A Little Crack-up in Big Food
Big food is having a little crack-up. That iconic lobbying group for the food industry – the Grocery Manufacturers Association (GMA) – just lost the world’s biggest food company. Nestlé will drop its membership by the end of the year. This follows shortly after Campbell left the group this summer.
Responding to Consumer Pressure
When Campbell left, the company cited a “non-negotiable demand” for “real food” from consumers. CEO Denise Morrison said at the time that GMA had ceased to represent her company’s interests in serving its consumers.
A similar divide is obvious in Nestlé’s departure. GMA and Nestlé have increasingly taken opposing positions on food policy fights. GMA resisted new Nutrition Facts labels adopted by FDA. Nestlé embraced them. While GMA lobbied furiously to oppose GMO labeling regs, Nestlé sought ways to satisfy its consumers. A couple of years ago, Nestlé Corporate Affairs President Paul Bakus foreshadowed this split, saying:
The food industry has a big opportunity to be much more transparent and engaging. I can’t tell you how quickly change has happened even in the last five years, or two years. It behooves these companies to be more progressive and transparent.
Other big food companies are also leaving GMA – Mars and Dean Foods. Mars is yet another company that embraced the new Nutrition Facts label while GMA opposed it.
Big Food Adapting to Survive
GMA talks about its work on “consumer transparency, sustainability, product safety, and nutrition.” But unfortunately, its old habits of hunkering down to resist consumer-driven policies are hard to shake. Big food companies spend a lot of time and money to understand their consumers and align with them.
After all that listening, more companies are deciding that the old habits of GMA will make them look bad. Resisting consumer demands for transparency and “real food” won’t work. Upstart competitors – who want no part of the GMA – will take over.
One food innovator, John Foraker, says even bigger changes are coming. “Just wait. The next decade will be insane.”
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Grocery Shopping, photograph © Kristoffer Trolle / flickr
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November 27, 2017
November 27, 2017 at 8:18 am, Allen Browne said:
Interesting proof of the power of the consumer. Now the trick is how to harness that power so that healthier choices are available.
November 27, 2017 at 9:26 am, Ted said:
Indeed! Consumers want healthier options, but it’s not clear that they know what would be healthier.
November 27, 2017 at 11:54 pm, David Stone said:
Nope, but really all that matters for sales is that consumers believe that an option is healthier (e.g., non-GMO, sugar instead of H.F. corn syrup), and of course the food companies are happy to pander to (oops, I meant “align with”) those beliefs, no matter how irrational or wrong-headed unless constrained by law. That’s just business; the customer is always right.