Category Archives: Feet to the Fire

FDA Action Needed to Address Diet Coke’s Blatant & Unlawful Use of Heart Health Claims

The Public Health Advocacy Institute is asking the FDA to investigate and take enforcement action against The Coca-Cola Company’s unlawful use of heart health claims on cans of Diet Coke.  In February of 2010, 2011 and 2012, The Coca-Cola Company has released Diet Coke cans labeled with a large red heart symbol, the National Heart Lung and Blood Institute’s “The Heart Truth” Red Dress logo, and references to women’s heart health.   Taken together, the large red heart symbol, the Red Dress logo and references to heart health imply a relationship between consuming a specific food, Diet Coke, and reduced risk for heart disease.  The cans pictured below represent the cans in circulation in 2012 (left), 2011 (center) and 2010 (right).

The FDA defines health claims to include “any claim made on the label or in labeling of a food…that expressly or by implication, including ‘third party’ references, written statements (e.g., a brand name including a term such as ‘heart’), symbols (e.g., a heart symbol), or vignettes, characterizes the relationship of any substance to a disease or health-related condition.” 21 CFR § 101.14 (a)(1). In its food labeling guidance the FDA states, “ health claims characterize a relationship between a substance (specific food component or a specific food) and a disease (e.g., lung cancer or heart disease) or health-related condition  (e.g., high blood pressure), and are supported by scientific evidence (see 21 CFR 101.1472).” FDA, Guidance for Industry: A Food Labeling Guide (April 2008), http://www.fda.gov.  The use of the heart symbol, the phrase “The Heart Truth” and the reference to a national health organization implies that Diet Coke consumption is beneficial to heart health. This claim is not supported by scientific evidence and is not otherwise allowed under FDA regulations.

This type of misbranding is especially damaging to the public because it unequivocally links the product to a desired health outcome through multiple uses of the word “heart” and the use of a heart symbol—expressly the type of symbols, third party references and words the FDA references in its regulations and guidance on health claims for the food industry. The FDA should act immediately to investigate The Coca-Cola Company’s unlawful use of this health claim, issue the appropriate warning letter and take enforcement action as necessary.

 

General Mills Uses Whole Grain Claims to Distract from Sugar Content

By Cara Wilking, Staff Attorney

Like a good mother, General Mills loves all of her “Big G” cereals the same. Consumers, however, should not. The company has chosen to market all of its Big G cereals as containing “More Whole Grain Than Any Other Ingredient*” (the asterisk takes you to the disclaimer “*as compared to any other single ingredient”). The side panel states “That’s why it’s first on the ingredient list” and tells consumers the USDA suggests looking for foods that list whole grains first. A recent report by the Environmental Working Group found that parents should be especially aware of sugar content when buying breakfast cereals for children.

Federally mandated weight-based cereal serving sizes, and the industry sponsored front-of-package Nutrition Keys labeling scheme has meant that when consumers compare calories most cereals look just about the same. The Big G cereals Wheaties, Kix, Lucky Charms, Cookie Crisp, and Cinnamon Burst Cheerios all have 100 or 110 calories per serving. But sugar content and serving size by volume varies widely. For example, Kix and Cinnamon Burst Cheerios both list 110 calories per serving, but Kix has just 3 grams of sugar per 1 ¼ cup serving while the pre-sweetened Cheerios product has 9 grams of sugar per 1 cup.

General Mills’ use of a uniform campaign for its Big G cereals is designed to make its entire portfolio of products look healthy by distracting attention from sugar content. Its website even features a page about sugar  comparing plain Cheerios (1 gram of sugar per serving) to Trix (10 grams of sugar per serving ) that asks: “From a calorie and nutrient standpoint, are both products a good breakfast choice?” The answer:  “Yes, they are. In fact, all General Mills cereals are lower calorie, nutrient dense choices.”

Perhaps this campaign is a sign that its sugary cereals are losing market share? If it is, General Mills should put its resources into developing breakfast products that are actually healthy for children instead of trying to prop up sugary cereal sales with claims about whole grain content.

New Big G Cereal Boxes

Big G Cereal Box Side Panel

Lucky Charms Box

The Cost of McDonald’s Happy Meal Toys

By Cara Wilking, Staff Attorney

The passage of San Francisco’s Healthy Food Incentives Ordinance and McDonald’s recent decision to “comply” with the law by charging 10 cents in order to be able to include toys with meals that do not meet minimal nutritional criteria has engendered a lot of public debate. The following table summarizes information from a 2005 Massachusetts Appellate Tax Board decision with Happy Meal cost information from the period between 1999 and 2001:

Toy, Food, Condiment & Paper Costs to McDonald’s Restaraunts of Massachusetts (1999-2001) in US Dollars

 

Hamburger Happy Meal

Cheese-burger Happy Meal

4-piece McNugget Happy Meal

Happy Meal Toy Only

Toy cost

0.43

0.4299

0.4299

0.43

Food cost

0.3104

0.3561

0.4147

 

Condiment cost

0.0162

0.0162

0.0476 (average)

 

Paper cost

0.0434

0.0340

0.049

 

Total cost

0.8000

0.8362

0.9412

 

Menu Price

1.99

2.39

2.69

1.69

For the periods covered, McDonald’s reported that it paid its toy supplier 43 cents per toy. The total cost to McDonald’s for the toy and packaging of the Happy Meals was greater than the cost of food for each Happy Meal type. McDonald’s included a toy with every Happy Meal and sold the toys separately for a retail price of $1.69. The company  noted that it had a dedicated key on its registers in order to process separate toy sales.

In an issue advertisement run by McDonald’s explaining its 10 cent Happy Meal toy plan, the company wrote: “we feel a responsibility to our customers – including parents…who would like to have the option of purchasing…[a toy] separately for their kids.” In reality, prior to the ordinance all customers, including parents, had the option to purchase a toy separate from a Happy Meal. To comply with the letter and the spirit of San Francisco’s ordinance, McDonald’s could have stopped putting toys in with Happy Meals that did not meet nutritional criteria. Customers wanting to buy a toy separately, including parents, would then be treated as they always have been—rung up using the dedicated register key and charged the retail price of the toy.

The good news is that, as Michele Simon points out, there is an easy legal fix to the 10 cent toy strategy. In the short term, McDonald’s response amounts to an incredible missed opportunity to break away from a business model whereby the inedible portion of its children’s meals cost more to produce than the edible portion. The cost spent on toys could be spent to improve the nutritional profile of its children’s menu. The result could have been less trash in the form of discarded toys, a boon to fruit and vegetable producers all over the United States who supply McDonald’s, and, most importantly, healthier kids.

FOR MORE INFORMATION ABOUT PESTER POWER MARKETING STRATEGIES PLEASE SEE OUR PESTER POWER ISSUE BRIEF.

Coca-Cola Unscathed by Happy Meal Changes?

1.3 ounces of french fries are out. Caramel dipping sauce is out. A few apple slices are in. Sugary drinks, however, appear to be fully in the mix if not more so now. The 12 oz. “child’s size” Happy Meal soft drink, ranging from 110-120 calories for the non-diet carbonated options, remains the same. The new chocolate milk option has 170 calories and 25 grams of sugar. To put that into perspective, the container of caramel dipping sauce that will no longer be offered has 70 calories and 9 grams of sugar. As the fountain syrup supplier for McDonald’s, The Coca-Cola Company must be rather pleased that McDonald’s made no overt change to its default drink option for its “most popular” Happy Meal combinations–soda. Chocolate milk may compete with soda, but  for parents concerned about calories McDonald’s has managed to position its Coca-Cola brand Happy Meal soda offerings as lower calorie alternatives to the flavored milk. Makes one wonder whether The Coca-Cola Company is whistling “badda ba, ba ba, I’m lovin’ it” in response to McDonald’s Happy Meal menu changes.

McDonald’s Happy Meals with Soda & Fries Still the “Most Popular” Meal Combinations

 

by Cara Wilking, J.D.

The National Restaurant Association announced last week  that a number of chain restaurants will be offering healthier children’s meal menu options. McDonald’s has opted not to participate in the initiative.  Likely it will point to the fact that it already offers apple slices and milk and that it only advertises the healthier versions of its Happy Meals. These steps, however, do not appear to have translated into making its healthier Happy Meal combinations its most popular Happy Meal combinations.

In a letter dated June 7, 2011, McDonald’s touted its range of children’s menu options and included fact sheets providing nutritional information for its children’s meals. The fact sheets feature six Happy Meal combinations and state that the meal combinations pictured “represent two advertised meals, three most popular meals and Cheeseburger, Apple Dippers and low-fat milk meal.” According to McDonald’s  Children’s Food and Beverage Advertising Initiative advertising pledge its “advertised meals” are the 4-piece Chicken McNuggets Happy Meal with apple dippers, low fat caramel dip and a jug of 1% low fat white milk and the Hamburger Happy Meal with apple dippers, low fat caramel dip and a jug of 1% low fat white milk. By process of elimination, the three “most popular” meal combinations emerge as:

  • McDonald’s Chicken McNugget Happy Meal with small french fries and a 12 oz. soft drink,
  • McDonald’s Hamburger Happy Meal with small french fries and a 12 oz. soft drink, and
  • McDonald’s Cheeseburger Happy Meal with small french fries and a 12 oz. soft drink.*

The three most popular combinations include french fries and soda despite the fact that McDonald’s only advertises combinations with apple slices and milk.  This is most likely because these less healthy options remain the default when filling Happy Meal orders. If McDonald’s is serious about child health it should take real measures to ensure that its healthiest Happy Meal options become its most popular options.

*McDonald’s was contacted last week to confirm this interpretation of its fact sheets and has yet to do so.

Organizations that Care About Health Should Play No Part in the Soft Drink Industry’s Effort to Rehabilitate Its Public Image

by Cara Wilking, J.D.

CLICK HERE DOWNLOAD THIS POST AS A PDF

INTRODUCTION

The United States has the highest per capita rate of carbonated soft drink consumption in the world at 736 eight-ounce servings or 46 gallons per person in 2009.[1] The soft drink industry is dominated by three major companies: The Coca-Cola Company (“Coke”), PepsiCo. (“Pepsi”), and Dr. Pepper Snapple (“DPS”).  Soft drink companies produce concentrate and fountain syrup, and are responsible for marketing existing products and developing new products. Bottlers mix concentrate from soft drink companies and mix it with sweeteners and water to produce bottled and canned beverages. The American Beverage Association (“ABA”) is the industry association representing the non-alcoholic beverage industry. While the United States still has the highest per capita consumption of carbonated soft drinks in the world, overall sales of full-sugar carbonated soft drinks have been declining in recent years. In response to this decline in sales, the soft drink industry has reinvigorated its efforts to engage the public via corporate social responsibility tactics designed to rehabilitate the image of its products.

SOFT DRINK INDUSTRY CORPORATE SOCIAL RESPONSIBILITY

As large corporations, Coke, Pepsi and DPS, all undertake corporate social responsibility (CSR) campaigns. Corporate social responsibility generally encompasses a company’s activities and value statements with respect to philanthropy, community, workplace diversity, safety, human rights, and environment. There are various reasons why companies pursue CSR including: organizational values, reaction to threats to transaction costs, brand and competitive positioning, marketing, publicity, and innovation.[2] Concerns generally motivating the soft drink industry’s CSR efforts are evident in The Coca-Cola Company’s 2009 Annual Report:

Consumers, public health officials and government officials are becoming increasingly concerned about the public health consequences associated with obesity, particularly among young people. In addition, some researchers, health advocates and dietary guidelines are encouraging consumers to reduce consumption of sugar-sweetened beverages, including those sweetened with HFCS or other nutritive sweeteners. Increasing public concern about these issues; possible new taxes and governmental regulations concerning the marketing, labeling or availability of our beverages; and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the marketing, labeling or sale of sugar-sweetened beverages may reduce demand for our beverages, which could affect our profitability.

When faced with such public concern, CSR efforts aim at “legitimizing a corporation’s activities and increasing corporate acceptance.”[3] Philanthropy and cause-marketing campaigns are key parts of the soft drink industry’s CSR efforts.

Soft Drink Industry Philanthropy

Coke and Pepsi both have corporate foundations that make grants to non-profit organizations and institutions.  In 2008, the Coca-Cola Foundation Inc. made over $36 million in grants to organizations worldwide.[4] In 2009, the PepsiCo. Foundation, Inc. made $27.9 million in domestic grants.[5] In order to receive a grant, applicants must engage in work that meets the stated goals of the foundation, make an application and, once funded, follow the grant guidelines. The Coca-Cola Foundation and the PepsiCo. Foundation are required to publicly disclose grant recipients and total assets and expenditures to the Internal Revenue Service in order to maintain tax-exempt status.

Soft Drink Industry Cause-Marketing Campaigns

The use of cause-marketing campaigns is a growing trend facilitated by the rise of social networking online. Also referred to as “cause-related marketing,” cause-marketing traditionally has been defined as “a mutually beneficial collaboration between a corporation and a nonprofit in which their respective assets are combined to: create shareholder and social value; connect with a range of constituents (be they consumers, employees, or suppliers); and communicate the shared values of both organizations.”[6] Cause-marketing is distinct from corporate philanthropy because the corporate funds distributed “are not outright gifts to a nonprofit organization, so they are not treated as tax-deductible charitable contributions.”[7]

The Pepsi Refresh Project is an example of a cause-marketing campaign. Pepsi-Refresh is a program whereby members of the public submit ideas with a funding request and vote on whether or not to fund the concept. In 2010, PepsiCo pledged $20 million in funds for the Refresh campaign. This amount is distinct from its corporate foundation giving made through the PepsiCo Foundation and, as a marketing expenditure, is not subject to the same public disclosures required of private foundations. The underlying goal of the Pepsi Refresh cause marketing campaign is to sell more Pepsi products. When asked if Pepsi Refresh has been successful, Melisa Tezanos, Communications Director of PepsiCo Americas Beverages, replied:

Pepsi Refresh has been an overwhelming success. With over 2.8 billion (with a “B”!) earned media impressions, the project exceeded our internal benchmarks early in the year and we’ve seen an improvement in key brand health metrics. In fact, when Millennials, an important cohort group for Pepsi, know about the Refresh Project their purchase intent goes up.[8]

Ms. Tezanos clearly defines “success” not in terms of work done in the community funded by the program, but rather in terms of increasing the profile of Pepsi products and increasing sales amongst a key demographic. Social media is an important tool in cause-marketing campaigns as it facilitates the sharing of campaign materials that are embedded with product advertising and enables individuals to recruit other individuals to the campaign with relatively little effort.

ENSURING THE INTEGRITY OF YOUR ORGANIZATION’S HEALTH PROMOTION EFFORTS

The practical reality is that soft drinks are now for sale in almost every venue, e.g. hospitals, universities, youth centers, and public buildings via vending machines and on-site retail establishments.  In addition, corporate philanthropy by the soft drink industry and other private companies provides funding to a number of institutions and organizations that also have an interest in health promotion.  While organizations should re-examine traditional arms-length business relationships and donor/recipient relationships, emerging soft drink industry corporate social responsibility efforts that use cause-marketing and public relations tactics require special attention.  As part of a deliberate CSR strategy, these campaigns are embedded with product advertising, and often require participants to enlist other participants via social networking online. In addition, cause-marketing seeks to build an association between a company’s products and a trusted non-profit organization in order to build market share.  Organizations that care about health should establish a policy that identifies and distinguishes between traditional business relationships, corporate philanthropy and cause-marketing and should commit to not participate in cause-marketing campaigns that promote products, such as sugary drinks, that pose a public health threat.


[1] Beverage Digest, Special Issues: Top-10 CSD Results for 2009 (March 24, 2010), http://www.beverage-digest.com/pdf/top-10_2010.pdf.

[2] Michael J. Maloni & Michael E. Brown, Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry, 68 J. Bus. Ethics 35, 36 (2006).

[3] Guido Palazzo & Ulf Richter, CSR Business as Usual? The Case of the Tobacco Industry, 61 J. Bus. Ethics 387, 390 (2005).

[4] The Coca-Cola Foundation, Inc., 2008 Form 990-PF.

[5] PepsiCo. Foundation, Inc. 2009 Form 990-PF.

[6][vi] The Foundation Center, Frequently Asked Questions, http://foundationcenter.org/getstarted/faqs/html/cause_marketing.html.
[7] Id.

[8] Christie Garton, Pepsi exec dishes on Pepsi Refresh, future plans for cause marketing, USA Today (Nov. 5, 2010).

 

State Laws Prevent Local Control Over Much More Than Just Happy Meal Toys

Prepared by Cara Wilking, J.D., Staff Attorney

Santa Clara County, CA and the City and County of San Francisco, CA enacted ordinances requiring restaurants to meet nutrition criteria for children’s meals that use incentive items such as toys to drive child consumer demand. Neither law bans the use of toys or other incentive items, and both laws are designed to protect children from being baited into requesting unhealthy meals.  The Governor of Arizona recently signed into law a provision barring local governments from putting any limits on the use of “consumer incentive items” in “retail food establishment marketing.”  Florida currently has an even broader law on the Governor’s desk that would prevent local control over “all matters related to the nutritional content and marketing of foods offered” at public food and lodging establishments. As chronicled by the LA Times, both of these laws were carefully orchestrated by the restaurant industry in response to so-called “toy bans.” In point of fact, both laws go far beyond Happy Meal toys.

In addition to protecting vulnerable child consumers, local governments regulate business conduct under their police power and zoning authority for a number of reasons including aesthetics, public health and public safety.  Arizona’s consumer incentives law essentially exempts food retailers from any local regulation that may have an impact on their business activities related to consumer incentives.  “Consumer incentives” are broadly defined to include:  “any licensed media character, toy, game, trading card, contest, point accumulation, club membership, admission ticket, token, code or password for digital access, coupon, voucher, incentive, crayons, coloring placements or other premium prize or consumer product” associated with a meal served by or acquired from a restaurant, food establishment or convenience store.  The legislation pending in Florida strips local control over “all matters related to the nutritional content and marketing of foods offered” at public food and lodging establishments.

Many communities maintain the character of their communities through local aesthetic-related zoning laws. Imagine a small city with a historic downtown preserved by local zoning ordinances to protect the aesthetic character of the city. The community becomes concerned when a quick service restaurant starts putting large signs in its windows marketing a combo meal with a wrapper that one can scan with one’s phone to get points towards a future purchase.  A local authority goes out to talk to the franchise owner and ask him to remove the signs as they are not in keeping with the local zoning ordinance. The restaurant owner refuses to remove the signs.  Under the legislation enacted in Arizona and pending in Florida, the city would be powerless to challenge the practice.

The as yet to be enacted Florida law, is so broad that it would prevent local governments from requiring additional nutritional disclosures to consumers about the calorie or sodium content of restaurant menu items.  In addition, some states delegate consumer protection authority to city and county attorneys. Such authority was used by a city attorney to make the first formal challenge to misleading “Immunity” claims on children’s cereal marketed at the height of the swine flu outbreak. The pending Florida law arguably would even exempt any food marketing by a restaurant or public lodging from local city or county attorney enforcement of deceptive and unfair business practices laws.

A recent story by Reuters run in a number of news outlets analogized  the current legislation to “cheeseburger” or “commonsense consumption” bills, also sponsored by the restaurant industry. Cheeseburger bills are on the books in over 20 states and bar personal injury claims against food makers and restaurants for injuries related to long term over-consumption of food. Many state cheeseburger bills, however, do not immunize food sellers from liability when they knowingly violate laws pertaining to marketing, distributing, advertising, labeling or sale of the goods such as state consumer protection statutes prohibiting deceptive, unfair or unconscionable trade practices. The very purpose of local ordinances tying child incentive items to nutritional quality is to protect children from the fundamentally unfair and deceptive use of toys to generate child requests for unhealthy foods. The Arizona and Florida laws contain no such exemption to allow local intervention to protect vulnerable consumers from deceptive and unfair food marketing.

The law in Arizona and the pending legislation in Florida, strip local governments not only of the ability to protect children from harmful business conduct, their expansive nature jeopardizes local control over many other important business conduct issues.  These laws fundamentally change the rules of the game that local governments have depended on to maintain community character and to protect their communities.

Unclear on calories: GMA & FMI’s front-of-package “Nutrition Keys” omit key calorie information

Today the Grocery Manufacturers Association (GMA), the packaged food and beverage industry’s trade association, and Food Marketing Institute (FMI), the food retailer’s trade assocation, revealed a front of package labeling scheme designed to “complement the Clear on Calories labeling system developed by the American Beverage Association,” the non-alcoholic beverage industry’s trade association. It seems GMA and FMI can’t even give the public straightforward information even when launching a campaign intended to reduce consumer confusion.

What’s Missing From This Picture?

GMA and FMI’s joint Fact Sheet states : “Under the Nutrition Keys program, participating food and beverage companies will place an icon on the front of their products that displays calories, saturated fat, sodium and sugar per serving. The icon will also tell consumers how each serving of a product contributes to their overall diet based on recommended daily nutrition intake as established by the federal government’s U.S. Dietary Guidelines, and expressed as percent of daily value.” The examples used by GMA/FMI provide a percentage of daily values for fat, sodium and nutrients but DOT NOT provide a percentage that corresponds to the percentage of a 2,000 calorie per day diet (sugar is not labeled because there is no estalished percent daily value for sugars at present). None of the graphic examples used by GMA/FMI or the American Beverage Association include a bubble for the percentage of an average 2,000 calorie per day intake.

When it Comes to Calories, “Nutrition Keys” Differs from the UK GDA System

The GMA/FMI Fact Sheet states “Nutrition Keys is in use on a voluntary basis in the United Kingdom, where it enjoys wide consumer acceptance. In the U.K., 83% of consumers are aware of the icon and 63% report that they use the information summary when they make decisions at the point of purchase.” While the GMA/FMI do not provide an example of the precise labeling system referenced, a similar U.K. system (the GDA sytem) contains a % of average daily calories in the calorie bubble. The GMA/FMI differs materially from the U.K. scheme–calories are not put into the context of a % of average daily calorie intake.

Nothing New & A Step Backward

GMA and FMI’s joint Press Release describes the initiative as “the most significant modernization of food labels since the Nutrition Labeling and Education Act of 1990. The scheme, however, appears to be the exact same scheme employed by General Mills and Kellogg’s on their cereal products  for the last several years.  Those schemes, at least initially, contained a disclosure of the % of average daily calorie intake–the GMA/FMI scheme does not.