by Marion Nestle

Currently browsing posts about: PepsiCo

Jul 2 2018

Big Soda strong-arms California: no more soda taxes for 12 years. Shame!

In 2017, Jennifer Pomeranz and Mark Pertschuck published an article in the American Journal of Public Health titled State Preemption: A Significant and Quiet Threat to Public Health in the United States.

How right they were.

Last week, California Governor Jerry Brown signed a law banning new soda tax initiatives in the state until 2030, thereby preempting local initiatives planned and in progress.

How did this happen?

Raw, overt power politics (my emphasis throughout).  The Sacramento Bee shows how it’s done.

The Hill explains that this bill was a compromise.

The measure was a last-minute compromise to stop an initiative circulated by the beverage industry that would make it more difficult to raise state and local taxes in California.  “Mayors from countless cities have called to voice their alarm and to strongly support the compromise which this bill represents,” Brown wrote in a signing message.

Big Soda’s tactic: use California’s ballot initiative process to put forth a measure requiring a two-thirds majority to pass any new tax legislation.  Brown and those mayors must have assumed it would pass (anything to prevent new taxes).  Brown said he would agree to a 12-year moratorium on new soda taxes if the soda industry would withdraw the measure.  It did, and he signed.

In explaining the so-called “compromise” (in quotes because this was blackmail), US News quotes state senator Scott Wiener (Dem-San Francisco):

This industry is aiming a nuclear weapon at government in California and saying, ‘If you don’t do what we want we are going to pull the trigger and you are not going to be able to fund basic government services.”

In other words, the beverage industry held the state hostage. Like the Sacramento Bee, I’d call this a shakedown.

The Sacramento Bee also called it extortion—a power play by the American Beverage Association that:

appears to be working as intended. As the deadline for signing the state budget approaches this week, a developing trailer bill attached to it would give Big Soda a 12-year ban on local soda taxes in exchange for dropping a ballot initiative that would threaten the finances of cities throughout California. Who says extortion doesn’t pay?

The New York Times explains the “stunning” preemption:

Now the beverage industry has a new approach. Instead of fighting the ordinances city by city, it is turning to states, trying to pass laws preventing any local governments from taxing their products.

The reactions have been fierce.

Nancy Brown, CEO of the American Heart Association says, “We’ve seen some cynical moves to protect profits, but this soda tax ban is a new low.”   The American Heart Association issued a statement:

The bill—a last-minute, backroom deal negotiated and written in secret by beverage industry lobbyists and their allies—is a significant step backwards in the ongoing effort to reduce overconsumption of sugary drinks.

“This is one of the worst pieces of legislation I have seen in more than 30 years spent fighting for better health for kids and families,” said Nancy Brown, CEO of the American Heart Association. “We could not be more disappointed to see this bill, taken straight from the tobacco industry playbook, pass.”

The LA Times said “Shame on California lawmakers for caving in to the soda industry.”

Salon explains:

There’s a lot at stake for America’s biggest soda companies. Carbonated soft drinks – such as Coke, Fanta, Sprite, and Fresca – make up two-thirds of Coca-Cola’s production, and U.S. soda sales earned the company more than $10 billion in 2015. And PepsiCo’s soda sales – including Pepsi, 7Up, and Mountain Dew – still account for one-quarter of the company’s $38 billion in North American sales, despite a shift toward healthier products. But soda consumption fell to its lowest point in 31 years in the U.S. in 2016, according to Fortune, and Coca-Cola concedes that sweetened beverage taxes “are hurting Coke’s business.”

I’ll end with this quote from the New York Times:

Bill Monning, the Senate majority leader, was one of a handful of Democrats who voted against the bill. He called its passage “unprecedented” and said it would stop cities and counties “from being able to take steps to protect the health of their residents”…“It’s a sad day for democracy in California,” he said. “But ever the optimist I think that the outrage of Big Soda blackmailing the state legislature and the people of California is going to boomerang.”

Let’s make sure that happens.

And while we are at it, don’t let this happen in your state.  If the soda industry threatens to mess with state elections, tell your representatives and governor to resist.  California public health advocates: keep the pressure on.  Advocate for bans on sodas everywhere you can: schools, hospitals, workplaces, government offices.  Expose what the industry is doing to protect its profits at the expense of public health.  Don’t give up.  Courage!

For the record, here’s where to find out more about this shameful episode.

Jun 12 2018

Biggest global food companies, according to Forbes

Forbes has published a ranking of the top 2000 global companies (all kinds, not just food) by a composite score of revenue, profit, assets, and market value.

Forbes summarizes some of the information for food processing companies.  By its measure, Anheuser Busch, Nestlé, and PepsiCo are the top three.

Coca-Cola, however, ranks #209, a big drop from last year’s #86.  It did not have a good year last year.

You can sort the list by name or category.  I did that for four categories: Beverage, Food processing, Food retail, and Restaurants.

Walmart does not show up as a food retailer; Forbes considers it a Discount Store, even though food accounts for nearly half of Walmart’s revenues, nearly $200 billion a year.

Here are the food, beverage, retail, and restaurants that show up as among the top 250 companies, worldwide.  I only included sales and profits in this  table; you would have to add in assets and market value to understand the ranking system.

Food, beverage, retail, and restaurant companies among the biggest 250 companies worldwide.

RANK  COMPANY SALES

$ Billions

PROFITS

$ Billions

24 Walmart, US 500.3*  9.9
41 Anheuser-Busch, Belgium  56.4  7.9
48 Nestlé, Switzerland  91.2  7.3
102 PepsiCo, US  64.0  4.9
103 Unilever, Netherlands  60.6  6.8
126 Kraft-Heinz, US  26.2  11.1
209 Coca-Cola, US  33.7  1.4
211 Mondelēz International, US  26.2  3.2
239 Danone, France  27.8  2.8
241 McDonald’s, US  22.3  5.4

*About 40% of sales are from food.

This is why Walmart is the elephant in the food-business room.

Apr 10 2017

ICYMI: The tasteless Pepsi commercial–a roundup

Dec 28 2016

Drink orange juice, says Pepsi

PepsiCo has pledged to put real money behind promoting healthy foods, and it is doing just that with a new Tropicana campaign—Morning Spark.

The idea is to get millennials to drink orange juice in the morning, especially Tropicana OJ.

The campaign is going on the APlus.com site, whose cofounder is Ashton Kutcher.

The idea is to

introduce Tropicana to new audiences in new ways, through compelling and engaging content that people can connect to and want to share. Approaching 70 years, Tropicana is a heritage brand and realizes that today, more than ever, we can bring something people truly need to America’s breakfast tables – positivity and optimism. We hope this is the first step in redefining what Tropicana stands for in America’s households.

Who writes these things?  Oh well.

Here’s what the campaign is doing: a social experiment video.  The press release says:

To create the first video, Tropicana visited a coffee shop in Brooklyn on a weekday morning to hand out compliments to people and see if it sparked a change in their attitude, and it did. To see people light up and smile when we told them something positive we noticed was truly amazing. We can’t wait to do more of these efforts with A Plus.  Celebrities who shared the launch video: Ashton Kutcher, Adam Levine, Robin Thicke and Lil Wayne.

What is this about really?  “The orange juice category has faced challenges including declining sales, nutrition misconceptions and disease threatening citrus crops.”

The campaign points out the benefits of OJ: One 8-ounce glass of Tropicana’s 100% orange juice provides:

  • A day’s supply of vitamin C – an antioxidant that promotes healthy skin and gums, helps your body to absorb iron from food and helps maintain a healthy immune system.
  • Folic acid, which is essential for women of childbearing age.
  • As much potassium as a banana. Potassium helps to maintain healthy blood pressure, among other benefits.

Funny thing: the campaign does not mention the 22 grams of sugars in 8 ounces.

Really, I have no trouble with 8 ounces of orange juice even though it must represent the juice of at least three oranges.

And really, freshly squeezed OJ is utterly delicious.  It is also less sweet than Tropicana.

For nutritional purists, an orange is a better choice.

But I’m totally for advertising healthier products, so let’s give Pepsi credit for this campaign.

Here’s what the Washington Post has to say about all this (I’m quoted)

Oct 18 2016

Pepsi to reduce sugar in its drinks? Really?

PepsiCo, yesterday, announced that it had launched its sustainability report with an agenda for 2025. 

The sustainability promises look good, but reporters called me for comments only on the first goal in its Products agenda:

  1. At least two-thirds of Pepsi’s global beverage portfolio volume will have 100 calories or fewer from added sugars per 12-ounce serving.

For the record, the other Product goals are:

  1. At least three-quarters of its global foods portfolio volume will not exceed 1.1 grams of saturated fat per 100 calories.
  1. At least three-quarters of its global foods portfolio volume will not exceed 1.3 milligrams of sodium per calorie.

The reporters’ questions assumed that Pepsi plans to reduce the sugar in its full-sugar beverages.

Maybe, but that’s not clear from the press release or the report.

Here’s what I want to know:

  1. The baseline: What proportion of Pepsi drinks already have fewer than 100 calories per 12 ounces?  Pepsi makes loads of beverages that meet that target—Gatorade, bottled waters, diet sodas.
  2. The marketing plan: Will the marketing dollars shift from full-sugar to lower-sugar options?

I ask, because Pepsi’s track record on sugar reduction is not encouraging.  In 2009, Pepsi set a goal to reduce the average amount of added sugars in its drinks by 25% by 2020.

The result?  An increase in average sugars of 4% so far (Pepsi got into trouble with investors who wanted marketing focused on full-sugar beverages).

Pepsi’s sustainability report says the company is working hard to find ways to reduce sugars and “these efforts could yield significant progress.”   Let’s hope they do.

The report also explains how the company plans to reach its lower-sugar goal:

  • Reformulating
  • Creating new low-and no-calorie drinks
  • Making smaller sizes
  • Boosting promotion of lower-calorie drinks

I hope the company does these things, despite its unfortunate record on sugar promises.  We need to wait and see whether the company delivers on this one.

But I’m thinking: Surely this announcement must be designed to head off the ongoing soda tax initiatives.  Pepsi is pouring millions of dollars into fighting the taxes directly and through its membership in the American Beverage Association.

Pepsi wants to have things both ways: to appear to promote healthier beverages while it is fighting public health measures to reduce soda intake.

Let’s give the company the benefit of the doubt and hope it delivers on its promises—while doing everything we can to get those taxes passed.

Here’s one of the articles that quotes me:

The last time Pepsi tried to position itself as doing something for health, its investors got very upset,” Marion Nestle, a professor in the Department of Nutrition, Food Studies & Public Health at New York University, said in an email. In 2012, investors got mad at PepsiCo CEO Indra Nooyi for focusing on getting revenue from healthy products, Business Insider reported.

“[PepsiCo] will continue to do everything it can to promote its most profitable products,” Nestle said. “These, alas, tend to be the ones with full sugar.”

Apr 1 2016

Weekend reading: CSPI’s Carbonating the World

Center for Science in the Public Interest has produced a new report:

It’s a lavishly illustrated and well documented investigative report into soda company marketing in developing countries.

Here’s an example of the documentation, enough to explain why Coke and Pepsi are pouring billions of dollars into bottling plants and marketing in India:

 

Capture

For anyone interested in the nutrition transition from undernutrition to overnutrition in developing countries, this report is a must read.  Actually, it’s a must read for anyone who cares about diet and health.  If you do nothing else, look at the marketing illustrations from Nepal, Indonesia, or Nigeria.  They tell the story on their own.

Mar 21 2016

The UK soda tax: a tipping point?

Wonder of wonders, the UK’s Chancellor of the Exchequer, George Osborne, has put a soda tax into his new budget initiative (see BBC account, the video and text of Osborne’s speech, and the Treasury department’s fact sheet on the soda tax).

Here’s how the tax is supposed to work:

Shocking: Many of Britain's most sugary drinks contain more that the daily recommended amount for one person

Osborne says the tax will bring in £520 million ($732 million) in the first year, and he intends to use it to fund more sports in schools.

But it goes into effect in April 2018.  This is to give the industry time to reformulate products with less sugar.  But—the delay also gives the industry ample time to block the tax.

Public Health England supports the tax (see statement).

But the soda industry wasted no time reacting to this bad news.

  • Coke, Pepsi, and other soft drink companies strongly objected.
  • The immediate result: a fall in their stock prices.
  • The immediate reaction: Sue the government.  On what grounds?  Discrimination.  The tax does not affect sugary juices, milkshakes, or processed foods.

New tax: Soft drinks with more than 5g of sugar will be taxed at 6p per can or carton and drinks with more than 8g of sugar will be taxed at 8pm, which if passed on to the consumer means a can of Old Jamaica ginger beer will go up from 58p to 66p

The makers of artificial and alternative sweeteners think this will be a win for them.

Will the tax help reduce obesity?  On its own, that would be asking a lot.

Jamie Oliver, the British chef who favors the tax, says of course it won’t work on its own.  It needs to be accompanied by six additional actions (food labels, better school food, curbs on marketing to kids, etc.).

Why are soda companies so worried about this?  It could be catching.

Will the UK tax stick?  Watch Big Soda pull out every stop on this one.

And think about what they are doing to fight soda taxes when you read or hear that soda companies want to be part of the solution to obesity.

Mar 11 2016

Should the East River Pepsi-Cola sign be landmarked?

An editor at the New York Times invited me to write an op-ed on the proposed landmarking of the East River Pepsi-Cola sign, but then said:

We’re not going to use this. People really love that Pepsi sign so much that they don’t want to hear arguments against it.

So I offered it to the Daily News.  I’ve written for it before.  Its editors are highly professional and a pleasure to work with.  And it goes to an audience to which I do not usually have access.   See what you think.

The Long Island City Pepsi-Cola sign: Hazard, not landmark

NEW YORK DAILY NEWS
Thursday, March 10, 2016, 5:00 AM
Looks pretty. Tastes sweet. Has ugly side effects.

Looks pretty. Tastes sweet. Has ugly side effects.

I did not know whether to laugh or cry when I read that the city’s Landmarks Preservation Commission had deemed the Pepsi-Cola sign in Long Island City, Queens, so worthy of permanent preservation that it was considering it for landmark status.

Granted, the neon monument has been part of the East River landscape for the past 80 years. And yes, there is precedent for landmarking a sign rather than a building. Pine Bluff, Ark., chose to landmark a McDonald’s sign, and Cambridge, Mass., preserved a Shell Oil sign.

But the fact is that the Pepsi-Cola sign is a highly visible expression of soda industry marketing. The sign advertises a sugar-sweetened beverage — precisely what the city Health Department has, with good reason, been working hard to discourage New Yorkers from consuming in large quantities.

For the past few years, subway poster campaigns have featured the astonishing amounts of sugar contained in carbonated sodas — close to a teaspoon per ounce. They have also illustrated how this excessive sugar turns to fat in the body, how sugary beverages raise the risk for type 2 diabetes, and how much walking it takes to work off the calories in a single 20-ounce drink — a trek from Union Square to Brooklyn.

And let’s not forget former Mayor Michael Bloomberg’s ultimately unsuccessful though valiant attempt to set a cap of 16 ounces on sugary beverages sold in places under city jurisdiction.

That particular tactic was hugely controversial. But nobody can seriously dispute that sugary drinks contribute to obesity and its consequences.

Pepsi may be the underdog — Americans drink more Coke — but it is a very large runnerup in the sugary drink category. Its revenues in 2015 amounted to $63 billion worldwide.

Pepsi is Big Soda incarnate. It works hard to maintain that position, spending more than $200 million a year advertising Pepsi-Cola alone. It is also Big Food. Altogether it spends about $2 billion a year on worldwide marketing for all of its products, including Frito-Lay snack foods and other brands.

To generate sales, Pepsi relentlessly targets its marketing to teenagers and young adults and, as part of that approach, generously pays sports and music figures to endorse its products.

We’ve all seen the Super Bowl ads. We know about the reported $50 million deal with Beyoncé. And like Coca-Cola, although not quite to the same extent, PepsiCo funds health organizations such as the American heart and cancer associations, and contributes to health programs at universities such as Yale. All of this can buy loyalty from health professionals, and also silence from them about the role of soft drinks in health.

Soda advertising is so much a part of the American landscape that most of us don’t even notice it anymore. It is just there. And that’s how the company intends it. As an industry executive once told me, effective advertising is supposed to slip below the radar of critical thinking.

I’m guessing that’s what’s happening with the Pepsi-Cola sign. Its significance as advertising for a sugary drink — one best consumed infrequently and in small amounts — has become unnoticeable. To the landmarks folks, therefore, this is just a quaint piece of history — not an active, pulsating sign promoting something dangerous to human health.

But landmarking the Pepsi sign, which is visible to millions of New Yorkers and tourists every single day, would engage New Yorkers as formal partners in marketing sugary drinks.

I can’t help but remember the Camel cigarette sign in Times Square, for years blowing smoke rings. Would today’s Landmarks Preservation Commission want that billboard preserved for eternity? Or would it blush at the thought of promoting and sustaining an icon of corporate marketing, and of an unhealthful product at that?

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