by Marion Nestle

Currently browsing posts about: PepsiCo

Apr 16 2010

Can PepsiCo help alleviate world hunger?

In the latest issue of the American Journal of Public Health, Derek Yach and his colleagues at PepsiCo in Purchase, NY, say yes, it can, in answer to the question they pose in their article, “Can the food industry help tackle the growing global burden of undernutrition?”

If we are to successfully combat global undernutrition, efforts must be sustained by multiple stakeholders from various sectors. We believe that trust is built through industry’s demonstration of practical actions that improve health, and recognition of these actions by governments and nongovernmental organizations. Only through new and innovative public–private sector partnerships can we truly make a difference.

Three international public health leaders counter with no, it can’t, in an article entitled “The snack attack.”  They point to irreconcilable differences between the the goals of private industry and public health:

The problem lies with food, drink, and associated companies whose profits depend on products that damage public health and that also have damaging social, economic, and environmental impacts. These most of all include transnational companies, of which PepsiCo is one. To succeed, big business must sustain and increase annual turnover, profit, and share price…We suggest that public health professionals see papers such as those of Yach et al. as part of the marketing strategies of transnational food and drink companies…The privatization of public health does not work.

This argument reminds me of the editorial that David Ludwig and I wrote for JAMA late in 2008: “Can the food industry play a constructive role in the obesity epidemic?”  We concluded:

With respect to obesity, the food industry has acted at times constructively, at times outrageously. But inferences from any one action miss a fundamental point: in a market-driven economy, industry tends to act opportunistically in the interests of maximizing profit. Problems arise when society fails to perceive this situation accurately.

While visionary CEOs and enlightened food company cultures may exist, society cannot depend on them to address obesity voluntarily, any more than it can base national strategies to reduce highway fatalities and global warming solely on the goodwill of the automobile industry. Rather, appropriate checks and balances are needed to align the financial interests of the food industry with the goals of public health.

PepsiCo owns Pepsi Cola, of course, but also Gatorade, Frito-Lay snacks, and Aquafina water, among many other brands.  According to Advertising Age (June 22, 2009), PepsiCo earned $43 billion in worldwide sales in 2008. Its product-specific advertising expenditures in 2008, just for “measured media” (meaning run through advertising agencies) were, for example:

  • $162 million for Gatorade
  • $145 million for Pepsi Cola
  • $27 million for Tostitos
  • $14 million for Doritos
  • $11 million for Fritos.

These figures, staggering as they may be, do not include the amounts Pepsi spends on lobbying, supporting the American Beverage Association’s efforts to fight soda taxes, funding medical research at Yale, or marketing to children and adults in India and other developing countries, as previously discussed on this site.

Is corporate “social responsibility” really responsible?  Or is it just marketing?  And what should be the checks and balances?  You decide.

Added April 17: This comes from a former employee of PepsiCo who asks that I post this anonymously:

I think you probably know that the “marketing dollars,” the share (ads/direct marketing), of companies like Pepsico are only a fraction of what are their actually marketing/promotions budgets.  Many years ago, PepsiCo made a conscious effort to redefine/shift budgets to what is called promotional spending from traditional marketing spending.  In doing so though, they keep the control and allocation of the funds in the hands of the marketing teams.

For Pepsi I know that the $145 million you mention is probably only 25% of what Pepsi “internally” considers consumer marketing spending.  For example, direct to retails “incentive” bonus funds are given for moving volume — those funds are almost entirely funneled into the retails increasing consumer marketing to their direct customers.  There are even examples where they can hide 10′s of millions of dollars at a time by linking event sponsorships (stadiums, etc.) to retailer agreements, thus moving those dollars to long-term “capital expenditures.”  I would guess that for Pepsi alone that that $145 million could be as much as a billion a year for direct and indirect consumer marketing spending.

It is not just obscene how much gets spent to increase volume… since, for companies like PepsiCo, Coke, etc.  Volume is the only way they generate higher profit to their shareholders.  As you say, to expect a corporation to do things for the good of the consumer just shows a misunderstanding of their primary function when they are a for-profit entity.

Mar 18 2010

What are food companies doing about childhood obesity?

Food companies interested in doing something meaningful to prevent childhood obesity are in a bind.  Preventing obesity usually means staying active; eating real, not processed, foods; and reserving soft drinks and juice drinks for special occasions.  None of this is good for the processed food business.  At best, food and beverage companies can make their products a bit less junky and back off from marketing to children.  In return, they can use the small changes they make for marketing purposes.

Perhaps as a result of Michelle Obama’s campaign (see yesterday’s post), companies are falling all over themselves – and with much fanfare – to tweak their products.

GROCERY MANUFACTURERS ASSOCIATION (GMA):  By all reports, GMA members applauded Mrs. Obama’s remarks.  GMA says its member companies are already doing what she asked.

Parke Wilde, a professor at the Tufts School of Nutrition (and food policy blogger), gave a talk at that meeting in a session dismissingly titled,  “The New Foodism.”  His comment:

I enjoyed hearing Michelle Obama’s talk, which was well written and delivered and fairly forceful in places. In my afternoon panel, I said grocery manufacturers would find some threatening themes in books and documentaries promoting local and organic and sustainable food, but that there is also much of substance and value. Then, Susan Borra [Edelman Public Relations] and Sally Squires [Powell Tate Public Relations] in the next session said that grocery manufacturers are frequent subjects of unfair criticism and have nothing to apologize for.

Take that, you new foodists!

MARS must think it knows more than the FDA about how to label food packages.  It is developing its own version of front-of-package labels. It volunteered to put calories on the front of its candies; its multi-pack candies ay 210 calories per serving on the front.  That number, however, remains on the back of the small candy store packs.  Mars’ new labeling plans use the complex scheme used in Europe.  I’m guessing this is a bold attempt to head off what it thinks the FDA might do – traffic lights.

KRAFT announces that it is voluntarily reducing the sodium in its foods by 10% by 2012.  Kraft’s Macaroni & Cheese (SpongeBob package) has 580 mg sodium per serving and there are two servings in one of those small boxes: 1160 in total.  A 10% reduction will bring it down to 1050 mg within two years.  The upper recommended limit for an adult is 2300 mg/day.

PEPSICO announced “a voluntary policy to stop sales of full-sugar soft drinks to primary and secondary schools worldwide by 2012.”  In a press statement, the Yale Rudd Center quotes Kelly Brownell saying that “tobacco companies were notorious for counteracting declining sales in the U.S. with exploitation of markets elsewhere, particularly in developing countries:”

it will be important to monitor whether the mere presence of beverage companies in schools increases demand for sugared beverages through branding, even if full-sugar beverages themselves are unavailable…This appears to be a good faith effort from a progressive company and I hope other beverage companies follow their lead…this announcement definitely represents progress [Note: see clarification at end of post].

According to PepsiCo, this new policy brings its international actions in line with what it is already doing in the U.S.  The policy itself is voluntary, uses words like “encourage,” assures schools that the company is not telling them what to do, and won’t be fully implemented until 2010.  It keeps vending machines in schools and still allows for plenty of branded sugary drinks: Gatorade, juice drinks, and sweetened milk for example.

Could any of this have anything to do with Kelly Brownell’s forceful endorsement of soda taxes?

LOBBYING: The Center for Responsive Politics says food companies spent big money on lobbying last year, and notes an enormous increase in the amount spent by the American Beverage Association (soda taxes, anyone?).  For example:

American Beverage Assn $18,850,000
Coca-Cola Co $9,390,000
PepsiCo Inc $9,159,500
Coca-Cola Enterprises $3,020,000
National Restaurant Assn $2,917,000
Mars Inc $1,655,000

How to view all this?  I see the company promises as useful first steps.  But how about the basic philosophical question we “new foodists” love to ask: “is a better-for-you junk food a good choice?”

OK.  We have the Public Relations.  Now let’s see what these companies really will do.

Addendum: I received a note clarifying Kelly Brownell’s role in the PepsiCo press release from Rebecca Gertsmark Oren,Communications Director,The Rudd Center for Food Policy and Obesity,Yale University:

The Rudd Center did not work with PepsiCo on their initiative to stop sales of full-sugar beverages in schools worldwide, nor did we jointly issue a press release. A statement released by Kelly Brownell in response to PepsiCo’s announcement was simply intended to commend what appears to be a step in the right direction. As Kelly’s statement also mentioned, there is still plenty of work to be done. It’s also worth noting that the Rudd Center does not take funding from industry.

Mar 11 2010

Does fighting obesity also mean fighting corporations? So it seems

Corporations go to a lot of trouble to neutralize potential critics.   Recent examples: two co-optations (McDonald’s alliance with Weight Watchers and PepsiCo’s with the Yale School of Medicine) and one aggression (Disney’s forced expulsion of the Center for Commercial-Free Childhood from Harvard).

Co-optation is the winning over or neutralization of opponents by bringing them into the fold.  It works well.

Let’s start with the new partnership between Weight Watchers and McDonald’s.  OK.  This is happening in New Zealand, not here, but it is still a good example.  McDonald’s New Zealand makes three meals that meet criteria for 6 Weight Watchers’ points.    Will Weight Watchers New Zealand suggest that its members cut down on fast food?  Not likely.

Next, Yale.  Yale Medical School proudly announces that PepsiCo has agreed to fund a new fellowship.  This fellowship, which creates a new position in the MD-PhD program, is for doctoral work in nutrition science.

Dr. Robert Alpern, dean and the Ensign Professor at Yale School of Medicine, says of this gift:

PepsiCo’s commitment to improving health through proper nutrition is of great importance to the well-being of people in this country and throughout the world. We are delighted that they are expanding their research in this area and that they have chosen Yale as a partner for this endeavor.

You can’t satirize something like this, but why am I guessing that recipients of this fellowship are unlikely to study the effects of food marketing on obesity or the effects of fructose on metabolism or to advise their overweight patients to cut down on soft drinks? (Thanks to Michele Simon who commented on it on her newly restored blog, Sunday, March 7).

And then there is yesterday’s ugly story in the New York Times about Disney’s retaliation against the Center for Commercial-Free Childhood which had successfully gotten the company to back off on its advertising for Baby Einstein videos.  By all reports, Disney pressured the Harvard unit that housed the Center to evict the Center under truly shameful circumstances.

The moral: if you want to do something to prevent childhood and adult obesity, you are working against the economic interests of corporations that profit from kids eating too much food or watching too much television.  And you must take great care to hold on to your independence.

Apr 29 2009

Is Stevia really “natural?”

The April 26 New York Times Magazine carried a seductive ad on page 15 for PepsiCo’s “Trop50 orange juice goodness with 50% less calories and sugar…And no artificial sweeteners”  PepsiCo performs this miracle by diluting the juice by half with water (really, you could do this at home).  But in case the result isn’t sweet enough for you, Trop50 adds the sweetener, Stevia.

PepsiCo can get away with claiming that its juice drink has no artificial sweeteners.  Because Stevia is isolated from leaves of the Stevia plant, the FDA lets companies claim it is “natural.”

We can debate whether a chemical sweetener isolated from Stevia leaves is really “natural” but here’s another problem: Stevia doesn’t taste like sugar.  Companies have to fuss with it to cover up its off taste.  And, they must do so “without detracting from the perceived benefits of its natural status.”  Flavor companies are working like mad to find substances that block Stevia’s bitter taste, mask its off flavors, and extend its sweetness, while staying within the scope of what the FDA allows as “natural.”

Yesterday, I received an e-mail from a Stevia PR representative eager for me to see the company’s website.  “Naturally delicious” anyone?

Feb 26 2009

Food marketing news II: Baked Lays

Food marketing is on my mind these days.  It clearly is also on the mind of marketers at Pepsi.   What’s wrong with you women.  You aren’t buying enough Baked Lays? Pepsi’s research on your feelings about snacking and guilt reveals that you want foods that are healthier.  Pepsi’s answer to this problem?  New packaging, of course.   This ad is probably too small to read but here’s what it says: First woman: “These things are the best invention since the push-up bra.”  Second woman: “I wouldn’t go that far.”  I wouldn’t either, alas.

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Feb 25 2009

The news in food marketing: love of Tropicana packaging?

When it comes to food marketing, I know I live on another planet but really, doesn’t the fuss over the packaging of Tropicana go too far?  According to the report in the New York Times, consumers are so upset over Pepsi’s new Tropicana carton design that they have forced Pepsi to withdraw it.  Pepsi, it seems, underestimated the deep emotional bond its customers had with the original packaging.  Deep emotional bond?  With orange juice packaging?  Readers: I need some help with this one.

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As if that weren’t enough, CSPI’s Margo Wootan sends me the latest newsletter from the Council of Better Business Bureaus giving details of voluntary efforts by food companies to improve the nutritional quality of products marketed to kids.   Do these seem like significant improvements?

Finally, the new USDA Secretary has just announced a partnership with Disney and the Ad Council to promote the MyPyramid for kids.  Isn’t this nice of Disney?

Feb 10 2009

Response to Pepsi ads

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Thanks to everyone who sent me this link to this interesting way to interpret those Obama-like Pepsi ads.

Oct 16 2008

Bottled water backlash hits Pepsi

Andrew Martin begins his account of the latest Pepsi quarterly report like this: “Tap water is making a comeback.  That’s bad news for PepsiCo’s profits.”  Sales are down 10%.  Why?  People aren’t buying as much soda or bottled water.  Score one for the environmental movement.

The Environmental Working Group says the plastic bottles are bad for the environment but that’s not all.  Its latest report tests the waters and finds plenty of fertilizer and drug residues in them. Oh great.

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