Infographic: the Wall Street Journal
Yesterday’s post on the extent of obesity in the US led to an outpouring of comments an tweets by many of you. No doubt we were all bamboozled by the stats. We’re pretty sure that managers and executives at junk food companies are aware of the numbers. And although they can’t publicly admit that they are contributing to obesity, some may actually want to produce and sell better, healthier food to the public.
Such are the soft drink behemoths, Coca Cola and Pepsi. Their core products – sugary drinks – account for most of their revenue.Trying to redesign a company that’s raking in billions from selling sugar water is far from easy though:
Hailed as a strategic visionary since taking PepsiCo’s reins nearly five years ago, Mrs. Nooyi is facing doubts from investors and industry insiders concerned that her push into healthier brands have distracted the company from some core products. Emphasizing fruit juice, oatmeal and Gatorade, she has set an ambitious goal of more than doubling revenue of nutritious products to $30 billion by 2020 while cultivating a corporate image tuned in to health and global social responsibility. Read more from WSJ…
Not that Gatorade is a healthy product, but Ms Nooyi has definitely been minded to the fact her company sells slow release poison to the masses. She was given a chance to re-invent PepsiCo through new and “healthier” products. But as you can see, the analysts on Wall-Street, as well as the large institutional investors, couldn’t care less about health. They want to see a bottom line of revenue and profit that grows from quarter to quarter. If 100% of the US will be obese in a decade in order to achieve this, so be it.
So while cola consumption is declining in the US, it still accounts for 25% of sales of ready to drink beverages. In marketing, Coke and Pepsi are considered “milking cows”, established brands that make billions for their owners. Not so simple to give up the easy money. Especially when the “rising stars” (another marketing term for promising product lines) are not delivering on their potential.
Pepsi seems to have given up on finding healthy things to sell. After dropping points to rivals, it is increasing spending on its Cola. This after 6 years of steady decline in cola advertising. Bad news.
What can be done?
Although many people are against soda tax, there is one thing nobody can argue about – junk food companies are externalizing many of the costs associated with their products. If there was a realistic way to incorporate these costs into the price of junk foods and beverages, perhaps they wouldn’t be so abundant and popular.
Got additional ideas besides “personal responsibility”?