Perrier and the Benzene Recall

The story

By the late 1980s, Perrier was more than a bottle of fizzy water. Bottled at a natural spring in Vergèze, in southern France, its green bottle had become a symbol of good taste and healthy living. In the United States, Perrier sold about $102 million worth of water in 1989, and its whole brand rested on one idea: purity.

In early 1990, that idea was tested in an unlikely place. Lab workers at the Environmental Health Department in Mecklenburg County, North Carolina, used Perrier as a clean standard when testing local water. Suddenly their tests started showing problems. They cleaned their equipment, recalibrated it and tried again. Finally, they tested the Perrier itself and found benzene, a chemical known to cause cancer, at levels above federal limits. They alerted the U.S. Food and Drug Administration.

Perrier's U.S. company quickly removed its water from American stores on February 9 and 10, 1990. At first, the company described the problem as small and limited. It suggested the issue affected only North America, and one early explanation blamed an employee who had supposedly used a benzene cleaner on equipment by mistake. But more contaminated bottles turned up in other countries, including West Germany.

On February 14, 1990, Perrier's president, Gustave Leven, held a news conference and announced that the company would pull every bottle of Perrier from sale worldwide, about 160 million bottles in some 120 countries. "No half measures are possible," he said. He also gave a new explanation: a filter on the line carrying the spring's natural gas was supposed to be changed every six weeks but had been left in for months, letting traces of naturally occurring benzene into the water. The company said it had no insurance to cover the loss. Its stock fell sharply, and France's stock-market regulator opened an inquiry into unusual trading just before the announcement.

Pulling every bottle worldwide was a bold and costly decision. But the changing story hurt. Customers and reporters had heard one explanation, then another. For a brand that sold purity and trust, looking confused or less than open was especially damaging. The company later estimated the recall cost $78 million.

Perrier returned to U.S. shelves in late April 1990, but winning customers back was hard. By that June, restaurants and hotels, where Perrier had been a favorite, were slow to bring it back. One San Francisco restaurant manager said the recall had "really frightened people." Competitors had moved into the space Perrier left empty. Perrier had held about 4.4 percent of the U.S. bottled water market in 1989, and it had to fight to win that share back. The company did better in supermarkets, partly because its American business also owned other water brands, such as Poland Spring, Calistoga and Arrowhead, that shoppers could choose instead. Having more than one brand had helped the company survive a blow to its most famous one. In 1992, the Swiss food company Nestlé bought Perrier.

For any business, especially a small one built on a reputation, the lesson is clear. When something goes wrong, act fast, find out the facts before you explain, and then tell the whole story plainly. Customers can forgive an honest mistake far more easily than an explanation that keeps changing.