TEAM OF “FORMER” RIVALS TO RESTORE FAITH IN BURRITOS?
Three words no food guy or gal wants to hear are: e. coli, salmonella and norovirus. And you absolutely never want to hear them together. But that is exactly the series of food safety challenges that plagued Chipotle restaurants (and its reputation) last year. In an effort to revive its flagging sales and raise the bar on quality, the chain has retained two leading food safety experts, David Theno, formerly a Jack in the Box executive, and David Acheson, former FDA and Department of Agriculture official. Acheson had previously been strongly critical of Chipotle’s responses to last year’s outbreaks. The two consultants join a bevy of other advisors that Chipotle has brought on board in 2016. With customers running for exits (particularly the norovirus ones), Chipotle executives have admitted that the crisis will hurt their bottom line to the tune of three years’ worth of earnings. So it’s no surprise they are looking for a playbook to expedite their way back to baseline.
Our Take: Safety issues can kill a company in the food industry, so Chipotle is right to assemble a capable team to find the right recipe to rebuild consumer trust. And turning critics into allies, especially if they have keen strategic insights, is an impressive start. But will the maneuver work? Our team would be wary about having too many consultant cooks in the proverbial kitchen. It will take time –no further outbreaks – and tasty food to ultimately help get lapsed customers back in the burrito line.
SMITHSONIAN ESCHEWS GEORGE ZIMMERMAN
George Zimmerman, who was acquitted for his role in the death of Trayvon Martin, keeps finding his place in the national spotlight. Last week, Zimmerman tried to auction the firearm he used to kill Martin, name-dropping the Smithsonian as having an interest in acquiring the gun, and claiming that it was “a piece of American history.” The Smithsonian acted with record speed to quash any notion that they were interested in the firearm – or ever would be. Smithsonian’s two-sentence statement, which fit into a tweet, was as immediate as it was unequivocal. The online audience response online was an instantaneous “thank you.”
Our Take: Zimmerman’s dropping of the Smithsonian’s brand name to promote the sale of a gun used in a tragic, racially divisive incident was odious. But, the Smithsonian recognized that speed is everything when it comes to stopping rumors in the press. When a mistruth goes viral, it is hard to scale back — and the Internet captures a digital footprint seemingly forever. By issuing a succinct, clear response immediately across media channels, the Smithsonian shut the issue down before it could ignite. Well done, Smithsonian.
MUTUAL FUNDS TO PHARMA LOBBYISTS: STAND UP & FIGHT
Drug companies heard from all sides this week about the importance of defending the value of medicines. Bloomberg reported that at least six major funds and venture capitalists huddled with biotech and pharma lobbyists last March. On the agenda: urge industry lobbyists to do a better job educating the public about the value of medications and innovative pricing models. The pressure comes as leading presidential candidates have called the industry “profiteers,” and threatened to let Medicare negotiate directly with manufacturers. With the Biotech stock index taking steep losses compared to the market at large, it’s no surprise that pressure is growing – and investors are unnerved about potential regulation. Late last week, Cigna announced it would be the first insurer to have value-based contracts for cholesterol- lowering PCSK9 inhibitors with both Amgen’s Repatha and Sanofi/Regeneron’s Praluent.
Our Take: Necessity is the mother of invention, and biopharmas must now focus their innovation dollars on reputational marketing – in addition to drug development. In a country where the populace barely understands how their healthcare insurance works – let alone how payer discounts and rebates factor into drug pricing – industry trade associations must apply new approaches to educating voters on value. Our two cents: The keys to success will be tapping into American’s emotional and rational expectations for value in medicines. The industry could take a page from American Cancer Society’s “Celebrating More Birthdays” campaign that reminds viewers very visually — and very movingly – of the countless lives that have been saved due to the nation’s ongoing efforts to fight cancer.