The end of Big Food

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The association is now pivoting to focus on representing companies that produce consumer packaged goods — a broad sector that extends well beyond food to personal care products like shaving cream and even over-the-counter drugs.

The rebrand signals the emergence of a new landscape for foodmakers, one in which there is no central, unified lobbying group representing the sector inside the Beltway. The splintering of the food industry’s primary battleship was driven by changes within the industry itself: Food companies are now highly fractured in D.C., consensus on pressing policy issues is nearly impossible to achieve, and things are likely to stay that way, according to interviews with more than a dozen industry leaders.

Every single major food company is struggling, in one way or another, to find solid footing in a marketplace where consumers are increasingly asking questions about what they’re eating.

Consumers have upended the sector in recent years by demanding more transparency, simpler ingredients and brands that align with their values. The intense pace of change has left major food companies unable to agree on all sorts of issues, from mandatory labeling of genetically modified ingredients to whether the federal government should nudge foodmakers to reduce salt in their products.

“This is the new norm,” a food industry executive, granted anonymity to speak candidly about the sector, told POLITICO. “It’s not just the fact that there was a lack of consensus within GMA, or that they made mistakes; it’s the state of the industry. Food in general is just changing.”

“We’re all in the crossfire, just trying to figure out what it means,” the executive said.

As consumer preferences change rapidly, even some specialized food industry groups have struggled to unify on major policy issues. Earlier this week, Dean Foods, the largest dairy company in the U.S., announced it’s leaving the International Dairy Foods Association, the lobby representing dairy processors, because the group hasn’t fought back against plant-based products being marketed with traditional dairy terms like “milk” or “butter” on their labels.

Dean Foods, which is suffering from slumping sales, was among the exodus of companies from GMA two years ago. Today, GMA is half the size it once was, in terms of revenue — an almost unheard of level of decline for a major trade association — and none of the companies that quit the group have rejoined, even after a complete leadership shake-up last year.

GMA has spent much of the past year quietly trying to remake itself. It has pulled back from past stances on salt and sugar consumption that had led critics to brand the association as anti-consumer, and is no longer trying to forge a consensus on other controversial nutrition topics.

The federal government, for example, is in the process of updating its Dietary Guidelines for 2020, and GMA has not submitted a comment as part of the process — a level of engagement that was routine in the past.

The group’s new strategy is to seize on more unifying, less controversial issues like supply chain logistics, sustainable packaging and recycling.

Reunification of the food industry appears increasingly inconceivable. In the wake of GMA’s downfall, several major food companies have shifted how they approach federal policy issues, relying more on sector-specific associations such as the American Beverage Association, National Confectioners Association, and the American Frozen Food Institute. Companies are also turning to more informal alliances and coalitions, which have proven to be easier to navigate than trying to forge industry-wide consensus.

A number of companies that left GMA, including Kraft and Cargill, have since formed an informal group of expats, meeting quarterly to talk shop — a convening that doesn’t require hefty membership dues.

A year ago, Nestlé, Unlilever, Mars, and Danone North America — all companies that parted ways with GMA — launched their own splinter group, the Sustainable Food Policy Alliance. The small coalition has backed a suite of more progressive policy stances on issues ranging from added sugars labeling to climate change and even immmigration reform.

“We’re really excited because we’re getting to weigh in on things without the drag of trying to get the rest of the industry on board,” said Brad Figel, vice president of public affairs at Mars, a founding member of SFPA. “It’s really the way forward. I think it’s going to be true for a lot of different sectors.”

Figel said the alliance, which is coordinated by Glover Park Group, allows the companies to engage on more issues on Capitol Hill, in part because taking a position only requires agreement from four members, not from dozens or even hundreds like in a typical association. SFPA is currently limited to its four members, but Figel said the alliance may consider additions in time.

The Plant Based Foods Association is another example of an upstart group in new food lobbying landscape, giving food companies more options for how they want to engage with Congress, as well as on state issues and with the public. PBFA has been at the forefront of the battle against restrictions on use of “meat” terminology in labeling, and successfully lobbied Congress last year to stop the farm bill from including language aimed at barring dairy terms from being used to market plant-based alternatives like almond milk.

The group launched in 2016 with 22 founding members and just a single staff member, but it’s grown rapidly: It now has 160 members and a staff of seven, plus lobbyists at the state and federal levels.

“I just don’t think there’s a need for one single, monolithic voice of the food industry. It no longer computes,” said Michele Simon, executive director of PBFA. She added that it can be challenging for food companies to agree on complex issues, even within the same sector.

“A lot of food companies are still trying to figure out what to do with changing tastes, and they’re all taking different paths,” Simon added.

Following the mass departure of GMA’s membership, Geoff Freeman was hired as president and CEO in the summer of 2018 and essentially tasked with trying to fix an association that was seen as being in free fall. Freeman, a 44-year-old who had previously led the American Gaming Association, which represents the U.S. casino industry, quickly downsized the association’s staff, cleaned out much of its leadership team, and began to refocus the 110-year-old organization toward consumer packaged goods.

The association has also scaled back its spending on lobbying. In the second quarter of this year, the association reported spending just over $443,000 on lobbying activities, according to disclosures. In the second quarter of 2018, the association reported spending roughly $877,000.

The group, which still counts PepsiCo, Kellogg, Land O’Lakes and many other heavyweights as members, has also ditched its K Street office for a more modest setup in Rosslyn, Va. Employees of GMA, many of whom are new to the association, now refer to the group as a “100-year-old startup.”

“We seek to carve out a new vision, a new mission for the organization. The name is just symbolic of what that is,” Freeman told POLITICO. “The way we’re representing the consumer packaged goods industry going forward is just so fundamentally different than what this industry association did for so many years.”

GMA was still the powerful, singular force that represented the industry’s interests as recently as a decade ago. But the Obama administration’s focus on food policy, combined with the flux in the food marketplace, eventually tore it apart.

One of the first public disagreements was over an FDA proposal to mandate “added sugars” labeling on Nutrition Facts panels for the first time. Major food companies within GMA disagreed about whether to oppose the plan. The discord was so deep that the association had to file split comments on the issue. Added sugars remains part of the Nutrition Facts label update, which will start to take effect in Jan. 2020.

A similar division arose over FDA’s push to establish voluntary sodium reduction targets, with major industry players like Nestlé and PepsiCo publicly endorsing the government’s strategy, while others, like Conagra, were deeply opposed to it.

Separately, the Salt Institute, a trade group that loudly opposed the government’s efforts to cut back on salt consumption, announced last spring it would dissolve after a century of representing salt makers. The announcement came right after the National Academies of Sciences, Engineering, and Medicine affirmed the government’s long-held position that Americans need to cut back on sodium.

Without broad agreement on how to approach topics like salt and sugar, it became nearly impossible for the industry to present a unified front to Congress, federal agencies or the White House, regardless of which party was in power.

The push for mandatory GMO labeling that unfolded during the Obama years further cemented the industry’s divisions. The fight got so ugly, with GMA member companies being boycotted for funding anti-labeling campaigns at the state level, that the group removed a membership listing from its website.

Several years later, it’s still not possible for the public to access GMA’s membership on its website, though the group recently shared a list with POLITICO. A spokesperson said the group’s membership will be displayed publicly when the association’s site is revamped. GMA also plans to announce new members in January, when its rebranding and name change becomes official.

Marion Nestle, a New York University professor who’s been a vocal critic of GMA, said the association is wise to completely reboot.

“I think GMA is smart to try to figure out what they can do to help their constituent companies in a situation in which the industry is going through a revolution, and they don’t really know how they’re going to keep up with it,” Nestle said in an interview.

“Losing half your budget is a wakeup call,” she said.

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