Research Papers and Essays
Gerber Managements Response to the Glass Scare of 1986:
An Ethical Analysis of the decisions of Gerbers Management Team
Dr. Philip Rothschild
7 December 1998
Individual Case Paper
When incidents of glass shards being found in jars of Gerber baby food made the evening news March 3, 1986, it was far from the lead story. The American public had already experienced numerous cases of contaminated products and these tragic incidents were becoming commonplace. Media coverage had already made the fatal shortcomings of the I.U.D. and the Rely Tampon well known. After the news coverage of some isolated cases of pins and needles found in Girl Scout Cookies in early 1984, the rate of tampering complaints received by the FDA rose from fewer than 20 to more than 200 in a single month. Following press coverage of the fatal Tylenol tampering in Westchester County, New York, in February 1986, the rate rocketed to 326 a month. When glass was reported in Gerber baby food later that month, tampering complaints reached an all-time high of 456. Only a week prior, glass had been reported in jars of Beech-nut baby foods in New York .
Beech-Nut recalled the baby food in question, but Gerber Products management decided not to issue a recall and remained surprisingly silent on the issue. This decision invited much criticism. Articles in Business Week, Newsweek, and Time questioned the ethics of Gerbers actions. Certainly, Gerber had not taken the highly visible, responsible course that Johnson and Johnson had followed in the wake of the Tylenol crisis. Although the glass shards had not resulted in any deaths, innocent babies had been severely cut. Indeed, this was an ethical dilemma unlike any the company had faced during its 48 year history.
History of Gerber Products Company
In 1927, Dorothy Gerbers pediatrician suggested introducing strained fruits and vegetables to her daughters at about five months of age. After several months of the tiresome chore of preparing the baby food by peeling, steaming, scraping and straining, Mrs. Gerber asked her husband, Dan, why infant foods could not be strained and canned at the Fremont Canning Company, an adult fruit and vegetable cannery operated by the Gerber family. Mrs. Gerber reasoned that if the cannery could make tomato puree for adults, why no pureed foods suitable for infants? Five varieties of baby food were prepared, tested, and were ready to market in 1928. Within six months, Gerbers baby foods were on grocery shelves in most major areas throughout the United States.
The success of the original five varieties fueled Gerbers success. The line of baby foods expanded to 220 products. After several lackluster attempts at diversification in the 1960s, Gerber was acquired in a $3.7 billion takeover by Swiss pharmaceutical and chemical giant, Sandoz, in a windfall for stockholders. Sandoz later became part of Novartis AG, the current owner. The company now produces bottle-feeding systems, nipples, pacifiers, teethers, exercisers, eating utensils, breastfeeding accessories, safety items and playthings. Since 1967, Gerber has also sold life insurance and now has over $9 billion of policies in force. Still, baby food remained their primary business and the discovery of glass fragments in their apple-plum and apple-cherry juices in 1984 was cause for significant concern.
As it turned out, neither Gerber nor the FDA was able to find a manufacturing related cause for the glass and blamed local grocers. Nonetheless, Gerber promptly recalled 550,000 jars of juice on September 28, 1984. Sales of Gerber baby foods declined by 4 percent and the reputation of Gerber Products was tarnished. Gerber had paid a large price for a problem that it had not created. Certainly, this experience was fresh on the minds of Gerber management when, in 1986, it happened again.
Glass Found in Baby Food Again
In March 1986, over 200 complaints of glass shards in Gerber baby food in over 30 states were received. Although the FDA inspected 36,000 jars of baby food, they failed to discover anything that would justify a recall. The largest pieces of glass found were harmless specks. Many suggested that publicity seekers and gold diggers conjuring up lawsuits fabricated some of the complaints. Still, many stores were removing Gerber products from their shelves and the State of Maryland banned Gerber peaches from the state.
Gerbers Response to the Crisis
Gerber sued the State of Maryland in an effort to return their product to store shelves in that state. Other than that, Gerber management was consciously quiet on the issue. They sought to downplay the incident and let it pass without the cost and negative publicity that had plagued the previous case. Gerber officials avoided the media, limited public statements, and never initiated a product recall. Financially, Gerber would survive the fiasco, but had they done the right thing.
From a legal perspective, Gerber had acted in good faith. They pointed to their quality manufacturing process and high standards. If a flaw could be found in their process, they would eagerly correct the situation; however, no flaw could be found. Surely they could not be liable for tampering. There was no legal requirement to recall the product. In fact, previous experience had taught that a recall would accomplish little once the damage was done. Legally, Gerber viewed itself as the victim rather than the culprit.
From an economic perspective, Gerber had good reason not to initiate a recall. The recall and demarketing cost of the Rely Tampon was over $20 million and over $150 million for Tylenol. Baby food investigations, including allegations of glass in Gerber products, had already cost $1.39 million. A recall would increase media attention and have negative effects on sales. To quietly settle individual lawsuits and internally address manufacturing and distribution safety concerns seemed the best course. After all, many more people would be harmed should the company be forced out of business.
From an ethical perspective, the situation is quite complicated. Babies are viewed as innocent and vulnerable. To harm a child seems to be one of societys most criminal acts. In fact, Gerber had built their business and reputation on providing the safest and highest quality products for babies. If Gerber appeared uncaring, the damage could be irreparable. It is not good enough to guarantee that baby food is safe when it leaves the plant. Gerber is directly responsible for products on store shelves that bear its name and trademark. To apply caveat emptor to infants is unquestionably unethical in our society. If Gerber had any ability to prevent the mouths of innocent children from being cut and lacerated, corporate social responsibility dictates that they must. Gerbers response to the crisis falls short of ethical performance.
What Gerber Should Have Done
Gerber had many options in responding to the crisis. Though it is difficult to speculate on the motivations of Gerber management, some actions seem a more appropriate course.
In order to show concern to the general public, Gerber should have responded publicly with their side of the story within 24 to 48 hours of the crisis. They should have been more open to the media, albeit brief.
Gerber should have provided broadcast journalists visual evidence of action the company is taking for the safety of the public by providing plant tours and demonstrations of quality innovations.
Gerber should actively promote consumer education concerning the safe use of their products. Parents should be told how to identify tampered products and foreign objects.
Gerber should provide innovative packaging to prevent tampering, similar to Johnson and Johnsons efforts with Tylenol. These efforts should be widely publicized in order to communicate Gerbers concern for baby safety to the general public.
Gerber should employ high-tech solutions like decision-aiding software and computerized threat assessment to secure information quickly. Global satellite news conferences should be held when needed.
Gerber should actively and publicly lobby for increased penalties for product tampering. They should make every effort to make someone else the bad guy.
Incidents and Trends Since 1986
Beech-Nut Nutrition Corp. announced on October 10, 1987 that mercury beads had been found floating in one jar of Stage 3 peach and yogurt baby food. The contamination was a result of a broken metal thermometer. Though the FDA tested the jar and determined that the mercury was not harmful, Beech-Nut promptly recalled 64,800 jars of peaches and yogurt.
Glass was again found in Gerber baby food in April 1993. 25,590 cases of Gerber 2nd Foods brand Oatmeal with applesauce and bananas baby food in 4-ounce glass jars were recalled. Gerber Products Company initiated the complete recall after finding that a jar contained glass particles. The company in 1995 also recalled 2,951 cases of Gerber Graduates Apple Juice for Toddlers as unfit. The product was vinegary and tasted sour.
In June 1993, Pepsi provided perhaps the best example in modern times of how to deal with a product-tampering situation after syringes were reported in Pepsi products. Within twenty-four hours of the incident, two video news releases brought Americans inside a Pepsi plant where a manufacturing expert explained how the high-speed, high-tech canning process is specifically designed to prevent contamination. The second tape featured president and CEO Craig Weatherup reinforcing Pepsi's straightforward message with news of the FDA's first arrest in the case. Sent via satellite, the images and messages of the first video reached an audience of 187 million people.
Pepsi released a third Video just as the FDA held a press conference in which Commissioner Kessler declared the notion of a nationwide tampering unfounded. The tape, seen by more than 95 million people, featured Weatherup with actual surveillance footage of a woman inserting a syringe into an open Diet Pepsi can in a convenience store. It was the visual proof that alleged tampering could happen out in the open, in front of witnesses, and it illustrated the copycat behavior cited by FDA as the reason for the scare. A fourth national television and print ad delivered Pepsi's word of thanks to consumers and a final message: "Drink all the Diet Pepsi you want. Uh-Huh." 
In 1995 Gerber came under fire for using fillers and starches in their baby foods. The Center for Science in the Public Interest (CSPI) launched a campaign to require that the percentages of major ingredients be disclosed on the fronts of baby-food labels.  The CSPI also petitioned the Federal Trade Commission to halt Gerber's deceptive advertising. Gerber responded with a full-page advertisement that attempted to set the record straight. The CSPI called this advertisement a campaign of lies and claimed that Gerber is spending millions of dollars to maintain the phony premise that added sugar and cheap fillers don't reduce nutritional value. The CSPI also claims that Gerber makes an additional $2.3 million per year in windfall profits on its banana products alone by diluting them with less-expensive fillers.
Gerber mushrooms destined for export to China were detained because of high levels of bacteria in February 1997. In September of the same year, Gerber initiated a recall of 2,141,880 jars of carrots for babies at the request of the FDA. The FDA had determined that the product contained high levels of arsenic. Gerber estimated that little product remained on store shelves at the time of the recall initiation and had probably already been consumed. No further action was taken by Gerber.
Later in 1997, the Federal Trade Commission received a complaint against Gerber for deceptive advertising. Gerber advertising campaigns stated that 4 out of 5 pediatricians recommend Gerber baby food. This information was not correct and was used deceptively by Gerber in their marketing. The FTC ordered Gerber to stop the deceptive practices. The settlement would prohibit the company from representing the extent to which doctors or other health professionals recommend baby and toddler foods or representing any recommendation or endorsement of these products unless it has competent and reliable evidence that substantiates the claim. Gerber also would be prohibited from misrepresenting any survey or research.
Citing a report from the Environmental Working Group last March, Kari Thorene claimed that about 77,000 infants are exposed to unsafe levels of organophosphates daily nationwide.  According to the EWG study, organophosphates "have the potential to cause long term damage to the brain and nervous system, which are rapidly growing and extremely vulnerable to injury For infants six to 12 months old, the dominant source of exposure is commercial baby food, particularly apple juice, pears, applesauce and peaches. In fact, there has been a growing awareness that established acceptable levels of pesticides in baby food may harm infants.
Last May Gerber issued a press release warning of possible product tampering in New Jersey. Al Piergallini, Gerber's Chief Executive Officer, says, "We are outraged that anyone would threaten to jeopardize the safety of young children. We are doing everything we can to address this issue and bring it to an end as soon as possible. Safety has been and continues to be our highest priority." Piergallini also noted that, "If consumers should have any concerns, they should always check our 'pop-top' seal. Our baby food jars are designed with a vacuum-sealed, pop-top button on the cap to assure safety. Customers should check that the pop-top button is depressed and should listen for the cap's 'popping' sound when opening the jar." Perhaps Gerber is getting the message.
Just this month, Gerber was again in the news regarding phthalates in teethers, rattles and other children's products. Gerber has instructed retailers to stop selling its soft vinyl infant care and toy products intended for mouth contact and containing phthalates, a softening ingredient. This voluntary move is in direct response to consumer and retailer confusion, and concerns recently brought to the Company's attention by the staff of the U.S. Consumer Product Safety Commission (CPSC) about the safety of phthalates.
Gerbers experience demonstrates that corporate ethics is not a do once and forget it task. It is an ongoing process that must permeate the organization and its daily business practices. Ethics will be even more critical as ethinic baby foods become more popular. Products targeted at specific ethnic groups must receive the same level of quality control, otherwise the potential for criticism of Gerber will continue to be an ongoing threat.
There is a also continued sensitivity to all reported incidents involving infant formula or baby food. FDA's position is that all complaints involving either infant formula or baby food are to be thoroughly investigated on a top priority basis including follow-up at the doctor or hospital (if an injury/illness is involved) with the collection and analysis of appropriate samples. Gerber should learn from its past mistakes and shortcomings and actively participate with the FDA to ensure only the highest quality products are available to the consumer.
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