• Food Industry Fears Fat Is the Next Tobacco
  • May 17, 2007 | Authors: Jeffrey S. Edelstein; Linda A. Goldstein
  • Law Firm: Manatt, Phelps & Phillips, LLP - New York Office
  • “Our Achilles heel is the discussion about obesity,” Coca-Cola Company Chief Creative Officer Esther Lee told attendees at the Venice Festival of Media earlier this month. “It’s gone from a small, manageable U.S. issue to a huge global issue. It dilutes our marketing and works against it. It’s a huge, huge issue.”

    Lee voices the concerns of many in the food industry about a global push to combat obesity. In the latest salvo, the Federal Trade Commission announced it would seek marketing-related information from 44 food, beverage, and quick-service restaurant chains this summer. The goal is to get a “more complete picture” of their kid-marketing practices, especially in the relatively unexplored areas of in-store promotions, events, packaging, Internet marketing, and product placement in video games, movies, and TV programs.

    Going after companies individually puts pressure on marketers that have already been feeling plenty. Though the food industry has worked to sharply curtail advertising targeted at young children and to dedicate at least half of advertising to older kids toward more healthful offerings, consumer advocates and lawmakers are not satisfied with the industry’s self-regulatory effort. Association of National Advertisers Exec VP-Government Relations Dan Jaffe noted that despite “already enormous and well-developed” changes to marketing and new-product portfolios, “still people are saying more, more, more.”

    Jaffe said that the new FTC demand will not spur marketers to significantly change kid-food marketing practices, since they have “already stepped forward and spent multiple billions of dollars to create healthier options, advertise them heavily,” and have pledged to do even more as part of the Children’s Food & Beverage Advertising Initiative.

    But Tim Stock, managing director at ScenarioDNA, said the FTC demand is “a wake-up call that time is running out.” Marketers are “all worried at some level. They know something has to change. And it’s not about advertising. It’s about going back to the product drawing board and creating a sustainable brand.”

    The problem is that healthier brands are not necessarily what consumers are looking for. “In marketing, usually, you follow what consumers want and figure out how to give it to them, but in this instance, people aren’t looking for these healthier products and the ones who are probably are not the ones whose children are overweight,” said a top executive of a marketing agency.

    The industry also lays blame with the government. Jaffe pointed out that the Center for Disease Control’s nutrition and physical-activity programs are in place in only 22 of the 50 states. “This is a multifaceted issue,” he said. “Advertising alone cannot be implicated.”

    Significance: The food industry is right to be concerned about the FTC’s planned requests for information. The probe is extremely broad, looking at all media and marketing activities to kids under 18. The FTC’s move signals that neither it nor Congress is satisfied with the industry’s self-regulatory steps, and in fact, may never be satisfied as long as the regulation is self-imposed. The issue is also not limited to the United States: the U.K. recently banned virtually all food advertising aimed at kids under 16.