown crisis if the banned agent phenylbutazone is found. With that the story moves from being a highly unfortunate, almost comical episode to being a serious major health scare. To weather the storm at best the company is going to need a thick skin and at worst some very expensive lawyers." "The problem will become a full-blown crisis if the banned agent phenylbutazone is found. With that the story moves from being a highly unfortunate, almost comical episode to being a serious major health scare. To weather the storm at best the company is going to need a thick skin and at worst some very expensive lawyers."