Pinkberry RC2 (NASDAQ:RCRC) Jamba Juice (NASDAQ:JMBA)
An insanely popular Los Angeles-based frozen yogurt chain with a celebrity following. (Paris Hilton reportedly asked for Pinkberry in jail.) A toy company in Oak Brook, Illinois, that holds licenses for well-known properties including Winnie the Pooh, Thomas and Friends, Nickelodeon, and Sesame Street. The Emeryville, California-based chain sells fruit smoothies with names like Açai Supercharger and Protein Berry Pizzazz.
A local New York TV news program broadcast footage in June of mice scampering around a recently opened shop in Manhattan. During a routine check, lead paint was found on some Thomas the Tank Engine products made in China. Lead paint has been linked to brain damage, even in small doses. In April, a blog called The Consumerist alleged that Jamba's secret recipe for nondairy smoothies included milk. That was incorrect. But the posting was linked to by 20 other blogs and read 23,000 times.
Within hours, Pinkberry responded by releasing this statement to the press: "Since our store is regularly inspected and sanitized, we're shocked and puzzled by this footage. We're investigating thoroughly and have already resanitized all of our New York stores." The company recalled the trains and offered to replace them--provided consumers mailed them to the company at their own expense. Anxious parents grew irate and the critics descended. Jamba Juice's PR team quickly traced the bad information to a customer service rep who confused two recipes in a conversation with the blogger. A day after the posting, Jamba contacted The Consumerist to reaffirm that its dairy-free smoothies are, in fact, dairy free, but stopped short of posting anything on its own site.
Video of rats careening around a New York City fast-food franchise sparked a furor earlier this year. But people seem less fazed by mice. The day after the story broke, customers were lining the block. "As long as there are no rats in the ice cream, I'm okay," said one customer. A day after making the initial offer, RC2 changed course, offering to reimburse postage costs. But its clumsiness in judgment was already drawing fire. The New York Times declared the Thomas the Tank debacle "a case study about how not to deal with a crisis." The Consumerist posted Jamba's statement and an addendum when it learned about the call center rep's mistake. The accusation was viewed by six times as many people as the correction, but the uproar died down. In the end, Jamba fielded fewer than 20 concerned calls from consumers.
By reacting quickly and taking responsibility, Pinkberry cut the legs off the story. Or: Mice are not as scary as rats. When you're dealing with kids and health issues, apologize fully and profusely. Or: Pay the friggin' postage. Address every accusation as fast as possible--even (make that especially) those that are unfounded. Or: The truth will out.
Published on: Aug 1, 2007