Americans' Tastes are Changing - Big Sugar Needs to Change, Too
Through decades of predictable business norms and conditioned consumers, American’s big food brands grew accustomed to marching upto Capitol Hill with one unified voice via The Grocery Manufacturers Association, and establishing policies that protected profitable manufacturing practices.
Unified, consolidated agreement powered the GMA lobby machine. By agreeing on policy positions that protected members’ manufacturing processes (think labor laws), and policies that did not disrupt the agricultural supply chain (think high-fructose corn syrup, and the sugar cartel), the GMA successfully fought off changes in consumer food labeling, prolonged the debate on the USDA food pyramid, and successfully suppressed innovative product development efforts beyond their big brand membership (think the 2006 Food Products Association merger). As long as American consumers remained committed to their boring daily diet of highly processed foods featuring loads of sugar, salt and corn syrup, there would never be a crack in the unified voice of the big food industry, specifically regarding positions on legislative food policy changes.
Despite the GMA’s member companies having competitive values, diverse go-to-market strategies and varying consumer insights, the big food company coalition was satisfied with the Grocery Manufacturers Association’s ability to represent the status quo. The organization grew its membership base, collected millions of dollars in donations, and paid big salaries to leadership that represented them ferociously.
The sugar high is over. Now everyone is blaming each other for the collapse of a unified food industry voice. The GMA effectively lobbied its way to irrelevancy because consumers had already found a better way to eat.
The impact of these protectionist policies on consumers was not really the concern of the GMA — consumers have been fending for themselves for years, as consumer protection groups have consolidated power through such groups as The Center for Science in the Public Interest, founded 60 years after the founding of the GMA.
Now it’s the industry itself that is struggling to keep up with the transformational changes being forced on it by accelerated shifts in consumer behavior, especially the widespread obsession with health and wellness. Complacent consumers have woken up to the disastrous effects of eating uninteresting, over-sugared and salted, processed foods. They’ve figured out that their united voice concerning what big food manufacturers were cooking up could actually have an impact on food policy and the regulatory environment.
Taking “bad for you” ingredients out has been an industry-wide mandate for more than a decade, and consumers have been voting with their wallets on their preferred food brands. Healthy lifestyle and clean ingredient food brands have caused more than $18 billion in market share declines for the top 20 big food brands, according to a Credit Suisse study earlier this year.
So what happened?
Instead of actively staying close to consumers by leveraging GMA member resources in the areas of consumer research, food science, nutritional analysis, product innovation and other competencies that monitor and respond to emerging trends, the GMA vigorously fought the changing consumer landscape.
Lost efforts in 2012 over GMO identification in California and the 2014 Nutritional Facts label opposition caused the chasm that began to sour GMA members. The sweet high that came from GMA’s ability to raise millions in donations from its members for the purpose of pushing back on proposed policy changes at the state level quickly turned into a bitter hangover when flawed local lobbying efforts burned through millions and had no effect on legislators. Fighting what consumers insisted on ingesting has resulted in substantial penalties and lawsuits that are ultimately breaking a GMA sugar daddy’s bank.
If you disregard its deafness to consumers, GMA leadership has just been doing its job, supporting big food manufacturers in continuing to do things their own way. The real challenge is the food industry’s inability to embrace a more socially responsible approach to aligning with consumer values, versus self-serving policies that protect members’ margins. Big food fought against consumers, instead of adapting to them.
Now, the GMA’s constituency is splintered into groups that are either migrating to serve the new consumer dynamic or else fighting it vigorously. But despite the GMA’s own leadership issues, the big food industry members that have built brands on socially responsible values and have a legacy of listening to consumers closely need to demonstrate leadership by coalescing the industry. The GMA mission needs to be redefined so that it embraces changing consumer dynamics rather than fighting them.
What else could the GMA be doing now? Here’s another irony: They have a huge science center they could have unleashed years ago to get in front of this issue. An effective approach would be to shift GMA resources toward educating the regulatory community (the USDA and FDA) on industry advances that accommodate consumer preferences. Aligning with other food industry associations that are closer to the new consumer trends would also provide credibility and scale for a more reputable industry voice.
Simple and immediate actions like these would most likely reset the organization’s image in the nation’s capital, and stop the increasingly unhealthy bailout of legacy members. It’s important to the larger food industry that the GMA remains a strong voice that leverages its many resources beyond lobbying for the good of expanding domestic consumption of U.S.- manufactured food.
Jobs depend on it.