Currently browsing posts about: PepsiCo

A blog post from Fernando Quintero on the Berkeley Media Studies Group’s site alerted me to PepsiCo’s latest example of corporate social responsibility: an additional $50,000 donation for scholarships and internships to the National Association of Hispanic Journalists bringing the total to $100,000.

Hispanic populations in the United States have higher than average rates of obesity, type 2 diabetes, and other chronic conditions associated with overconsumption of sodas and snacks.

Such generosity raises questions about what Pepsi is buying from this group.

The NAHJ says:

We are thrilled to have PepsiCo as a new partner committed to building a stronger Latino community,” said Ivan Roman, Executive Director for NAHJ. “The company’s support as we get more Hispanics into journalism to tell our stories is key to making sure our communities are represented fairly in the news media, while giving them a louder voice in the civic dialogue.

Why do I think that journalists in this Association are unlikely to be telling stories like these:

• The relationship of soda and snack consumption to obesity and type 2 diabetes in Hispanic communities
• The relationship of soda and snack consumption to Hispanic childhood obesity
• How soda intake among Hispanic children leads to dental decay
• Soda company marketing practices in Hispanic communities
• The effects of soda and snack marketing on dietary practices and health in countries in Latin America

Pepsi says:

As part of La Promesa de PepsiCo, the company is building relationships with the community, strengthening its strategic partnerships, and sponsoring national Hispanic organizations like: CHCI (Congressional Hispanic Caucus Institute), HACR (Hispanic Association on Corporate Responsibility), LULAC (League of United Latin American Citizens), NAHJ (National Association of Hispanic Journalists), and NCLR (National Council of La Raza) among others.

A page from the tobacco-industry playbook, no?

Dr. Karen Sokal-Gutierrez, a pediatrician I know who teaches in the UCSF-Berkeley Joint Medical Program, is involved in a health program in El Salvador that among other things focuses on the dental health of urban and rural kids.

As she explains, when she was a Peace Corps volunteer thirty years ago, the kids had perfect teeth and beautiful smiles.  She has a collection of photographs to prove it (she sent me this one).

Today, kids’ teeth are rotted to the roots as a result of the introduction of sugary drinks and snacks.  She and her students are working to educate parents to take care of their kids’ teeth but also to feed their kids healthier foods.

PBS NewsHour has just done a segment on her program (it’s a bit over 7 minutes).

This is well worth watching as a case study of:

• The efforts of junk food and soda companies to sell products in developing countries.
• The effects of junk foods and sodas on kids’ health.
• The hard work that Dr. Sokal-Gutierrez and her colleagues must do to counteract these effects.
• The investigative and production skills of recent journalism school graduates.

The segment is also worth watching for the priceless comments of Coke and Pepsi (these come at  about 4.3 minutes).

Coke: “With basic dental hygiene practices, people have enjoyed our products for decades without risk to their dental health.”

Pepsi: “We believe that parents should decide what their children eat and drink…Any food and beverage with sugars and starches, including some of our beverages can contribute to the development of cavities.”

Those of us who have access to fluoridated water, toothbrushes, and dental care don’t usually think of severe dental disease as a consequence of drinking sodas.

We should.

Addition:  Dr. Sokal-Gutierrez asked that I also post a photograph of what the kids’ teeth look like.  Happy to oblige.

Mayor Bloomberg’s proposal to limit sugary soft drinks to 16 ounces has elicited an industry counter attack as well as much attention to the role of sugary drinks in obesity.

The soda industry established a new organization, “Let’s Clear It Up,” with a website to spin the science.

Soda is a hot topic. And the conversation is full of opinions and myths, but not enough facts. America’s beverage companies created this site to clear a few things up about the products we make. So read on. Learn. And share the clarity.

Myth: The obesity epidemic can be reversed if people stop drinking soda. [I’m not aware that anyone is claiming this.  Bloomberg’s proposal is aimed at making it easier for soda drinkers to reduce calorie intake.]

Fact: Sugar-sweetened beverages account for only 7% of the calories in the average American’s diet, according to government data. [The figure applies to everyone over the age of 2—to those who do and do not drink sodas.  The percentage is much higher for soda drinkers.]

Coca-Cola is using a second strategy: divert attention.  Its full-page ad in Sunday’s New York Times said:

Everything in moderation.  Except fun, try to have lots of that.

Our nation is facing an obesity problem and we’re taking steps to be part of the solution.  By promoting balanced diets and active lifestyles, we can make a positive difference.

By “balanced diets” Coke means varying package sizes.  By “active lifestyles” Coke means partnerships with Boys & Girls Clubs of America and gifts to national parks.  This approach merits its own website: livepositively.com.

And then we have USA Today’s not-to-be-missed interview with Katie Bayne, Coke’s president of sparkling beverages in North America:

Q: Is there any merit to limits being placed on the size of sugary drinks folks can buy?

A: Sugary drinks can be a part of any diet as long as your calories in balance with the calories out. Our responsibility is to provide drink in all the sizes that consumers might need. [Need?]

Q: But critics call soft drinks “empty” calories.

A: A calorie is a calorie. What our drinks offer is hydration. That’s essential to the human body. We offer great taste and benefits whether it’s an uplift or carbohydrates or energy. We don’t believe in empty calories. We believe in hydration. [Water, anyone?]

Finally, there’s the Washington Post interview with Todd Putman, a former Coke marketing executive now in recovery.

Putman, whose positions at Coca-Cola included U.S. head of marketing for carbonated drinks, said in the interview that among his achievements was tailoring the company’s national advertising campaigns to specific groups. The approach helped Coca-Cola intensify marketing to target audiences such as African Americans and Hispanics.

“It was just a fact that Hispanics and African Americans have higher per capita consumption of sugar-based soft drinks than white Americans,” he said. “We knew that if we got more products into those environments those segments would drink more.”

Is the soda industry behind the Center for Consumer Freedom’s Nanny Bloomberg ad?  I’ve yet to hear denials.

If the Center for Consumer Freedom (CCF) is placing ads attacking Mayor Bloomberg’s proposal to limit the size of soft drinks to 16 ounces (see yesterday’s post), he must have done something right.

CCF, as I have explained previously, is used as an attack dog by the National Restaurant Association and other food and beverage organizations to stave off criticism of their contributions to obesity, poor health, and environmental degradation.

It gets paid to use tactics that food and beverage companies are afraid to do on their own because they might offend customers or stockholders.  Its funders get to hide behind these tactics.

CCF does not disclose its contributors.  Could the American Beverage Association have paid CCF to do this ad?

Coke and Pepsi are prominent members of the Beverage Association.  If so, they are now on record in overt opposition to public health efforts.

I welcome statements from the American Beverage Association and its members to the contrary.

On April 20, I received a letter from a Gatorade PR person commenting on one of my posts reposted at the Atlantic Health/Food section.

After reading the letter, I searched my posts for references to Gatorade but can’t find anything specific other than my reporting the more than $100 million a year Pepsi spends to advertise this product.

So I’m guessing the letter must be referring to my comments about sports drinks in general:

Hi Marion –

I recently read your article in The Atlantic and would like to make sure you have the most current information. Your article criticizes sports drinks, advising against them because the sugars and carbs will make you fat. It also discusses the main sweetener in most sports drinks is high fructose corn syrup.

I would like to point out the carbohydrates and calories are functional in Gatorade, a sports drink, and are meant to provide fuel specifically for athletes.

The ingredients in Gatorade are backed by years of scientific research that support the need for carbohydrate sugars for fuel during training or competition and we only recommend Gatorade during the active occasion.

Also, high fructose corn syrup is not an ingredient in any Gatorade products.

For those looking for a lower-calorie sports beverage, Gatorade offers G2, which delivers the same amount of electrolytes as original Gatorade but with half the calories. Gatorade also recently introduced G Series FIT 02 Perform, which is designed for a fitness athlete and has 10 calories per 8oz serving.

Please let me know if you have any questions or need any additional information.

Best,

Katie Montiel, Gatorade Communications

I’m always happy to hear from interested readers.

And aren’t you glad to know that sugar is a functional (translation: “good-for-you”) ingredient in Gatorade?

Pepsi is about to put 8,700 of its worldwide employees out of work.   This might make you think the company is in trouble.

Let’s have some fun with the numbers reported by Reuters in today’s New York Times. 

Pepsi reports increases in:

• Annual dividends: 4%
• Expenditures on advertising: an additional $500 million
• Expenditures on display racks: an additional $100 million
• Fourth quarter profits: from $1.37 billion a year ago to $1.42 billion
• Earnings per share: from 85 cents a year ago to 89 cents
• Revenues: up 11% to $20.2 billion

Let’s get the logic straight here:

• PepsiCo made $1.42 billion in profits last quarter.
• The company’s revenues, profits, and returns to investors are increasing.
• QED: it is adding 8,700 out-of-work people to an already depressed job economy.

Only Wall Street would view Pepsi’s bottom line as problematic and its CEO, Indra Nooyi, as in trouble:

Ms. Nooyi has come under pressure from Wall Street for a stagnant stock price and a lagging North American beverage business. She has been criticized for taking her eye off the core business of sodas to expand into healthier products, such as hummus and drinkable oatmeal.

When it comes to Wall Street, forget about jobs and health.  Only one thing counts: meeting those quarterly growth targets.

Advocates for a healthier food system should not expect much help from food corporations.

They will only be able to help if forced to by public pressure and regulation.

I’ve been saving up items about beverages, mostly having to do with marketing:

Soda companies vs. civic public health campaigns: In strategies reminiscent of those used by tobacco companies, soda companies are filing suit to obtain documents from public agencies all over the country.  Digging them up takes staff time and effort and slows down the real work of these agencies—the point of this approach.

Sonic’s marketing campaign, Limeades for Learning (“when you sip, kids learn”) encourages purchasers of its high-calorie drinks (620 for a medium, 950 for a large) to vote for school projects.

Dr Pepper Snapple’s diet—oops, low-calorie—10-calorie Dr Pepper Ten is aimed at men.  Men, it seems, like low-calorie sodas but squirm at the notion of diet sodas.

Coke covers both bases.  Diet Coke targets women and Coke Zero targets men in an “it’s not for women” campaign.   Is this ad offensive?  It not only excludes half the market, says Food Navigator’s Carolyn Scott-Thomas, but is

patronizing to both men and women in its reinforcement of what I had (perhaps naively) hoped were outdated stereotypes….It deliberately picks at the edges of our comfort zones.  Is it OK to be sexist if it’s done with irony?…Provocation is a blunt instrument.  It may prove effective for sales—perhaps as effective as sexually explicit marketing—but it is still crude and obtuse.”

She asks: “Would this ad be offensive if it involved a bunch of redneck clichés and proclaimed ‘it’s not for blacks’?  You bet it would.”

Coca-Cola has launched a global music effort to connect with teens.  Coke CEO Muhtar Kent says:

Our success in growing our sparkling category today depends on our ability to grow and connect with teens, the generation of tomorrow.

Pepsi, not to be outdone, has invented a social marketing vending machine for the digital age.  Buy a drink and you now have the opportunity to send one as a gift to a friend or a random stranger.

The Committee on Nutrition, American Academy of Pediatrics weighs in on sports and energy drinks.  Its tough report begins with the statement that “Sports and energy drinks are being marketed to children and adolescents for a variety of inappropriate uses.”

Sports drinks…may contain carbohydrates, minerals, electrolytes, and flavoring and are intended to replenish water and electrolytes lost through sweating during exercise.

In contrast…energy drinks also contain substances that act as nonnutritive stimulants, such as caffeine, guarana, taurine, ginseng, l-carnitine, creatine, and/or glucuronolactone, with purported ergogenic or performance-enhancing effects.

The report ends with this unambiguous conclusion:

the use of sports drinks in place of water on the sports field or in the school lunchroom is generally unnecessary. Stimulant containing energy drinks have no place in the diets of children or adolescents.

In response, Red Bull says it is not marketing to children.  Instead, it says, the company totally follows the “agreed codes of practice for the marketing and labelling of energy drinks.”

Just for fun I looked up some advertising budgets reported in Advertising Age. For 2010, Coca-Cola spent $267 million just to advertise Coke, Pepsi spent $154 million just to advertise Pepsi and another $113 million for Gatorade, and Dr. Pepper spent a mere $22 million for Snapple.

These expenses are just for those individual products and just for campaigns run through advertising agencies.  Pepsi’s total advertising budget that year was $1.01 billion.

Water, anyone?

Lobbyists are supposed to report what they do and how much money they spend doing it, but this information is not easily available to the public.

CBS News reports that PepsiCo spent $750,000 to lobby government last quarter.  This comes to roughly $3 million annually, a drop in PepsiCo’s annual $30.6 billion sales in the U.S.—$57.8 billion worldwide.

What is Pepsi lobbying about?  Open Secrets publishes the filing information on its website.

PepsiCo lobbied the House, Senate, Executive Office of the President, FTC, FDA, and USDA, focusing on these issues, among others:

• Childhood Obesity (generally, no specific legislation)
• Food and beverage labeling (generally, no specific legislation)
• Marketing and advertising issues in response to Interagency Working Group on Food Marketed to Children (IWG) (see previous posts)
• Restrictions on use of supplemental nutrition assistance program (no specific legislation)
• Implementation of S. 3307-healthy, Hunger-Free Kids Act of 2010
• Biofuels policy generally

I’m especially interested in lobbying against the IWG guidelines.  Pepsi, of course, was not alone in opposing them.  As I noted in a previous post, the the Sunlight Foundation reported on food companies lobbying against them.

Media companies also opposed the IWG guidelines, as shown by Viacom’s annual filing with the Security and Exchange Commission, a document forwarded to me by Jeffrey Chester of the Center for Digital Democracy:

…some U.S. policymakers have sought limitations on food and beverage marketing in media popular with children and teens. In April 2011, the Interagency Working Group on Food Marketed to Children (the “IWG”)…requested comment on proposed nutritional restrictions for food and beverage marketing directed to children and teens aged 17 years and under.

Although the guidelines are nominally voluntary, if implemented by food and beverage marketers, they could have a negative impact on our Media Networks advertising revenues, particularly for our networks with programming targeted to children and teens.

Congress asked the FTC to set up the Interagency Working Group to propose guidelines on marketing foods to kids.  Did it really think food companies would accept such guidelines, voluntarily at that?

As I keep pointing out, food companies have to market to kids to sell products and grow sales every quarter.

If they don’t sell products to kids in the U.S., they will intensify efforts to sell products to kids in developing countries, thereby outsourcing childhood obesity.

Surely it’s time for mandatory rules about marketing junk foods to kids?  If not now, how about soon?