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Message to food companies: Food activists are your new brand managers

August 19, 2016
Consumer Packaged Goods

Food industry marketers no longer have the sole power to shape consumer tastes and fuel demand for their products.

That power has been largely hijacked by new influencers—public health activists, celebrity nutritionists, politicians, food bloggers—who have their own agendas and can influence public sentiment as never before. Their megaphone is sympathetic media, especially online: social media, consumer websites, and an exploding number of alternative news outlets. Only the food companies that recognize this shift have a hope of maintaining or regaining consumer trust and loyalty.

Signs that food companies have lost control over their brand images and reputations are everywhere. You can see them in the national, well-organized campaigns for new restrictions: taxes on large-sized sugary drinks; forced labeling of products containing GMOs; calls for restrictions on candy at the checkout aisle. They can be seen in excoriating films like Fed Up and in polemics like Michael Moss’s book Salt, Sugar, Fat that paint the food industry as indifferent to consumer health and focused only on profit. They manifest through well-organized consumer activist organizations like the Center for Science in the Public Interest, which are not afraid to target big-name brands, from Coke to Oreos to the Trix rabbit. They are on display in well-publicized consumer lawsuits targeting companies like Nestle and Costco, both of which were accused last year of using slave labor to harvest seafood for their products.

Yet many food companies haven’t recognized the damage that such consumer activism can wreak on their brands. They remain stuck in the halcyon days when food marketers enjoyed an uninterrupted pipeline to consumers and advertising was the primary vehicle for shaping demand. The model marketer was Procter & Gamble, the world’s largest advertiser. It created the first modern brand management system, a key piece of which was pitching its detergent brands to women in the 1930s via the first soap operas on radio and television.

The science of marketing was “agnostic,” free from value judgments about whether products were deemed healthy or not. Today, many companies and restaurant chains remain fixated on the traditional marketing model of delivering the optimum combination of taste, convenience, and value, regardless of impact on consumers’ health or environmental sustainability.

But this old paradigm is on life support. Outside influencers, both well-meaning experts and articulate novices, are scrambling corporate communications and often spreading their own uninformed interpretations about food ingredients, working conditions, fair trade, and other concerns. Using social media to amplify and spread those messages quickly, activists, lawmakers, and others have captured the public’s attention, even when the charges are reckless. Hamburger chain Wendy’s found this out last year when it was accused unfairly of using horse meat in its chili.

As a result, consumers no longer trust the messages that big food companies send, or even whether those companies serve their best interests. According to the Natural Marketing Institute, an overwhelming 72% of Americans believe that most food and beverage manufacturers are focused on profit rather than on health.

Today’s consumers, especially millennials and those looking for transparency, are also viewing many food companies through a “social justice” prism. So the old marketing maxim of giving customers what they want is now seen differently, as exploiting poor and unhealthy people looking for cheap calories. Indeed, that traditional bulwark “value customers,” who are the biggest market for many products viewed as less healthy, are also the most susceptible to health problems. Research from NMI shows that those consumers, who make up 40% of Americans, record the highest obesity rates, lowest incomes, least education, and highest unemployment rates. The result: Companies selling such products to consumers have placed themselves in the middle of activists’ targets.

What should food and beverage companies do to regain a grip on their product image and increase the loyalty of their valued customers? I recommend three courses of action:

  • Get intimate with your industry’s detractors. Not literally, of course. But food companies need to break bread with their attackers. Commercial business operators and marketers mostly stay detached from the nonprofit advocates, activist bloggers, and regulatory communities that assault their businesses. But those groups represent the new determinants of business and brand success, and companies are often blindsided by attacks on their sacred brands and practices. They presume that their bond with the consumer is inseparable and that third parties cannot interfere with that relationship. Wrong! Corporate headquarters strategists and marketers need to upend their insulation from the world of activists and attackers. They need to better gauge the prevailing temperament and its potential impact on brand image and sales. As a wakeup call, new marketing and sales personnel should spend at least three to six months in Washington, as part of their training to understand how regulators, public health advocates, and other influencers are shaping (and limiting) their brands’ futures. At minimum, these marketers will better understand their barriers to success, how to address the emerging concerns about their firms’ products, and where their next best business opportunities may lie.
  • Use corporate social responsibility to unleash growth. For too long, CSR has been either ignored or treated as a second-class citizen in operating and marketing plans. Today food companies must see that CSR has become the driving element for a successful brand. They need to revamp their compensation systems accordingly. For example, General Mills and Danone have adopted bonus structures that use CSR measures to fuel growth. Focusing only on financial metrics such as market share, revenue, and profit regardless of societal impact is now a losing strategy. Being agnostic about whether their products are healthy only guarantees that food companies will become a target for activists.
  • Don’t ignore the fifth “P” of marketing. Optimizing the four “P’s”—product, price, promotion, and place—has been the traditional hallmark of good marketing planning. Today’s brand leaders must adopt the fifth “P,” protection. That is, every action a brand takes must ensure that any and all vulnerable populations are protected. This means that food companies must make children, low-income populations, health-compromised consumers, and any other vulnerable groups off limits for products and practices deemed less healthy. To put it another way, food companies’ exposure multiplies when Double Gulps and large-sized French fries are promoted to kids under 12, or when sweet goods like Twinkies and Little Debbie snacks are prominently displayed throughout stores in low-income neighborhoods.

A number of companies are already recognizing the need for transparency, engaging with former detractors, and reaping public admiration for doing so. For example, Perdue Farms recently announced that it is changing how it raises chickens. It has added perches and windows, increased space for chickens to roam, switched to breeds that grow more slowly and comfortably, and started putting chickens to sleep before slaughtering them, to minimize their trauma. The poultry producer called in some of its biggest critics—Compassion in World Farming and the Humane Society of the U.S., which once challenged Perdue’s claim of “humanely raised” chickens and won a settlement—to come up with the new methods. This is simply a smart business move for Perdue, since a growing number of consumers say they are more likely to support companies that treat animals well.

The beer industry, which set a precedent three decades ago in working with Mothers Against Drunk Driving to rein in rampant beer-guzzling, is another example. Major breweries have recently pledged to list calorie counts and other nutrition facts on their labels. The move has won them praise from the Center for Science in the Public Interest. In a July 12 announcement about the initiative, the Beer Institute cited “quality and transparency” as the reasons for it. The organization also notes that 72% of beer drinkers want the information, which shows that labeling is a sound business move as well.

In Europe, Mars Food is publishing information on its website urging that its products that are higher in salt, sugar and/or fat be used for “occasional consumption” only, following nutrition guidelines from the World Health Organization. Stateside, the company has capped the calories in any single-serve candy bar at 250 and recently launched 100-calorie candy bars in CVS drugstores and other retail outlets.

For food and beverage companies, capturing consumers’ hearts, minds, and spending is only going to get more challenging, especially since a cacophony of unmuted voices is now interrupting their message. But by listening to those other voices and factoring them into decisions about products and marketing practices, food companies can regain some influence on how consumers perceive their products. Only then will they be able to preserve their brand reputations.

This article is by Hank Cardello, a senior fellow at the Hudson Institute and author of Stuffed: An Insider’s Look at Who’s (Really) Making America Fat.

Source: Forbes

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