Currently browsing posts about: Food-industry

Really, you can’t make this stuff up.  KFC has a new promotion with Susan G. Komen for the Cure, the group that raises funds to fight breast cancer.  The campaign is called “Buckets for the Cure.”

Participating KFC franchise locations will be selling specially designed pink buckets of grilled and Original Recipe chicken. KFC has pledged 50 cents to Komen for every pink bucket ordered by its restaurant operators during the promotion period, with a minimum donation of $1 million and a goal to raise more than $8 million. Twenty-five percent of the funds raised will be earmarked to Komen’s 120-plus domestic Affiliates for breast cancer programs in their communities. The remainder of the funds will support Komen’s national research and community programs.

OK, scientists are still arguing about the dietary determinants of breast cancer and aren’t too worried about fat, but they do worry about body weight.  Maintaining a healthy body weight is still the first recommendation of the American Cancer Society, for example.  Isn’t this campaign an incentive to buy as many buckets of KFC as you can?

On the topic of KFC’s pink buckets: the Dogwood Alliance is collecting signatures on a petition to stop KFC from destroying forests to make them in any color.

KFC buys from International Paper, a company notorious for “business as usual” destructive forest management practices like large-scale clearcutting, conversion of natural forests to plantations and reliance on toxic chemicals in forest management.

Dogwood wants KFC to use more environmentally friendly packaging for its buckets.  It has collected more than 9,000 signatures so far.  Here’s where you can add yours.

Addition, May 1: Thanks to Michelle Simon for forwarding this clip from Colbert.  A must-see.  It starts after the worm story at 1:15.

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.

Who knew that the food ingredient business ran on bribes?  The New York Times (print edition) calls its report of the latest scandal, “Hidden Ingredient: The Sweetener.”  By “sweetener,” the Times is not refering to aspartame or even Splenda: it means bribes.

You are an ingredient supplier and want a big food company like Kraft, Frito-Lay, or Safeway to buy your products?  Easy.  Bribe their purchasing managers.

In my book, Food Politics, I discuss food industry sales tactics ranging from soft (advertising, lobbying) to hard (manipulating media, cozying up to federal officials, and suing critics).  These, as I point out, are legal.  Fixing prices, is not.  Neither is bribery.

This is not a pretty story.  Managers were bribed to purchase inferior ingredients such as moldy tomato sauce.  Companies relied on the suppliers for quality assurance.

The moral: companies need to do their own product testing and consumers need to demand that they do.

Thanks to William Neuman of the Times for his excellent investigative report, handicapped as it was by not being able to interview the jailed perpetrators.

The Government Accountability Office (GAO), which does research in response to questions from members of Congress (in this case, Charles Grassley, Rep-Iowa),  has just released a report on agricultural concentration and food prices.  Concentration, for this purpose, has a specific meaning: the share of sales held by the four largest companies.

Grassley wanted to know: is increasing concentration in the food sector responsible for the recent rise in food prices.  The GAO says no, but check out its findings about what’s happening in the food industry.  Examples:

• Less than 2% of farms accounted for 50% of farm sales in 2007 (See Table on page 10).
• The top four concentration in grocery chains more than doubled from 1982 to 2005, from 16% to 36% (page 12).
• The concentration in meat also has nearly doubled.  Beef concentration went from 41% to 79%, pork went from 36% to 63%, and poultry went from 27% to 57% (page 18).

Only two sectors have become less concentrated: Wet corn milling (translation: high fructose corn syrup) from 74% to 69%, and breakfast cereals (86% to 78%).  No wonder the Big Four Breakfast Cereals (General Mills, Kellogg, Post, Quaker) are so desperately pushing their wares these days.

And do take a look at the figure on page 19, which illustrates the steady decline since 1980 of the proportion of the food dollar that goes to the farmer (from 30% to less than 20%), and the steady increase in the proportion going to food marketing (from 70% to more than 80%).

The USDA must be really worried about all this.  Thanks to Maya for telling me that USDA has teamed up with the Justice Department to take a look at legal ramifications of increasing agricultural concentration.  Why?  America does best with “a fair and competitive marketplace that benefits agriculture, rural economies and American consumers,” says the USDA Secretary.

The Justice Department has its own interests in this matter: the anti-trust implications of food sector concentration.

I’m guessing that Senator Grassley wanted GAO to demonstrate that agricultural concentration does not affect prices and, therefore, is good for consumers.  Instead, the GAO report focuses attention on just how concentrated agriculture had become.  Let’s keep a close eye on this one.

Adam Voiland of U.S. News and World Report interviewed David Ludwig and me for this story based on our recent JAMA article.  He’s packed a lot of information into these 10 categories, which start with #1, the billions advertisers spend on marketing to kids, and end with #10, food industry attacks on critics (this means me).  Check out the links!

My commentary with Dr. David Ludwig, author of Ending the Food Fight, has just been published in the October 15 JAMA (the Journal of the American Medical Association).  Here’s the title: Can the food industry play a constructive role in the obesity epidemic?  Well, can it?  I have my doubts, but read it and see what you think.