Soft drinks brands on the defensive

Coke, Pepsi… iconic American brands that have travelled the world over and become a staple at every social event. For decades, their bubbly sweetness has symbolised youth, friendship, freedom and happiness. But their sugary alter-ego is gaining notoriety. And the voices of dissention are getting louder.

The murmurs of discontent began early in the millennium with a panel study of 50,000 US nurses. Results of the study showed that the nurses who significantly increased their consumption of sugary (ie non-diet) soft drinks tended to get diabetes at a significantly higher rate. Then came Super Size Me, the hyper-critical film that excoriated unhealthy fast foods and beverages, bringing excessive soft drink consumption to the world’s attention.

Ten years later, Michael Bloomberg, New York City’s three-term mayor, launched another powerful attack, pursuing a public health campaign against sugar and fat, with a proposed ban on sales of sugary beverages in sizes above 16 ounces from restaurants, delis, stadiums and food carts. The ban was struck down (with the help of the American Beverages Association) by a state judge earlier this year, just hours before it was due to take effect.

So happy days for the soft drinks industry, right? Apparently not. A spate of recent media attacks (supported by data and ‘confessions’ from former company executives) is making it impossible for the major players to ignore the evidence that these drinks are a prime culprit in the obesity epidemic affecting children. According to the Center for Science in the Public Interest, sugary drinks are the single biggest source of calories in the American diet.

A recent study of more than 10,000 children, conducted by the University of North Carolina, concurred that soft drinks brands on the defensive public health sugar-sweetened beverages are one of the primary sources of higher calorific intake in children. According to Kelly Brownell, a professor of psychology and epidemiology at the department of health at Yale University, 'liquid calories don’t register with the brain in the same way calories from foods do, so people who drink copious amounts of sweet liquids take in a greater number of calories without feeling full'.

Soft drinks brands are facing challenges not just from the media but from healthier beverages and non-traditional fizzy drinks. The bottled water business has grown substantially: Americans now drink on average about 58 gallons of bottled water a year – an increase of 38 per cent from 1998 – while soft drink consumption has fallen by 17 per cent over the same period. In parallel, brands such as SodaStream are promoting freshness, convenience and ecological benefits. The SodaStream ad run during this year’s Super Bowl showed crates of carbonated beverages exploding each time the user of a SodaStream pushed the button on his machine. An alternative version of the ad, rejected by CBS, delivered an even more explicit attack on Coke and Pepsi and received more than five million hits on YouTube.

Nevertheless, a number of factors make it unlikely that soft drinks will acquire pariah status just yet.

• The health movement is far from universal. In the US, drinking super-sized soda, like carrying a firearm, is considered an inviolable first amendment right. In Mississippi, a state where one in three adults is obese, an ‘anti-Bloomberg bill’ received bipartisan support. North Carolina followed with its own ‘common sense’ consumption act. In the UK, consumer concern over soft drinks has actually declined slightly. According to Giles Quick of Kantar World Panel, fried food tops the bad health list in the UK while carbonated beverages are considered unhealthy by only half as many people.

• Neither Coke nor Pepsi is standing on the sustainability sidelines. Both have been heavily engaged in initiatives to reduce waste and preserve water. According to their sustainability report, 85 per cent of Coke packaging is recyclable and the company is seeking to recycle up to 50 per cent of bottles and cans used annually in the US by 2015. Pepsi’s Dream Machine initiative has put some 4000 ‘reverse vending machines’ at the disposal of consumers, allowing them to earn points for recycling.

• Both Coke and Pepsi are also tackling the health issue more proactively. Pepsi is a leading member of the Healthy Weight Commitment Foundation, an organisation conducting an effort to reduce childhood obesity by 2015. Last year, Coke announced an $8.4 million donation to create 100 fitness centres across the US and fund fitness and nutrition programmes around the world.

But can a brand offset a ‘social ill’ with a social good? Humans are experts at compensating for bad behaviours with good ones. We give extra money in church after behaving poorly at home. We go on a crash diet on Monday after a weekend of excess. Why can’t the brands that are supposed to reflect our values do the same?

In my view, we shouldn’t allow the same hypocrisy in brands that we permit of ourselves. Brands are intended to stand for something. They are designed to reflect the best of our aspirational selves. Coke, Pepsi and other soft drink manufacturers must do more. Coke’s recent efforts to reduce portion sizes in the US, to replace sugary drinks with less calorific ones in school machines and to create a front-of-package labelling system to encourage healthier food choices are all big steps in the right direction. Its new ad campaign reminds viewers that all calories count in bodyweight control, including those in Coca-Cola drinks.

Coke and Pepsi’s recent pledge in the UK to reduce the calories in some of its soft drinks by at least 30% by 2014 is another positive move. Both companies’ strategic shift away from sweet carbonated beverages towards healthier options (such as Sobe, Naked and Tropicana for Pepsi, and Odwalla, Vitamin Water, Fuze and Minute Maid for Coke) is even more significant.

But these brands should also look at their soft drink strategies: limit promotion of the least healthy drinks, especially among vulnerable populations, and cease lobbying against mandatory federal guidelines for marketing of soft drinks to children.

Ultimately, the goal must be to create and market products that deliver all the pleasure with more natural ingredients, fewer calories and less impact on the environment. Only when they have achieved this will their happiness be truly contagious.

Leslie Pascaud is executive VP for branding and sustainable innovation at Added Value [email protected]