After previously blogging about the Nestle junk food barge, AlterNet asked me to write an article on the topic. How could I say no? Please read the expanded version of this story, this time with plenty of quotes, including an NGO in Brazil working to stop this very sort of marketing.
Big Food
How Did PepsiCo’s CEO Infiltrate the Robert Wood Johnson Foundation’s Annual Report on Obesity?
Because I tend to focus my attention on news being generated by the major food companies, I don’t always pay close attention to the latest scary reports on obesity data. So when the annual report called F as in Fat: How Obesity Policies are Failing America came out this week, I just thought, Oh there’s that report again with the awful name, with the same gloomy numbers as last year.
But then I got an interesting email message forwarded from New York University professor and food politics maven Marion Nestle that made me realize I should pay closer attention to this year’s report. The email was from Harold Goldstein, executive director of the highly effective non-profit, California Center for Public Health Advocacy. He was questioning how the CEO of PepsiCo was given 2 pages of airtime in the report. What was that? The CEO of a major company contributing to the very facts and figures contained within the 124-page document was offered space to make her case?
Under the heading, “A Personal Perspective,” here is just a sampling of what PepsiCo CEO Indra Nooyi had to say: (her entire missive is on pages 44-5 of the report)
At the heart of America’s obesity epidemic us achieving a balance between the calories we put into our bodies and the calories we burn. It’s a simple equation but a complex challenge that companies must help their employees and consumers to overcome….
We firmly believe companies have a responsibility to provide consumers with more information and more choices so they can make better decisions… I believe the food industry can play a leading role in this area. In fact, we must play a leading role… It’s a challenge, but increasingly PepsiCo and other companies recognize and accept our responsibility to help our associates and consumers succeed.
OK, so this rhetoric is certainly nothing new and on its own reads like the usual PR-speak that we’ve come to expect from the likes of the maker of Cheetos and Mountain Dew. But let’s place these remarks into context. This report, which has been published annually for the past seven years, is put out by the organization, Trust for America’s Health (TFAH) a fairly well-known public health nonprofit based in Washington, DC. Obesity is one of TFAH’s several issue areas and they describe themselves as a “non-partisan organization dedicated to saving lives by protecting the health of every community and working to make disease prevention a national priority.” Noble enough.
This report gets a lot of press each year and is especially popular for how it ranks each state according to its obesity statistics. It also provides federal and state policy progress in a variety of areas, is fairly comprehensive, and relies heavily on government sources. In other words, the document makes a major contribution to the national conversation regarding obesity prevention and public policy.
Moreover, the report is co-published by its funder, the Robert Wood Johnson Foundation (RWJF) the nation’s largest healthcare foundation. One of RWJF’s most ambitious goals is to “reverse the childhood obesity epidemic by 2015.” Since 2007, the foundation has backed that up with an impressive $500 million in grants to myriad programs around the nation. These days, it’s hard to run into a childhood obesity prevention program that isn’t funded by RWJF.
So how did the nation’s largest healthcare funder and a prominent public health organization let the nation’s largest food company get airtime in their annual obesity report? Good question.
In the introduction to the report is this attempted explanation: “TFAH asked the following policy-makers and experts in the field of obesity to offer their perspectives on what needs to be done to address the obesity crisis in the United States.” And then PepsiCo CEO Indra Nooyi is listed among other contributors including Senator Tom Harkin and Kelly Brownell, director of Yale’s Rudd Center on Food Policy and Obesity. That’s quite a coup, for CEO Nooyi to be listed among the very same experts who are fighting PepsiCo’s lobbying efforts.
Reporter Melanie Warner, who just published an excellent piece about this at BNET, (Obesity Report Chronicles the Sad State of America — and Tells Us How Great PepsiCo Is) asked TFAH to explain itself. Here is what she learned:
Laura Segal, spokesperson for the Trust for America’s Health, says that having Nooyi’s comments in the report was an innocent attempt to have the “industry perspective” and not the result of any shady financial relationship. “We reached out to a number of companies and Pepsi was the first one to respond. We want to represent a range of opinions and the industry segment is a significant component of dealing with obesity,” says Segal.
Harold Goldstein (who gets the credit for first sounding the alarm) sees this incident as part of a troubling trend:
There seems to be a growing interest among public health organizations to appear “unbiased” when discussing obesity prevention by providing a forum for industry. It would be the equivalent of providing a forum for the tobacco industry to espouse their “personal responsibility” message in reports on smoking-related deaths.
As a national public health organization, I would have hoped TFAH would provide a clear and scientifically based public health perspective on issues like personal responsibility, rather than simply providing a forum for dissenting perspectives.
Also, the placement of the PepsiCo text is either suspect or ironic. It comes right after two pages describing recent efforts by various states to enact soda taxes, a contentious issue that PepsiCo lobbies hard against, despite mounting evidence that it may be one of the most effective policies available. Recognizing the connection, Harold Goldstein describes what Nooyi left out of her statement:
She doesn’t mention the highly sophisticated multimillion dollar national marketing and lobbying campaign they have undertaken to promote themselves as good corporate citizens and undermine efforts to establish state and local policies to reduce consumption of sugar sweetened beverages, which have been the single leading contributor to the obesity epidemic.
It’s bad enough when the government invites industry executives to “workshops” on food marketing, and for years we have seen corporate sponsorships of nonprofits such as the American Heart Association and the American Dietetic Association. But this hurts even more, because it was unexpected. If we can’t even read a major public health report on obesity data and policy solutions without running into a PR statement by Big Food, then no place is safe.
As Melanie Warner points out: “the inclusion of Nooyi’s remarks in a public health report feels a bit like if Congress were to suddenly decide to give BP several pages with which to defend itself in forthcoming congressional reports on the oil spill.”
While most of the information contained within the report may still be reliable, the fact that PepsiCo was allowed to participate also raises the question, what other editorial decisions were made that might have been favorable to the food industry? We’ll never know, and that’s the heart of the problem: Once the door is open to providing industry a forum in a public health context, no longer can we trust that we are getting the best information available from those sources.
Finally, I asked Marion Nestle for her reaction:
By this time, research has clearly demonstrated that partnerships and alliances of health organizations with food companies benefits the food companies far more than the health organizations. The goals of public health and food companies differ. Food companies enter such alliances for public relations and to deflect public attention from the need to regulate their marketing practices. RWJF ought to be well aware of the risk of such alliances and to protect its integrity against them.
What do you think? It would be great to hear from RWJF grantees. You can make comments on this blog anonymously if you prefer.
All Aboard for Ice Cream: Nestle Peddling Junk Food on Amazon River to Reach Brazil’s Slums
I have many things to do today and writing this post was not on my list. But as I was cleaning out my in-box, an especially disgusting news item caught my attention and writing about it is the only way I know to release my outrage. My version of screaming from the rooftop.
The offending article, on Bloomberg.com (Nestle to Sail Amazon Rivers to Reach Consumers) describes how the world’s largest food company will soon “begin sailing a supermarket barge down two Amazon river tributaries as it competes with Unilever to reach emerging-market customers cut off from branded goods.”
A supermarket barge? Has Big Food already run out of customers in cities and other locales that are more readily accessible by land? Cut off from branded goods? I don’t think these people are lost or have been camping out too long, they’re just living their lives. They probably don’t even realize they are missing out on Toll House, Raisinets, and Sno-Caps. But no matter, if there are people out there so backwards to still be subsisting on food found in nature, Big Food will find them, by land or by sea, and set them straight.
The boat, with more than 1,000 square feet of supermarket space, will journey to 18 cities, reaching 800,000 potential consumers in Brazil, and will even provide access for the disabled and elderly.
But how can these poor Bralizian residents even afford to purchase processed foods when they are probably struggling as it is? No worries, Nestle has that little problem all figured out too. According to the article:
Nestle sells 3,950 products in “popularly positioned” formats designed for low-income consumers. Smaller packs allow poor consumers to afford branded goods like richer shoppers rather than turn to generic alternatives. The Swiss company has a team of 7,000 saleswomen who peddle packs of Nestle goods door-to-door in Brazilian slums.
Translation: Because Nestle knows that poor people cannot afford the same super-sized packages commonly sold in the West, the company sells starter products to get poor customers hooked on their brands. The threat of “generic alternatives” looms large because, god forbid, these people figure out that juice is just juice and brand really makes no difference. The strategy of hooking poor people on smaller, cheaper goods is commonplace but was pioneered by the tobacco industry, which still sells single cigarettes in developing world. (The practice is banned in most other nations.)
And what, pray tell, will the floating supermarket carry? Surely, necessary food items for these hard-to-reach residents. Bloomberg.com notes, “The vessel will carry 300 different goods including chocolate, yogurt, ice cream and juices.” Yup, all the essentials. But wait maybe Nestle is taking care of the poor’s nutrition needs after all: “The company often adds nutrients such as iron, zinc, iodine and vitamin A to address deficiencies among the poor.” How heartwarming.
Nestle’s press release proudly announcing the vessel’s voyage adds:
The floating supermarket develops another trading channel which offers access to Nutrition, Health and Wellness to the remote communities in the north region of Brazil.
Who better to teach nutrition than the maker of Drumstick ice cream?
As I wrote about previously here, with Western nations becoming more and more saturated while regulatory pressures mount in the U.S. to curb unsavory marketing practices, Big Food has no choice but to step up the sales pace in the developing world. As the article explains:
Nestle had 2009 food and beverage sales growth in emerging markets of 8.5 percent, more than double the rate of its total business. The company has said it aims to boost the proportion of sales from developing countries to 45 percent in a decade from 35 percent now.
Just in case you missed that: Within ten years, the world’s largest food company will do almost half of its business in the developing world. That’s astounding by any measure of any industry.
And yes, Brazil is already showing signs of diet-related health problems. This article from Time magazine last year describes the concern over rising obesity rates found by Brazil’s own Health Ministry. While the numbers there are still small compared to here, as Nestle keeps reloading its ice cream barge to reach more “brand-deprived” poor people, it won’t take long before that gap narrows.
PepsiCo Teams up with White House to Whitewash Worthless Snack and Sodas – AlterNet article
Food and beverage giant PepsiCo claims to be “investing in a healthier future for people and our planet.” But how is that possible when their top-selling products include Mountain Dew and Doritos?
Check out my article on PepsiCo over at AlterNet. Please post comments there, if you’re so inclined, since editors love that.
PepsiCo’s latest “local” ad campaign for Lay’s reveals that potato chips come from… potatoes!
In case potato chips lovers had no idea where their favorite salty snacks came from, America’s largest chip maker has launched a new ad campaign clearing up the confusion once and for all.
As explained by the New York Times this week (in the advertising section, not food, and rightly so) the ads appear to stem from recent concern over the high salt content and other nutritional challenges of the likes of Lay’s. To quote columnist Stuart Elliot, the campaign “is intended to help consumers think of Lay’s as a food rather than a snack” and is “centered on farmers who grow potatoes for the maker of Lay’s, the Frito-Lay unit of PepsiCo.”
Not to miss out on the current “love your local farmer” movement, the campaign features ads of regional farmers in local markets, along with an online “Happiness Exhibit” photo gallery at lays.com.
The Times describes why the stakes are so high. Lay’s is PepsiCo’s third best-selling product, second only to the company’s Pepsi-Cola and Mountain Dew brands. Total Lay’s sales topped $2 billion last year. Yet, growth is the key to continued success, and according to the Times:
Sales growth for Lay’s had slowed to less than 1 percent from 2005 to 2007, raising concern among executives at Frito-Lay as well as PepsiCo.
Surveys revealed that Frito-Lay had a perception problem on its hands. Apparently, a third of respondents thought the ingredients were “not real potatoes.” That’s when the marketing machine sprung into action. New ads were designed to convey the “three simple ingredients” in the main variety of Lay’s, called Lay’s Classic: potatoes, “all-natural” sunflower oil and “a dash of salt.”
The addition of farmers to the ad campaign is an aim, says Gannon Jones, vice president for portfolio marketing at Frito-Lay, “to put the hometown face on it, and the hometown face is our farmers.”
How touching. Funny the company didn’t put the “hometown face” of the local factory workers who pulverize the potatoes, and then douse the mixture in salt (more than a dash) along with many gallons of (“all-natural”) oil. Or the other numerous local factory workers who must work very hard turning those “simple ingredients” into fried chips. Then there are even more local factory workers on the assembly line where all of those many chips are put into bags. Hmmm.
Oh wait, they also left out the local factory workers who put the bags into boxes, seal the boxes and get them ready to leave the factories. And who can forget all the local truckers who have to drive the big trucks to the regional distribution centers before they can be delivered by yet other local truck drivers to all those local stores. Nope, just gonna focus on the local farmers. Wonder why?
I thought this local angle sounded familiar. Indeed, when Frito-Lay first tried to go the “Local Lay’s” route last year, there was plenty of skepticism to go around. (See for example, Frito-Lay Embraces Local Movement, But Movement Does Not Embrace Frito-Lay.)
Also, I was interviewed for this article in Ad Age at the start of the campaign and called it disingenuous then. (That was an understatement.) Here’s what else I had to say about it:
Let’s be honest: It’s processed junk food. It’s just companies scrambling to save themselves as they see the trend happening as people are waking up and getting a clue that maybe packaged food isn’t good for you.
Then I got the last word in that story:
They have factories all over the country so they’re locally processed? Give me a break. That’s hilarious. You might as well say ‘I rolled this cigarette in my backyard so it’s local.’
Sorry for recycling old quotes, but if it still works, why not?
Thanks to my esteemed colleague Marion Nestle who pointed me to this story. Her clever name for it? Farmwashing!
Wondering where in the world Big Food will put 1.5 trillion calories?
Last week, 16 major packaged food companies “pledged” to Michelle Obama’s Let’s Move campaign that they would somehow remove 1.5 trillion calories from the U.S. food supply by the end of 2015. As I wrote here, there are many reasons to be skeptical about this announcement. Since my post others have chimed in with their own doubts. For example, see business writer Melanie Warner’s excellent analysis, Food Industry’s Calorie Reduction Pledge: Smart Marketing, but Dumb Nutrition.
I also had this nagging feeling that even if these food companies were to honor their promise, those calories would not just disappear, rather they would likely just turn up in other countries. Sure enough, with the ink barely dry on the calorie-reduction agreement, in came a press release from one of the most important pledgers – PepsiCo.
PepsiCo proudly announced that it’s investing $2.5 billion in China, on top of the $1 billion the company has already spent there since 2008. The soft drink and snack food giant intends to build a dozen new food and beverage plants, to add to the current 27 facilities.
According to the Wall Street Journal, this announcement, made at the Shanghai Expo, indicates stepped-up competition with Coca-Cola, who announced its own $2 billion investment in China late last year. (Both companies are major sponsors of the Expo.) WSJ explains why Coke and Pepsi are so eager to find fertile ground:
Both beverage giants are expanding aggressively in China, India and Russia, among other emerging markets, where growth is much faster than in the U.S. Soft-drink sales have declined for five years in the U.S.
“Emerging markets” is corporate-speak for developing nations. While sales slump here at home, PepsiCo is seeing double-digit growth overseas:
Its international business boosted first-quarter results, with its Asia, Middle East and Africa unit posting 13% growth in snack volume and 10% in beverage volume, largely because of growth in China and India.
Meanwhile Coca-Cola, never to be outdone by PepsiCo in the chutzpah department, quietly announced, the week prior to the Big Food White House Pledge, that they were investing $300 million in Pakistan. The plan is to build two more (adding to the current six) manufacturing plants in that country. This is another direct challenge to PepsiCo, which already has a major presence in the Middle East. (A friend who is currently teaching at Lahore University of Management Sciences tells me that students there eat in the “Pepsi Dining Center.”)
One article explains Coca-Cola’s motives: “Pakistan is a growing market. It has a population of 170 million and majority of them are youngsters,” said Rizwan U Khan, Coca-Cola’s country manager for Pakistan and Afghanistan. “We view this country has a favourable place for expansion.”
The majority are youngsters, of course, since youth is the optimum time to get more loyal customers. Funny how we didn’t hear any such honest assessment coming out of Big Food last week at the White House. They were on their best behavior there. And while PepsiCo previously endorsed the First Lady’s Let’s Move campaign, it seems Big Food only cares about childhood obesity in America. Indian kids, Pakistani kids, Chinese kids, who cares?
Of course, the cigarette industry wrote this playbook years ago. Once regulations started becoming inhospitable in the United States, Big Tobacco just stepped up their marketing efforts overseas, especially in the developing world and as a result, smoking is an international epidemic. To quote Dr. Margaret Chan, World Health Organization director-general:
If Big Tobacco is in retreat in some parts of the world, it is on the march in others. As we all know, the tobacco industry is ruthless, devious, rich and powerful.
Just replace the word tobacco with food in that quote, and you will see our future.
Big Food pledge placates White House – Who needs policy when you’ve got promises?
You’ve got to hand it to the food industry. They certainly know how to get the attention of the White House just when they need it most. As announced today by Michelle Obama herself, the nation’s leading food companies have made yet another pledge, this one in the form of an agreement signed with the Partnership for a Healthier America, an off-shoot of the First Lady’s Let’s Move campaign.
Mrs. Obama said that 16 corporations accounting for up to 25 percent of the American food supply chain would trim a total of one trillion calories by 2012 and 1.5 trillion calories by 2015. Sounds impressive, but I am not really sure exactly what it means. Trim calories, from what? OK, to be fair, here’s how the press release attempts to explain it:
Healthy Weight Commitment Foundation manufacturing companies will pursue their calorie reduction goal by developing and introducing lower-calorie options, changing recipes where possible to lower the calorie content of current products, or reducing portion sizes of existing single-serve products.
First off, who is the Healthy Weight Commitment Foundation? Good question, certainly sounds official, but a quick perusal of the website reveals a virtual who’s who of Big Food: Coca-Cola, General Mills, Kraft Foods, and of course, PepsiCo, whose CEO Indra Nooyi serves as vice chair. (Kellogg’s CEO got the top spot and was at today’s White House briefing, see leadership.)
And you gotta love this mission statement: “Our mission is to try to help reduce obesity – especially childhood obesity – by 2015.” Try to help? Reduce? Especially? Sounds pretty lame. But I digress.
The member companies are pledging to do three things: One, develop and introduce lower-calorie options. But if they are making new products, isn’t that actually adding calories to the food supply? Next, for current products, where possible they will lower calorie content. When is it not possible? Why, when Big Food says so, that’s when.
Finally, they will reduce portion sizes. Now all of the member companies are packaged food manufacturers, not restaurants, where portion sizes are out of control and where Americans spend roughly half of their food dollars. So this just means that we might get more products like the current “100-calorie packs,” which just encourages more packaging waste, at higher prices to boot.
As this is just another voluntary promise by industry, how will we even know if the companies follow through? No worries, they thought of everything. As the press release explains, under the agreement, “the Healthy Weight Commitment Foundation will report annually to the Partnership on the progress that we are making toward this pledge.” So I guess that should cover it.
What’s going on here should be obvious to anyone who has been paying close attention to food industry tactics over the past few years. It’s certainly no coincidence that this announcement comes on the heels of last week’s report from the White House Task Force on Childhood Obesity. Indeed, with less than 5 business days in between the two media events, the memory of that comprehensive report, containing 70 policy recommendations is now conveniently overshadowed by Big Food’s promise of 1.5 trillion fewer calories. That’s industry math: 1.5 trillion beats 70.
But before we toss the Task Force report into the historical dust bin, let’s see which policy recommendations might have gotten Big Food upset. First there’s # 2.6: “All media and entertainment companies should limit the licensing of their popular characters to food and beverage products that are healthy.” Uh oh, that could mean no more SpongeBob Squarepants Popsicles, that would stink.
Then there’s # 2.7: “The food and beverage industry and the media and entertainment industry should jointly adopt meaningful, uniform nutrition standards for marketing food and beverages to children, as well as a uniform standard for what constitutes marketing to children.” Meaningful? Uniform? Those are dirty words to Big Food. They prefer words like “try” and “reduce.”
Oh and they really don’t like recommendation # 2.9: “If voluntary efforts to limit the marketing of less healthy foods and beverages to children do not yield substantial results, the FCC could consider revisiting and modernizing rules on commercial time during children’s programming.” What was that, the FCC? Why, that’s an actual government agency named in the report, how did that happen?
Food companies that market to children (including pledgers Coca-Cola, Kraft Foods, and PepsiCo) are afraid that Michelle Obama’s Let’s Move campaign might result in actual policy making, otherwise known as laws and regulations, those things that government agencies make when they are doing their jobs.
Every so often, when the threat of government regulation rears its ugly head, the food industry pounces on it to beat it down, by announcing new and improved promises, pledges, commitments, initiatives, partnerships, or coalitions at just the right time, all aimed at keeping government at bay and the public convinced that they are acting responsibly.
Kelly Brownell, director of the Rudd Center on Food Policy and Obesity at Yale University called it right when he told the Wall Street Journal that this move was little more than public relations:
This is where the market is taking these companies anyway, and I don’t know that this represents much of a concession. I also believe that the motive behind this is to fight off government regulation by creating the appearance of voluntary changes by the industry.
Sadly, this time industry made sure that government came on board even before the announcement. At the press conference, Michelle Obama predicted, “In the weeks and months to come, we expect to hear more announcements regarding specific steps on reducing sugar, fat and sodium in the foods that our children eat.” Great, brace yourself for even more PR and empty promises.
If I was skeptical about the likely success of Let’s Move before, I am downright cynical now.
Post-script: For a somewhat less cynical viewpoint, see Marion Nestle’s blog post.
Big Food Goes North to Buy Out Dietitians of Canada Too
Some things in Canada just seem so much more sane than here in the states. Better (any) health care of course is the most touted reason to move north of the border.
If you’re like me and many others fed up with the American Dietetic Association’s ongoing affiliation with the likes of Coca-Cola, PepsiCo, and McDonald’s, (see previous post and comments) you might wonder if this insane hypocrisy is something unique to America. You might think that dietitians in a country humane enough to provide its citizens with decent health care would steer clear of Big Food influence over its nutrition professionals. I am sorry to report that this is not the case.
As recently described in painful detail by a Canadian dietitian blogger (Nutrition Nibbles) Sybil Hebert, the ADA equivalent trade group, Dietitians of Canada (DC) “partners with industry, including Coca-Cola, McDonald’s, Monsanto, and Nestle.” As a new member, Ms. Hebert was not happy to learn this troubling information, and inspired by Marion Nestle’s call to ADA members on the same topic, decided to make her distaste known with a letter of her own.
Her impressive missive details numerous examples of industry partnerships such as raking in over $200,000 dollars from corporate sponsorships, including the pharmaceutical industry. She concludes with this reasonable request to the organization’s leadership:
Board of Directors, as long as DC continues to align itself with food, beverage and pharmaceutical industries, and rely on these corporations for funding, it will never be respected, and neither will I. As a member of the purported “nation-wide voice of dietitians,” I hope my voice, and my concerns, are heard, and that DC will carefully review its advertising and sponsorship policies to recognize the many conflicts of interest that exist, and their consequences, and take steps to minimize them in order to restore DC’s credibility.
Well said. I’ve heard from many dietitians in the U.S. who are no longer members of the ADA for this very reason, that the organization cannot be respected as long as it is compromised.
Unfortunately, the DC leadership has not taken too kindly to Ms. Hebert’s request, and in particular to the fact that she has posted her letter on her blog. Despite (or maybe because of) the many comments in support, Ms. Hebert has received more than one email asking her to take down the post.
What is the leadership of Dietitians of Canada so afraid of? It’s certainly no secret that the organization partners with industry. It only took me a minute to find the program for DC’s upcoming annual conference in Montreal, which lists among its sponsors: General Mills, Danone, Unilever, PepsiCo, and a plethora of drug companies. In just one day you can attend the Kellogg Breakfast, followed by the Kellogg Nutrition Symposium, and then take a Kellogg break. Maybe the Dietitians of Canada should consider changing its name to Dietitians of Kellogg. Then again, maybe that would make all those other corporate sponsors too upset.
This isn’t the first time the trade group has been called out for its conflict of interest. Dr. Yoni Freedhoff is a family doctor in Ottawa who has wondered (among other conflicts) what the heck the Dietitians of Canada was doing putting out a joint press release last year with the Dairy Farmers of Canada making nutrition recommendations that essentially served as a “milk advertisement” (his words).
Professional associations such as the American Dietetic Association and Dietitians of Canada must renounce their corporate affiliations and stop taking money from the very companies that are undermining their own members’ ability to do help people eat right. Until they do so, these groups risk becoming little more than a tool of corporate interests, which is exactly what Big Food wants.
We need more dietitians like Sybil Hebert taking a public stand. Please post comments both here and on her blog in support and if you’re a member of either the American Dietetic Association or Dietitians of Canada voice your concerns directly to the leadership. If you’re no longer a member, tell them why you left. Together, our voices can make a difference.
PepsiCo Triples its Chances of Hooking Teens on Gatorade, Targets their “Emotional Relationship with Sports”
Every few years, when sales decline in a flagship brand, the parent company has to figure out how to “refresh the brand” to re-boost sales and keep investors happy. Such is the case now with PepsiCo’s Gatorade line, which has been in a sales slump for three years.
Invented in 1965 by University of Florida researchers, Gatorade is PepsiCo’s third-biggest selling global beverage brand after Pepsi-Cola and Mountain Dew. So when its sales declined 14% last year, this was cause for concern on Wall Street. Enter “G” brands, PepsiCo’s first in a series of marketing strategies aimed at reviving Gatorade sales. If you’ve been wondering what all those G ads were for, you’re not alone. But odds are, you’re also not the target audience.
Critical to maintaining brand loyalty of course is reaching young customers. According to a recent story in the Wall Street Journal called, “Gatorade Before and After: PepsiCo’s New Ad Campaign Aims to Boost Its Struggling Sports-Drink Business,” the company says the renaming effort has been a hit with teens. To create the “G Series” line, Gatorade interviewed more than 10,000 teen athletes, parents and coaches, says WSJ:
The first stage of Gatorade’s return to its athletic roots came last year with a makeover dubbing the drink “G.” The move fell flat with some consumers who said they were confused by the new packaging, but [Gatorade’s chief marketing officer] Ms. Robb O’Hagan said the “G” campaign achieved its aim of reconnecting with teenagers, who saw the drink as something “my parents drink.”
Reconnecting with teenagers, the needed demographic to replace the aging consumers from previous decades, check. Now comes stage 2 of getting the brand off life support: inventing entirely new ways to promote the products as performance enhancing for athletes, or athletic-wannabes.
Not satisfied to merely be a thirst-quenching “sports drink,” PepsiCo has created not one, not two, but three ways to drink Gatorade, called the “G Series.” (No doubt, the “science” behind this new 3-pronged approach was cooked up at the PepsiCo-funded Gatorade Sports Science Institute, and yes, that’s a real place.) Now kids can mimic their favorite basketball star before, during, and after the game. The three products—Prime, Perform and Recover—together will cost about $7, which is more than triple the price of one plain old 20-oz. Gatorade bottle. How brilliant is that, triple your sales while tripling the empty-calorie consumption, cha-ching!
But of course the costs may be much higher from the resulting health care stemming from the adverse health effects of promoting needless beverages to teens. As the WSJ notes, “teens are Gatorade’s main target.” And Gatorade’s O’Hagan minced no words when she described the teen years:
It’s the most critical time in their emotional relationship with sport. Without a doubt, that’s when consumers enter the Gatorade franchise.
Emotional relationships, entering the franchise, does this sound like corporate responsibility to you? This is the same company that touted itself as being on board with Michelle Obama’s Let’s Move campaign to end childhood obesity. I guess Ms O’Hagan didn’t get that memo.
The need to save a struggling brand by targeting teens could certainly explain why PepsiCo’s recent announcement of a “global policy” on school beverages was suspiciously silent on Gatorade. When I tried to ask PepsiCo management about this disconnect, I was told the products were for “athletes” but no specifics were given on how to keep Gatorade out of the hands of non-athletic students, which, let’s be honest, describes the overwhelming majority of sedentary kids these days.
In my research for Appetite for Profit, every nutritionist and health professional I spoke to agreed that the average teen certainly has no need for “sports drinks,” at least not until we start suffering from a national de-hydration epidemic, which seems unlikely. Meantime, teens, who are already heavily targeted with PepsiCo’s Pepsi-Cola and Mountain Dew brands, will now be bombarded with even more messages to drink highly-caloric, nutritionally-deficient beverages. As a result, we can expect even higher risks of obesity and related health problems that go along with over-consumption.
And with reports of PepsiCo spending $30 million to revive the Gatorade brand, the marketing effort is likely to succeed. Despite the company’s claims of corporate responsibility, all that really matters to PepsiCo is the bottom line, and Gatorade is already showing positive signs of a comeback. Again, from the WSJ article:
“Gatorade is still down but it’s not down as much as it has been previously,” Chief Financial Officer Hugh Johnston said in an interview. “I really do feel good about the fact that we’re getting the Gatorade business back on track.”
At least someone feels good. I am feeling a little ill myself.
Kick-Ass Shameless Product Placement – Eat, Drink, Shoot, and Drive (repeat)
In a previous post I called out Iron Man 2 for its over-the-top product placement and co-branding deals with the likes of Burger King and Dr. Pepper, but now it seems another movie deserves top honors as shameless promoters of all things bad for you. As described by Brandchannel, the new superhero parody, Kick-Ass (I am sorry to have to even type that awful title) hawks no fewer than 40 brands. Here’s how some of the products break down into what’s bad for you, bad for the planet, and/or can maim you or others. PepsiCo scores the highest for most brands under one corporate umbrella (5).
Beverages – 8: Amp Energy Drink, Aquafina, Budweiser, Clover Milk (arguable), Hi-C, Mountain Dew, Sierra Mist, Welch’s
Junk food – 7: Count Chocula, Dunkin’ Donuts, Honey Puffs, Hungry Man, Land-O-Lakes, SunChips, Twizzlers
Cars – 6: Chrysler PT Cruiser, Ford, Ford Mustang, GMC, Range Rover, Rolls Royce
Guns – 4: Beretta, Glock, Heckler & Koch, Steyr (I had to look these up)
Sexually-exploitative dolls: Bratz! (OK, I made a special category for this, but they are awful.)
I suppose that unlike with Iron Man 2, these movie producers could argue that there is no disconnect with superheroes eating and drinking and shooting and driving themselves into oblivion in a parody, but I still say given how popular this movie will be with young people, it’s inexcusable. Yes, the film is rated R, but we all know how teenagers flock to R movies to feel grown up. But if these teens use many of the products promoted in the film, they may not get to.
What do you think?
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