Two weeks ago at an investor conference in Yankee stadium, superstar PepsiCo CEO Indra Nooyi, proclaimed that her multibillion dollar company needs to be part of the solution to "one of the world's biggest public-health challenges, a challenge fundamentally linked to our industry: obesity."
PepsiCo, along with other food giants such as Kraft Foods, Inc., ConAgra Foods, Inc. and Campbell Soup Co. have recently set their sites on reducing the amount of fat, salt and sugar they put into their -- let's face it -- mostly processed foods.
What's going on here? Nearly a decade ago, getting these food behemoths to take even a fraction of a teeny weeny baby step toward healthier fare was supposedly a very tough task. Yet, today, we're seeing a new wave of movement both in the government and business spheres toward "healthy living policies."
The impetus most likely lies in a confluence of factors. A soda tax to pay for healthcare was introduced (although ultimately shot down) in the Senate last year and is currently being mulled over by several state governments. Full-calorie sodas are being pulled from schools by a consortium of beverage companies (see the video below). And the epidemic of overweight and obesity is frankly just about everywhere in the media these days (check out Jamie Oliver's new show on ABC). Perhaps Michelle Obama's recent address to the Grocery Manufacturers Association has also pushed some buttons. She asked the companies to "step it up" and made some pretty sharp demands: "We need you not to just tweak around the edges but entirely rethink the products you are offering."
Or, better yet, maybe the food companies are finally listening to us. CEO's like Nooyi realize that consumer preferences are "shifting" to healthier choices so her company needs to change to meet these new demands.
Whatever the reasons, change is happening. Nooyi announced that by 2015, PepsiCo wants to reduce the amount of sugar and salt in many of its brands (which include Gatorade, Tropicana and Quaker) by 25 percent and saturated fat by 15 percent. It also wants to remove all of its sugary drinks from schools by 2012. They're also planning to do away with high fructose corn syrup in its Gatorade brand (if you've looked at their ingredient list in the past, you'll have seen it) and change to stevia for sweetness.
So here's the million-dollar question: Are these changes enough? And are they getting to the root of our health problems or just superficially fixing them with band-aids?
Ms. Nooyi would not be doing her job if she thought a shift towards healthy, "good for you" products wouldn't reel in benefits to her bottom line and shareholders either in the short or long term:
There are huge opportunities in meeting consumer needs in nutritious beverages and snacks...with Tropicana and Quaker we own two of the top five good-for-you food and beverage brands in the world...with this unbelievable platform, our stepped up R&D capabilities and $10 billion core good-for-you revenue base, I feel we have a great platform to expand nutrition business from and I feel very good about our prospects here.
But the more important take-away here is that from her statements, it's obvious that PepsiCo has its ear fused to the ground when it comes to the American consumer. In other words, the company is striving to please us when it comes to our demands for healthier food. Regardless of its true motive (whether for profit, to appease lawmakers, or be more socially responsible, etc.), PepsiCo is listening. And this of course is a testament to the power of our democracy and our combined voices as consumers. We vote each time we make a purchase and our votes are tallied and assessed by corporate America each and every day.
A second positive aspect to all of this is the fact that Nooyi's wants her company to be a "model" in the modern business world, making defining, virtuous change in the 21st century - goals of a true visionary. Isn't it true we'd be better off if global behemoths like PepsiCo continued the focus on healthy food? PepsiCo's moves would undoubtedly trickle down the industry chain and it's values would be implemented by big and small food companies alike. This is good news for us.
Now for some downsides, let's not forget that PepsiCo's "good" brands still have to sit along side what many may dictate are "bad" brands. Although it sells rolled oats, the company also cranks out millions of bags of Fritos and a plethora of other sweet and salty snack foods. Furthermore, many may look to its current healthiness targets as paltry to say the least. What's a 25 percent reduction in sweetener when the original amount was through the roof in the first place? And these criticisms don't even go near the argument surrounding ingredients, freshness and natural foods. I'm pretty sure Michael Pollan would probably not classify a large amount of PepsiCo's products as "real food." Moreover, many would argue that companies like PepsiCo shouldn't be praised as they are simply unraveling the mess that they got all of into in the first place. To be fair, several decades back, it would have been seen as outlandish to be offering sodas to school children let alone flavored chips and other salty sundries jam-packed into vending machines, all of which are implicated in our massive obesity epidemic.
The Weigh In...
Although arguments can slice both ways, I have to admit I'm thrilled to see these changes in food companies like PepsiCo happening, regardless of magnitude and specifics. The only way we can win is to win together -- consumer and business. With the miles of shelf space multi-national giants like PepsiCo command, its imperative we stay aware of their actions and take note. It matters. Whether you purchase their products or not, and regardless of your personal view on special interest groups, lobbyists and the politics of Washington, its important to consider what they are doing. Because at the end of the day, business is truly at the heart of how our country runs and succeeds and the more healthy living becomes imbued in their product offerings, the better off we'll be as a whole.
Nooyi knows that the Customer is King and the healthy vision is out there. So now it's up to us as consumers to keep elevating our combined voices and demand more healthy, fresh, natural products.
What's your opinion? Is Nooyi a saint or a sinner? Are food companies on the right path? Can business help us get healthier faster? Leave your comments below!
To your good health & well-being,