Since Nov. 20 at least 60 cases of E. coli infections have been reported across six states, according to the Centers for Disease Control and Prevention (CDC), most of them linked to Taco Bell restaurants. Forty-eight of those people have been hospitalized, seven with potentially fatal kidney failure, and more cases are likely to be reported. The New York Times reported on Friday that there are at least 169 confirmed E. coli cases, most of them centered on Long Island and in New Jersey. The cause of the outbreak remains unknown, although green onions from Taco Bell restaurants are the suspected source. Both the CDC and Food and Drug Administration are investigating.
This week, the chain temporarily closed at least 60 stores in New York, New Jersey, Pennsylvania and Delaware for cleaning and restocking of all food. Most of the stores were reopened within a day. Taco Bell also launched its own investigation into the E. coli's source, and its private laboratory found E. coli present in some samples of green onions. On Wednesday, Taco Bell removed green onions from all 5,800 of its restaurants.
Yet consultants who specialize in advising companies faced with such crises say Taco Bell's actions are not enough if the Mexican-food chain is to avoid a serious blow to its business.
Taco Bell's president, Greg Creed, has posted three short statements on the restaurant's web site since the outbreak was linked to the chain on Monday. Even those written statements were late in coming, says Timothy Coombs, a crisis management expert at Eastern Illinois University in Charleston, Ill. "The story broke Monday morning and Taco Bell did not have anything up until later that evening," Coombs says. "People were looking for information online and there was nothing there."
Creed should have held a news conference or made himself immediately available to reporters, says Jonathan Bernstein, president of Bernstein Crisis Management, a California-based consulting group. But the president has yet to do so, even as new cases of E. coli are reported. "Taco Bell is hiding behind the written word," Bernstein says. "The moment there is a threat to health or safety, that mandates the involvement and personal presence of the company's president. This action communicates to the public that the company cares and it ensures stakeholders that the company is doing the right thing."
Taco Bell may have also confused the public by closing and then reopening restaurants, even though the source of the contamination is still unknown. "Some would say that was a sign of being proactive: closing the store in order to protect the consumer," says Steven Fink, president of Lexicon Communications Corps, the nation's oldest crisis management firm. "But then Taco Bell reopened the stores and nothing had changed. Why did they close the stores and then reopen them? That sends a mixed signal that the company doesn't have a handle on what's going on."
Good crisis management consists of five basic tenets, Bernstein says. The company's response should be prompt, compassionate, honest, audience-appropriate and interactive. "The information a company releases to stakeholders like investors and employees may be different than the information released to the public," Bernstein says. The information, he adds, "needs to be released in an interactive way so that all of your stakeholders have a means to ask questions and receive answers, such as on a web site."
Those lessons were learned by Wendy's, the fast-food chain, in 2005 after a customer in San Jose, Calif., claimed to have found a human finger in her chili. The incident temporarily drove away Wendy's customers and sales plummeted by 50%, according to Fink, who blames much of the drop on Wendy's ineffectual communciation with the public.
But the Wendy's finger episode turned out to have been a hoax. Taco Bell faces a more challenging public-relations task, since the E. coli outbreak could raise health concerns about the chain that will far outlast the specific threat.
Fink suggests that Taco Bell replace all of its suppliers until the source of contamination is found. That's what he did while overseeing 2003 E. coli outbreak at Pat & Oscar's, a restaurant chain based in southern California. "Taco Bell needs to send a clear message to the customers that they are going the extra mile to protect them — that has not come across in anything I have seen yet," says Fink.
Bernstein's advice for Taco Bell is to be aggressive and apologize for its poor communication. "They've already made one set of mistakes," he says. "They should come forward and say 'We haven't gotten out on the right foot, we should have had a person out front, our hearts go out to those who are ill.' If you've taken every step to prevent a crisis and to communicate it, the public is much more forgiving than if you don't."
Neither Bernstein nor Fink knows the details of Taco Bell's current crisis. But Fink, who also oversaw crisis management for the Jack in the Box restaurant chain when its E. coli outbreak in 1993 sickened 600 and killed four children, predicts that Taco Bell's troubles are just beginning. "I can tell you right now there's going to be class action lawsuits, a lot of litigation involved, and health department investigations," Fink says. "It's going to go on for a period of years, and Taco Bell needs to be prepared for it. I don't know whether they are."