Melissa Musiker is the global lead of APCO’s nutrition policy & food consumer goods practice based in Washington, D.C., Julie Jack is a senior director for strategic communication based in New York, and Lillian Reisser is a consultant for APCO’s health policy practice in Washington, D.C.
A big part of what we do at APCO is listen to the stakeholder conversations on issues that impact our clients and their sectors. From this listening, it has become clear to us that the biggest communications challenge for the food and beverage industry is that everyone is a stakeholder because everyone needs to eat. And because everyone eats and because it is so trendy to be a little bit obsessive and incredibly knowledgeable about any and all things food and drink related, there is a growing population of pundits sharing their viewpoints through both social and traditional media. We’re not sure there is another industry with the same challenge. Thus, consumers, arguably the most important stakeholder for the food and beverage industry, make their choices in a noisy echo chamber where they are inundated with an abundance of information about what they eat and drink and how it is impacting their health.
As the end of 2013 approaches, we at APCO are already looking to the year ahead. Our team has identified six big trends that we think will have a significant impact on our food, beverage and agriculture sector clients in 2014.
Trend 1: Value Chain Activism
Stakeholders are becoming increasingly sophisticated in the way that they critique companies, evaluating and providing commentary on an issue across the entire value chain. For example, an article in National Geographic about sugar linked its impact on human health and wellness to environmental sustainability, social justice, human rights and historical practices—weaving together a compelling narrative that sugar is bad. This tells us that companies should engage and communicate outside of issue silos and provide the higher level of transparency that stakeholders currently expect. Companies need to better understand their stakeholders and engage proactively on the spectrum of issues they care about. From there, they need to identify issues around which they can build and tell the narrative of the complete value chain.
Trend 2: Waste Leads to Supply Chain Competition
Currently, nearly one billion people are food insecure on a daily basis. However, a significant percentage of food is lost or wasted due to inefficiencies in the global supply chain. We produce more than enough food to feed everyone globally, but distribution is considered inequitable. Addressing “waste” has business saliency as global competition among food and beverage companies increases for raw ingredients, water and arable land. If companies can position themselves as using sustainable business practices, they will have a stronger claim to use more raw ingredients. We predict that more companies will incorporate communicating efficiency and supply chain waste mitigation into discussions of their corporate sustainability practices.
Trend 3: Food as Nourishment
The definition of food insecurity has expanded to include situations where people have access to sufficient calories but insufficient nutrients. This is both a developed and developing world concern as conversation centers around both food deserts and food swamps. It isn’t solely an issue of buying power. It is about what people are buying. Industry analysts understand that growth for most consumer packaged goods companies (CPGs) is through increased market share in emerging markets. Some stakeholders are beginning to accuse global CPGs of dumping unhealthy products that are more challenging to sell for policy reasons in developed markets into developing and emerging markets. The industry will need to carefully communicate growth strategy to stakeholders in a way that demonstrates keen sensitivity to these issues. Further, companies will need to increase communication about the ways they work to provide access to proper nourishment for consumers along its entire value chain, not just through the products they sell.
Trend 4: Epigenetics, Nutrigenomics & Social Justice
There is an emerging understanding of the role of the environment on gene expression, epigenetics and its impact on chronic disease and obesity. Fetal exposure in utero is being studied as an indicator of disease processes or susceptibility later in life. Furthermore, emerging science in nutrigenomics leads some experts to argue that exposure to foods that stimulate addictive behavior in adults while in utero increases the susceptibility to the potentially addictive foods later in life. This is a relatively new way for ethicists to examine the issue of food in relation to social justice. As understanding of this science evolves, some will argue that this gives greater credence to calls for increased regulation around ingredients, processing and labeling because a case can be made that highly processed and unhealthy foods are creating cycles of poverty and disease that begin before we are born. While this is an area of emerging science, companies should pay keen attention.
Trend 5: Use of Issue Advertainment to Sell Food
With 11.4 million YouTube views, the recent Chipotle Scarecrow advertisement about ethically and sustainably raised and sourced chicken is an example of this trend. By communicating these issues in a highly engaging, authentic and entertaining way, a new form of issue advertising has been created. Issue communications were previously used sparingly with consumers, but this is changing. Advocacy communications can be spread more widely and become stickier when they’re “entertaining.” Companies who want to do this will have to determine how to engage with consumers in a way that is authentic with their brand, strikes an appropriate tone on the issue and balances the message’s education and entertainment value. Failure to be effective could result in significant backlash. But the potential benefit is significant to both sales and reputation.
Trend 6: Radical Transparency
The democratization of technology combined with evolving stakeholder expectations has given rise to an age of radical transparency. Companies are disclosing increasing amounts of information at greater granularity. A broader range of critical stakeholders are using this information to evaluate performance. There has been a spate of recent reports that rank company performance on a number of indicators. The Access to Nutrition Index or the Oxfam Behind the Brands reports are recent high profile examples where NGOs are using competition to spur progress on social issues. Publicly held companies are typically at the forefront of increased transparency due to their reporting requirements, though stakeholders expect this same level of transparency from privately held companies as well. This is likely to continue given market interest in Environmental, Social and Governance (ESG) factors, which is not included on Bloomberg terminals, and linking social issues to financial performance, for example the 2012 ”Globesity” analyst report from Bank of America Merrill Lynch.
This isn’t the last time you’ll hear from us on these emerging trends. Expect more commentary in the coming year as we see them come to fruition and gain greater insight into their market impacts.
Best wishes for a happy, healthy and delicious New Year!