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Old Sun, Nov-26-17, 07:29
JEY100's Avatar
JEY100 JEY100 is offline
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Default Washington Food Fight - food industry lobby group splintering

A long Politico article about the recent upheaval at the Grocery Manufacturers of America lobby group. Food companies are responding to consumer demand for healthier products, with more labeling information like GMO. The food industries own diversification buying organic and other "healthier" companies runs counter to the lobbying efforts to stop GMO and "added sugar" labels

The big Washington food fight The food lobby is splintering as companies disagree about how to respond to changing consumer tastes.

Nestlé, the world’s largest food company, rocked food circles in late October with the news that it was leaving the industry’s most powerful lobbying group in Washington, the Grocery Manufacturers of America, amid disagreements about how to respond to changing consumer tastes.

The departure of a conglomerate that owns thousands of brands — from Hot Pockets to Deer Park water — was the most visible sign yet that the food industry’s reign in Washington is faltering as some companies scramble to adapt to rapidly evolving consumer demands while others are slower to embrace the trends. Long the attack group for large companies like Kraft and General Mills on legislative and regulatory issues, GMA now has members like Nestlé opposing some of its positions.

The splintering of the food lobby has been driven in part by an upheaval at the grocery store, where iconic brands are stagnating as millennials and moms seek healthier and more transparent products. But complacency and a lack of leadership at GMA are also to blame, according to interviews with more than a dozen current and former member companies, former staff and other industry leaders in Washington.

In the past year, the trickle of news about member companies deciding to leave GMA appear to not be one-offs, but a burgeoning trend.

Six months before Nestlé's decision, Campbell Soup Co., maker of Goldfish crackers and V8 juices, announced it was leaving GMA, in part because the association fought bitterly against mandatory labeling for foods with genetically modified ingredients, or GMOs. In what may have been a contrarian view, Campbell decided to stop fighting and instead embrace GMO labeling early last year, believing that consumers want more information about what's in their food and where it comes from — not less.

Other major food companies are also eyeing the door: Dean Foods, the largest dairy company in the country, has quietly decided to leave the association. Several others, including Mars — one of the largest private food companies that owns swaths of globally recognized brands, from candy to pet food — are considering it.

"Some of these companies are realizing that being more progressive is a good place to be, from a marketing perspective,” said Melissa Musiker, vice president and director of food and nutrition policy at APCO Worldwide, a public relations and consultancy firm. “They get kudos for it."

"In the past, there was protection in numbers — you kind of hunkered down and to the extent that these companies stuck together, they could win."

Nestlé and Mars declined to comment for this story. Campbell Soup Co. also declined to comment on why it publicly split with GMA last summer. A spokesperson for Dean Foods told POLITICO the company was leaving GMA “so we can prioritize and allocate our limited time and resources elsewhere,” and declined to comment further. Some in Washington speculate that Dean Foods left for fiscal reasons amid well-documented financial troubles, and not over an ideological division with GMA.

A permanent shift in consumer tastes

The food industry’s disarray in Washington has been simmering for a long time.

Companies are increasingly under pressure to find growth in a market where more and more consumers are seeking healthier fare, whether they’re buying organic baby food, cereal without artificial colors or meats raised without antibiotics. These changing tastes are no longer considered just a niche market driven by high-income tastes. The top 20 U.S. food and beverage companies lost roughly $18 billion in market share between 2011 and 2017, according to a recent analysis by Credit Suisse.

As legacy brands lag, food companies have two options: Change to compete or buy up the new brands that are already growing rapidly. Many of the cutting-edge brands have become parts of conglomerates over the past decade, exacerbating a culture clash in some cases between the old and the new: Naked Juice is now owned by PepsiCo, Honest Tea belongs to Coca-Cola, Larabar is under General Mills, Kashi is owned by Kellogg’s, and Nestlé just bought Blue Bottle, a cold brew coffee company with deep California roots.

Naked Juice is now owned by PepsiCo, Honest Tea (pictured here) belongs to Coca-Cola, Larabar is under General Mills, Kashi is owned by Kellogg’s, and Nestle just bought Blue Bottle, a cold brew coffee company with deep California roots.
Today, all of the largest food companies own brands like Betty Crocker alongside Annie’s organic macaroni and cheese, each of which may have competing priorities and values.

Roger Lowe, a spokesman for GMA, said that the association is adapting to these changes. “It is not so much an industry divided as an industry that has been tremendously disrupted and is evolving at an unprecedented pace,” he said. “There’s no question that companies — and GMA — are all different today than they were five years ago or three years ago — and that we all will continue to evolve and change at a faster pace.”

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