Posts Tagged ‘PepsiCo’

PepsiCo’s latest “local” ad campaign for Lay’s reveals that potato chips come from… potatoes!

Posted on Friday, May 28th, 2010 by Michele Simon

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!

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Wondering where in the world Big Food will put 1.5 trillion calories?

Posted on Monday, May 24th, 2010 by Michele Simon

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.

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PepsiCo Triples its Chances of Hooking Teens on Gatorade, Targets their “Emotional Relationship with Sports”

Posted on Sunday, April 25th, 2010 by Michele Simon

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.

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Kick-Ass Shameless Product Placement – Eat, Drink, Shoot, and Drive (repeat)

Posted on Thursday, April 22nd, 2010 by Michele Simon

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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Lame response from Yale PR office re: PepsiCo / medical school deal

Posted on Tuesday, April 6th, 2010 by Michele Simon

Here is what I received from Yale after I signed the petition at Change.org to ask the Yale School of Medicine to end its deal with PepsiCo, which I wrote about here and here.

Thank you for your recent e-mail regarding the Yale School of Medicine. Dean Alpern has asked the Office of Public Affairs to respond, since you refer to a recent news release which we issued.

The Yale MD/PhD Program is funded by many different public, corporate and private sources. However none of the donors can influence the content – or compromise the quality – of the program, which is considered one of the most rigorous in the country. For almost 200 years, the Yale School of Medicine has maintained the highest standards of academic and research integrity. The nutritional research conducted by Yale clinical scientists addresses important diseases including metabolic syndrome, diabetes and obesity.

Only through the generosity of our many donors can Yale School of Medicine continue to push the frontiers of clinical research and translational medicine.

Sincerely,

—
Charles Robin Hogen Œ70)
Deputy Director of Public Affairs
Yale University
O:203-432-5423
C:203-856-8115
robin.hogen@yale.edu

So let’s write directly to Robin and explain that why this won’t cut it.

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Yale / PepsiCo Deal Making for Bad PR in Wall Street Journal and Yale Daily News

Posted on Friday, April 2nd, 2010 by Michele Simon

A few weeks ago I wrote about how the soda and snack-food giant PepsiCo had bought a piece of the Yale School of Medicine (my alma mater – MPH, 1990) by funding a “lab” and a fellowship program. Earlier this week, the Yale Daily News reported, “Critics fizz over Pepsi Gift.” In that article, we learn part of the price tag for the sell-out:

These activists have criticized the soft-drink giant’s decision in December to sponsor a graduate fellowship in the school’s M.D.-Ph.D. program, worth $250,000 over five years, for students who want to perform research on nutrition and obesity-related diseases.

Really, only $50K a year? That’s a pretty cheap price for a company that netted $1.7 billion in one quarter of 2009. If Yale is going to sell its good name, maybe they could negotiate a better deal than that.

But the price to pay may be higher in bad public relations. It’s one thing for the school newspaper to raise questions, but today, the Wall Street Journal, the nation’s most respected business voice took notice. In an opinion piece entitled, “Boola Moolah! Food Fight at Yale,” Eric Felten writes:

PepsiCo is finding out just how hard it is to appease the nutritionistas. Two weeks ago the company was getting kudos in the New Haven Register for setting up a healthy-eating research lab at Yale’s commercial Science Park; for putting a quarter of a million dollars into a doctoral-student fellowship in obesity studies at the Yale School of Medicine; and for agreeing to limit the calories in drinks it sells in schools. “World gets Healthier (Pepsi) Generation” raved the Register’s headline. By this week the cola and snack conglomerate found itself getting smacked for the same good deeds. “Critics fizz over Pepsi gift” was the headline in Monday’s Yale Daily News, reporting that activists are accusing the university of selling out for a few soda-stained dollars. Michele Simon, a Yale School of Public Health grad, was perfectly aghast that her alma mater would have anything to do with such merchants of death: “They own Cheetos, for God’s sake.”

Yale’s School of Medicine dean replied soothingly that the arrangement is “perfectly ethical”—and there’s no reason to doubt that. We aren’t likely to see journal articles flowing from Pepsi Scholars documenting the salubrious properties of high-fructose corn syrup. 

The WSJ then hits the nail on the head: 

Still, Yale isn’t quite as innocent here as the administration makes out. The Yale Bowl could be renamed PepsiCo Stadium and there would be no suggestion that the arrangement was anything but a mercenary one—a straightforward advertising deal. But the corporate naming game has different implications when it invades the tweedier precincts of campus. When a business gets its name worked into the academic fabric of a school, it is buying something more than a place to slap a corporate insignia. There is the implication that the firm is a partner in the intellectual enterprise.

What both papers fail to mention is that the Rudd Center for Food Policy and Obesity, frequently critical of Big Food, is housed at Yale, so it’s hard to view PepsiCo’s motives as pure. With this latest bad press, maybe the powers that be at both Yale HQ and the medical school will see how stupid this move was. It hardly seems worthy of one fellowship.

Also see how the Yale Daily Journal story got spun on the MSNBC web site in an article somewhat mis-titled, “Yale Takes Heat for Pepsi-Funded Obesity Study.”

Please share these articles with others to help keep the pressure on Yale to end this ill-conceived deal. Also, email medical school Dean Robert J. Alpern and/or sign the petition at Change.org. Thank you!

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PepsiCo opens “research” center at Yale Medicine – I may return my degree

Posted on Monday, March 8th, 2010 by Michele Simon

This is really embarrassing. I attended the Yale School of Public Health back when it was still a separate department within the Yale School of Medicine. I just received my alumni newsletter, only to find out that Yale Medicine has teamed up with soft drink and snack food giant PepsiCo to create a “research laboratory” in Science Park, which is adjacent to Yale’s campus.

What will sort of alleged science will this Orwellian place produce? Why, the “development of healthier food and beverage products,” what else? But that’s not all. It seems that Yale’s price tag was a tad higher. To complete the sell-out, PepsciCo is also sponsoring a fellowship in Yale’s M.D.-Ph.D. Program. According to the company’s press release, “the endowment will specifically fund work that focuses on nutritional research, such as metabolic syndrome, diabetes and obesity.” Just great. Here’s how Dr. Robert Alpern, Dean and Ensign Professor at Yale School of Medicine justifies the deal:

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. Extending this partnership to the M.D.-Ph.D. Program represents a visionary investment in one of the finest researcher training programs in the world and thus to the future of science.

Sickening. And ironic since Yale is also the home of the Rudd Center for Food Policy and Obesity, which is fast becoming the nation’s leader in the field. I can’t help wondering if this is a coincidence, of if PepsiCo figured this was a good way to neutralize the Rudd Center’s increasing influence over policies detrimental to the company’s bottom line. Let’s take, for starters, how Rudd is gaining national expertise on soda taxes, as evidenced by numerous articles penned by Rudd director Kelly Brownell such as this one published last year in the New England Journal of Medicine.

Also making me suspicious is another Yale / PepsiCo connection. When the Rudd Center was first formed, Derek Yach, formerly with the World Health Organization and tobacco control hero, was on staff there. Then in 2007, to the great shock and dismay of public health advocates around the world, he became PepsiCo’s Director of Global Health Policy, whatever that means.

And now here he is (second from left, standing), posing with numerous other smiling PepsiCo executives, side by side with Yale School of Medicine faculty members. It’s almost like he has returned to buy out his previous company.

Now I understand that everyone is hurting for money these days. The dean whines here about the university’s projected 25 percent drop in its endowment for 2009. But really, I don’t think that can possibly justify this arrangement. It’s not like the alternative was laying off faculty. The alternative was not affiliating with the purveyor of Cheetos and Mountain Dew.

Even though I always say I never learned a damn thing about nutrition at Yale Public Health, at least I could say I went to Yale. But now I am not sure I want to anymore. After writing my book, I admit to being pretty jaded and not easily shocked by industry influence, but this one really hurts. Who can I even complain to? Is nothing off limits to corporate control?

Posted in Big Food, Public Health | Tagged: , | Michele on Google+ | View/Add Comments (5) |

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