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August 23, 2005
Marketing and profit vs. the public good
That's what it comes down to in an illuminating 3-part series the Chicago Tribune wrapped up today. It focuses on the simple, 53-calorie Oreo cookie as a bellwether for the trillion-dollar food industry: How much responsibility does a company owe to its shareholders vs. the overall public good? And do further limits need to be imposed on marketing to children?
With a level compass, the Trib expertly navigates Kraft's desire to make the Oreo a "billion-dollar cookie" and how it spent hundreds of millions of marketing dollars the past 10 years to weave the Oreo into every nook of the lives of children.
While doing that, the obesity rates of American children skyrocketed.
"Sweet tastes make the brain go wild," the Trib quotes one food scientist. We are hard-wired for sweets. Even bacteria swim toward sugar. For a child then, how is free choice even an option?
Some economists like Milton Friedman argue that companies have no business in contributing toward the public good, only toward profits. Friedman's intellect and powers of reasoning are exemplary, but the same can't be said for children. An 8-year-old can hardly be expected to make a reasoned decision that weekly gorging on potentially addictive, calorie-laden food from school vending machines will contribute significantly to her future obesity. That hard-wired purchase decision will, certainly, contribute toward a company's profits.
The free-enterprise argument loses steam as childhood obesity leads to adult obesity, which leads to higher health care costs and lost productivity, which makes us less competitive in the global marketplace. Food companies have, at the very least, an obligation to altogether stop marketing their arguably addictive foods to children for the sake of our collective strategic future.
The Tribune's series is a must-read business case study for anyone involved in the intersection of food, marketing and the public good.
UPDATE: A report (PDF) out today says that the entire nation is getting fatter, except for Oregon; 22.7% of all Americans are now considered obese, up from a previous measure of 22%.
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Meanwhile, the organic food and farm products industries continue to achieve explosive growth rates year after year, and yet it goes unreported in nearly all mainstream business news channels.
It's difficult to imagine a monocrop agribusiness farm having evangelical customers. It's just as difficult to imagine mega food corporations having blogs or any kind of customer evangelism. What would they post about? Which chemicals they experimented with that day?
Smaller scale organic farming and related endeavors are perfect vehicles for word of mouth and customer evangelism. These smaller outfits can really take advantage of the internet in a way industrial agriculture could never do. What's a big industrial cattle process plant going to blog about? Or an industrial farm? "Today we sprayed hundreds of gallons of pesticides..."
I'm totally with you, Michael. I've gone 90+% organic in my food purchases.
I think a monocrop agribusiness farm can have evangelistic customers... perhaps not as many, quantity-wise, as a Starbucks. It depends on their openness to cultivating word of mouth.
For instance, an episode of "The Kitchen Sessions" on PBS featured host Charlie Trotter giving viewers a glowing tour of a specialty farm in Ohio from which he buys many of his herbs.
I think the answer is actually reasonably clear, and the clue is in the word "addictive".
The government has a role to play in regulating and restriction of the distribution of addictive substances that do us harm.
Surely that it is only a matter of time time till there is a groundswell of pressure to address this.
I think the answer is actually reasonably clear, and the clue is in the word "addictive".
The government has a role to play in regulating and restricting the distribution of addictive substances that do us harm.
Surely that it is only a matter of time time till there is a groundswell of pressure to address this.
Yes, but Oreos are SO good! They may have a negative physical impact (if excessively consumed) but they do have a positive emotional or spiritual impact. For example, when I am sad I will often eat a few Oreos with some milk and then feel better!
They not only comfort me because they taste good, but they take my mind of the problems and make me realize that my life isn't so bad after all - in fact there are many good things that even outweigh the bad things. The Oreo shows me that side of life.
I've got to jump in and disagree here - the government doesn't have a role here in protecting "the children" from Oreo cookies. Hello? Parents do! I know several kiddies who get excited about pitas & hummus as a snack - and that's because their parents take the time to ensure that their diet is well-rounded with an absolute minimum of chemical-laden, sugary snacks. What we need, far more than a law to protect the children, is a way to make people think critically and actually take the time and energy to ensure their childrens' health.
I opened up my Podcast list in iTunes hoping to find another funny session on customer evangelism, and instead, I got some big PDA about the food police.
What a waste of my time. Luckily, Apple makes it pretty darn easy to unsubscribe from Podcasts.
Wear your seatbelt, eat healthy foods, do not smoke, do not drink alcohol, wait drink alcohol, it is good for your heart, wait do not drink too much it could be fatal.
This is ridiculous. The government has no business getting into business in the United States of America. It is an infringement on the rights of an industry to regulate it based on the fact that what they sell has more fat in it than some other product. Who do I harm other than myself if I scarf down a bag of Oreos? Personal responsibility can not be legislated. Never has, never will, no matter how hard they try.
Parents bear the responsibility, and as long as our government continues to exhibit the "inability of Americans to act as responsible, individual persons" by enacting absurd legislation such as this, they are telling the citizenry "you are too stupid to know how to run your life, so we will do it for you." Sounds kind of like communism to me.
BTW, my son's favorite "treat" consists of apples and grapes. That is some good in-home marketing if I do say so myself.
Angie and Jacob -- Clearly, children will reflect and follow their parents' eating habits and food choices. No question. However, IMHO, it's the easy availability and preponderance of soda, sweets and unhealthy food in schools that poses the biggest threat to the health of children. There's little or no parental choice in that scenario.
Randy -- We're unable to figure out why iTunes is inserting our blog posts instead of our podcasts into its directory. Let me assure you, it's not on purpose. Judging from the many questions in the FeedBurner forums, it seems we're not alone.
PLEASE I NEED YOU TO FINANCE MY POST GRADUATE DEGREE PROGRAM IN THE UNITED STATES OF AMERICA.I LIVE IN NIGERIA AT THE MOMENT AND I AM JUST JOBLESS .THE ONLY ALTERNATIVE LEFT TO ME IS TO GO BACK TO THE UNIVERSITY SO AS TO UPGRADE MY ACADEMIC PROFILE BTHAN IDLING AWAY.
MAY TE ALMIGTHY GOD BE WITH YOU AND REWARD YOU FOR YOU ALL YOUR CONCERN AND GENEROSITYTOWARDS YOUR FELLOW HUMANS.
I have to partly agree with Jacob. However, it seems very clear to me that we must educate our children about what they eat. We are raising/educating our children for adulthood, might as well, show good habits; and teach them healthy food vs. junk. At the end, they are the ones who will be making the decisions of what they put in their mouth.
In my view health awareness is a key area where visible progress has been made in modern time.
The irony is, though, that Americans have never lived longer than they are right now, but now, today, they've never been fatter. Seems like a ticking time-bomb.
