Posted on Aug 1, 2019


TL;DR: Battling The Bulge, Delivery Service Debacles, And Where’s The Agency?

Battling The Bulge

Here’s what you need to know…

Food, agriculture, consumer packaged goods, health, and other related industries beware…we’re in for a food fight. From the European Union (EU) to the United Kingdom and even in Latin America, nongovernmental organizations (NGOs) and activists are pressuring governments and supranational bodies to crack down on corporate interests that can be blamed and held accountable for the rising levels of obesity around the world.

While the “obesity wars” have been dragging on for years, the nature of the battle is rapidly changing, and it presents an inflection point for companies and industry groups. Here at Delve, we have deep experience helping our clients understand and anticipate how such public policy movements begin, gain momentum, spread around the world, and impact our clients’ operating environments. Here’s what you need to know about this key trend so that your business is prepared for these developments in the fight against obesity:

  • The Inflection Point: Just recently seven NGOs, brandishing new studies that claim to show that obesity carries more cancer risks than smoking, announced they were leaving the European Platform for Diet, Physical Activity, and Health. The NGOs argue the Platform has failed to prove it had made “any meaningful impact on curbing childhood obesity.” In short, the NGOs decided that they can influence a greater impact outside of traditional institutions.
     
  • The Repercussions Of This Inflection Point In The EU And Latin America: A recently released UN report found that 338 million school-age children around the world are now considered obese, and the staggering figures have led Great Britain’s National Health Service (NHS) Chief Executive Simon Stevens to declare that “obesity is the new smoking.” Stevens continued signaling the increased risks for companies when he stated that “families, food businesses and government all need to play their part if we’re to avoid copying America’s damaging and costly example.” The declaration, part of a broader message from activists and some policymakers about obesity, suggest that their approach could match the investigate, vilify, tax, and prosecute tactics used against the tobacco companies in the last century. Indeed, the British government, which already implemented a tax on sugary drinks in April 2018, recently released a green paper that announced supermarkets can no longer sell energy drinks to children under the age of 16 and floated a potential sugar tax on milkshakes. While new Prime Minister Boris Johnson has voiced his opposition to “the creep of the nanny state” in the past and vowed to review these “sin taxes,” the development is instructive of anti-obesity networks that will not stop at new policies until people are compelled to behave how they want. Meanwhile, in Latin America, governments have passed new laws aimed at reducing obesity, including banning advertisements for foods high in calories and saturated fat between certain hours in Chile.
     
  • How Do Things Currently Look In the U.S.? Similar to other countries, a number of experts and doctors have called on the U.S. government to do more to tackle obesity, as 70% of American adults are considered overweight. Earlier this year, Congressman Ron Kind (D-WI) introduced the “Treat and Reduce Obesity Act of 2019,” which aims to amend the Social Security Act to provide for the coordination of programs to prevent and treat obesity. It has 116 co-sponsors from both parties. Currently, the U.S. Departments of Agriculture and Health and Human Services are developing the 2020-2025 Dietary Guidelines for Americans, which is updated every five years to help Americans eat a healthier diet. The food industry has been able to influence the list in the past and successfully lobbied against adding sustainability guidelines back in 2015. However, in the past year industry influence has been exposed and become the focus of activist criticism, part of an effort by NGOs and advocacy groups to discourage and undermine similar efforts this time around. Outside of government, civil society organizations are “playing their part” in combating obesity in America, with one philanthropic organization donating over $40 million to investigate the causes of obesity, which can be utilized by advocacy campaigns to reshape and influence government policies related to it.
     
  • How Can You Prepare For This New Anti-Obesity Activism? An understanding of how momentum builds for these types of public policy movements, as well as the taxonomy of the networks of influence that enable them to gain that momentum, provides a roadmap for how a company anticipating impacts from this battle can develop an effective public affairs strategy to mitigate their risk from such efforts. The new energy behind anti-obesity networks can unfairly vilify law-abiding, responsible companies, driving a wedge between industry and its consumers as well as the policymakers that can determine the industry’s future. Gaining and leveraging an information advantage about this activism can enable industry to engage with policymakers and regulators now, before they face intense pressure to act.

The incoming “obesity wars” in the U.S. will touch many industries, both directly and indirectly, and affect all consumers, including their choices in the marketplace and the cost of those choices. The future of the policy and regulatory fight is uncertain, but companies can work to shape the future. In order to avoid the same fate as their counterparts in the EU and Latin America, companies in the U.S. will need to have an information advantage over their opposition to be prepared for any public affairs (or, ahem, food) fight they may face.

News You Can Use

DELIVERY SERVICE DEBACLES

Last week, we covered the public affairs challenges at Grubhub, but it is not the only food delivery service facing a public affairs challenge. After previously defending its tipping model, DoorDash came under attack after a New York Times article exposed the company’s practice of using customer tips to subsidize the guaranteed minimum wages the company pays delivery drivers rather than have the tips go directly to its “Dashers.” Following public outrage from customers feeling mislead, CEO Tony Xu announced on Twitter that the company would change its tipping system, ironically leaving some “Dashers” concerned their guaranteed minimum will now decrease.

This episode serves as a reminder that companies must understand their own vulnerabilities to craft public affairs strategies to protect and defend their operations and policies from scrutiny, foster employee engagement, and avoid bad press. Especially as the national conversation around the future of work and minimum wage laws increases, gig economy companies need to be proactive about managing their exposure to political and reputational risks.

WHOSE MEDIA MAKES THE PRESIDENT?

In Taiwan’s recent presidential primary for the opposition party, the victory by populist mayor Han Kuo-yu of the island nation’s second-largest city came with some help from unexpected friends. Two major news channels promoting “nonstop coverage” of Han, whose party has shown sympathy for Beijing’s view that Taiwan is part of the broader Chinese nation, are influenced by the Chinese government.

Largely credited for helping create the “Han Wave” that “transformed a politician seen as past his prime into a resurgent star,” CTi-TV and CTV are owned by the Want Want China Times Group, a media company that infuses the Chinese Communist Party’s voice and angle into its coverage.

China’s leveraging of democratic politics and a free media to meddle in its rival’s elections is a cautionary tale and national security issue to free democracies around the world. Besides media, a variety of industries should be aware of the creative approaches Beijing employs to influence politics and policy outside its borders, especially in light of popular camera apps worldwide that can put international users’ data at the fingertips of the Chinese Communist Party.

WHERE’S THE AGENCY?

The Federal Trade Commission (FTC) reached a $5 billion settlement with Facebook over its collection and handling of users’ data. When news of the settlement broke, Facebook’s stock price hit its highest point in almost a year, and bipartisan derision arose over the historically large, yet “laughably small” penalty when considering Facebook’s vast resources.

Democrats and consumer advocates are now calling for a new way to regulate Silicon Valley, claiming the FTC does not have the money, staff, or resources to appropriately handle monitoring these online platforms, especially with its already broad oversight duties. Proposals include creating a special agency to protect online privacy or a fully new department that focuses solely on online platforms, while others are pushing to just give the FTC the resources and power it needs to properly regulate. With new regulatory powers, including potentially a new regulatory agency, hanging in the balance, companies and causes with the potential to be impacted should gear up now to best influence an outcome favorable to their interests.

TOFURKY FIGHTS BACK

As we predicted, the public policy fights around plant-based meat are increasing, but this time Tofurky is fighting back. Tofurky, which sells plant-based meat alternatives, and the ACLU have teamed up to file a federal lawsuit claiming an Arkansas bill violates free speech rights. Deemed the “truth in labeling” bill, it is slated to go into effect in March and would ban meatless products from being described by meat-adjacent phrases, such as “veggie burgers,” claiming such names confuse customers.

ACLU calls this claim “absurdly patronizing” and instead claims the bill limits free speech and restricts customer access to healthier, more sustainable choices. This lawsuit may set a precedent for cases in other states and will also affect dairy alternatives and vegetable alternatives to grains (looking at you, cauliflower “rice”).  Arkansas is currently one of six states (along with a proposal in the EU) that has passed a law restricting meat-like labels, and given the momentum the winner of the suit can be expected to get, the meat industry is hoping to come away better off than the dairy industry has fared with alternatives. Companies and related interests in other states should start preparing for similar laws and lawsuits, as this fight is only just starting.

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