Challenging times for soft drinks companies
The role that soft drinks consumption is playing in the worrying trend of rising childhood obesity has given soft drinks companies a corporate social responsibility challenge every bit as daunting as that facing the alcohol sector. Ben Cooper looks at the debate and how the industry is reacting.
"It's the couch not the can" may be the mantra of the soft drinks industry when it comes to ascribing blame for rising childhood obesity but it is clear that consumption of sweetened soft drinks is a factor, and moreover it is a cause which public health advocates will not allow to be ignored.
Public health groups, such as the World Health Organization (WHO) and the International Association for the Study of Obesity (IASO), conclude that numerous environmental factors are responsible and call for comprehensive and broad-based programmes. Thankfully for the industry, many such groups wish to engage with all stakeholders, including food and drink producers, in tackling the problem.
A report by the IASO's International Obesity Taskforce (IOTF) called for the WHO to assist countries in the development of National Obesity Action Plans. A raft of recommended measures would include providing clear and consistent consumer information on food and drink and encouraging food companies to provide lower energy, more nutritious products for children, as well as interventions to improve levels of physical activity among children.
Other groups, however, have called for a ban on the advertising of all "unhealthy foodstuffs" including inappropriate sponsorship, which would certainly impact on the commercial activities of soft drinks producers, as would further restrictions of soft drinks vending machines in schools, a particularly contentious issue in the US. Sales of soft drinks in US schools are estimated to total around US$700m a year. A number of states have already enacted legislation to impose limitations in this area and more are under pressure to follow suit.
In the EU, the European Commissioner for health and consumer affairs, Markos Kyprianou, effectively intimated that if more industry-led initiatives aimed at reducing childhood obesity were not seen in the next year, the EC would consider further legislation.
That is the shadow under which the soft drinks industry is currently operating. But as in the alcohol harm debate, legislators will look first at what the industry is doing to police itself before deciding whether further regulation and control are necessary.
While the soft drinks industry has tended to focus on the question of physical activity as a prime cause of rising childhood obesity, this only represents one line of defence for soft drinks manufacturers. In addition to advocating healthier lifestyles for children, companies have made some subtle changes to their marketing practices in the children's drinks sector. Soft drinks companies are also continuing their investment in the development of low-carb and low-calorie offerings, functional beverages and waters, which are ironically enjoying unprecedented growth, albeit primarily with adult-targeted products.
The prominence of the major producers' brands has put them squarely in the firing-line, and it has become beholden to them to project a socially responsible image which will reflect on their brands and the industry as a whole. Underlining the seriousness of the problem is the huge amount of public relations and corporate social responsibility (CSR) activity undertaken by the majors in this area.
Among the initiatives is PepsiCo's Smart Spot scheme, whereby a symbol is added to the label on some 100 of the company's food and drinks products which can contribute to a healthier diet. The company is committed to ensuring that at least half of its new US products qualify for the Smart Spot symbol. Also in February this year, PepsiCo announced that it would no longer target advertising for its flagship brand to under-12s.
Coca-Cola states on its website that it has had a policy for 50 years not to advertise carbonated soft drinks during TV programmes targeted at under-12s but as yet the company has not introduced any special labelling scheme for healthier drinks. Coca-Cola's PR in this area places the emphasis on the problems of a lack of physical activity among children and it sponsors a wide range of programmes across a range of markets aimed at encouraging children to adopt a more healthy lifestyle.
With regard to selling soft drinks in schools, Coca-Cola, PepsiCo and Cadbury-Schweppes all publish extensive guidelines on the sale of their products in schools on their websites. But in spite of these guidelines the debate surrounding the sale of CSDs in schools continues to intensify and is only going to become a tougher issue for soft drinks companies in the future.
Many within and without the industry feel that in this context more self-regulation at an industry-wide level is called for. The American Beverage Association, formerly the American Soft Drinks Association, is considering adopting a voluntary code among its members which would ban CSDs in elementary schools and limit their sale in high schools, while last year, the Canadian producers' association, Refreshments Canada, instituted a voluntary ban on the sale of CSDs in elementary and middle schools. Coca-Cola and PepsiCo both appear to be open to the idea of an industry-wide initiative on vending machines in schools in the US.
The creation of social aspects organisations and the drafting of self-regulatory codes has been key to the alcohol sector limiting the level of regulatory intervention. Until now, groups such as the ABA functioned primarily as advocacy organisations but now might be the time for such groups to develop self-regulatory functions too. The recent move by the US food manufacturers' association, the Grocery Manufacturers Association (GMA), to introduce tighter voluntary restrictions on advertising targeted at children could be an example for the soft drinks industry to follow. Moreover, with institutions like the European Commission waiting to see the food and soft drinks industry take a lead, more industry-wide self-regulation may be the only way to avert the imposition of legislation.
The childhood obesity debate and the soft drinks industry's role in addressing the problem are discussed in just-drinks.com's latest management briefing, written by Ben Cooper. For further information, go to: /membersclub/
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