Nonfoods Talk: The emperor has no clothes

The latest recall from Johnson & Johnson shows some holes in the manufacturing process. If not corrected, they can lead to even larger problems for the entire retail industry.

By Seth Mendelson

Johnson & Johnson is giving the health and beauty care category a lot of heartburn.

The New Brunswick, N.J.-based pharmaceutical and over-the-counter packaged goods company announced in December that it was recalling all lots—more than 13 million packages—of its soft chewable versions of Rolaids, including all of its Rolaids Extra Strength Plus Gas Softchews and Rolaids Multi-Symptom Plus Anti-Gas Softchews  products sold in the U.S. The company’s McNeil Consumer Healthcare division made the move after reports of consumers finding metal and wood particles in the products.

Unfortunately, that is just the latest problem for the company. For those of you keeping count, this is J&J’s third major recall of the year. In April, the McNeil division recalled more than 100 million children’s Tylenol products due to manufacturing and safety concerns. Later, as The New York Times reported, McNeil recalled nine million bottles of liquid Tylenol, plus Rolaids, Benadryl and Motrin products due to a variety of issues, including concerns over labeling.

The Times also noted that the Food and Drug Administration posted a report on its website citing a McNeil plant in Puerto Rico that was inspected last fall for manufacturing problems. The Times reported that the study cited “the facility for, among other issues, distributing products that failed quality requirements, failing to identify product defects during routine testing, failing to adequately investigate product problems and inadequate training of laboratory staff.”

If accurate, this is a big black eye for the entire health and beauty care category and, frankly, something that we should not expect from the likes of J&J, arguably the most important HBC company in the country and a company that should be at the forefront of safety issues. Yet, it appears to have happened and it appears to have happened multiple times over a short period.

The problem, of course, is that any bad news has repercussions throughout the entire industry. Rolaids, like Tylenol, is a staple of the industry and has been around for decades. Having these products suffer through a recall creates a bad buzz that impacts other categories and can do enough damage to get consumers to think twice before buying these items and other ones like it again. The end result, of course, is a slowdown in sales and, hence, profits, at the nation’s retailers.

That, in turn, gives more ammunition to the anti-HBC crowd at the nation’s supermarket chains. Less sales, they say, means that the various nonfoods categories deserve less room. Less room will lead to even fewer sales.

You get where I am going, right?

J&J officials told the press midway through 2010 that it was developing a plan to improve its manufacturing process and quality control systems. Good first step, but now they must put the plan into rapid motion and insure that events like this never happen again, or at a minimum are spaced far enough apart that J&J does not become the perpetual punch line for late night talk show monologues.

Of course, where does this leave the retail community? Retailers have to step up and make the consumer aware that they immediately eliminated the products from their shelves. Then, they need to explain to consumers, through signage and even direct contact, that the situation is under control and the remaining products on their shelves are totally safe. Finally, offering an alternative, again through signage, may be enough to get consumers buying again.

J&J has to pitch in. The company has a tremendous amount of experience working with the media to deliver a message and it has the resources to ensure that it gets out to the public. That message should be that J&J is working on correcting all of its problems and will only offer shoppers merchandise that meets rigorous safety procedures and tests.

Lets see if officials at this giant company step up to the plate.

Seth Mendelson can be reached at 646-274-3507, or smendelson@groceryheadquarters.com.

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