Coke Tactic: Offer Voluntary Product Reformulation to Avoid Legislation

Today, Pepsi announced it was reducing sugar in its soda. This is an effort to save their dying business, not to confront obesity as their marketing purports. And it’s strategically timed to affect tax legislation being voted on in November in Oakland, San Francisco, and Boulder.

This happened in Berkeley too, where the soda industry made a similar splashy voluntary commitment that grabbed headlines October 2014, just a month before the election.

“The Coca-Cola Company, Dr Pepper Snapple Group, and PepsiCo will leverage their marketing, innovation and distribution strengths to promote smaller-portion sizes, water, and no- and lower-calorie beverage options.”
— Susan Neely, President of American Beverage Association on October 3, 2014

Sound familiar? Eerie.

Reformulation is Designed Avoid Tax Policies

The soda industry’s focus on reformulation is a prominent strategy in the recent #CokeLeak of soda executive emails. Voluntary reformulation replaces policy efforts with the industry’s own “self-regulatory” framework. That’s like letting the wolf guard the henhouse. They have not earned this trust.

A recent example of the success of this “reformulation strategy” is when UK began discussing a soda tax in March 2016 (a proven policy to decrease soda consumption). The soda industry instead stepped in with a voluntary product reformulation strategy to distract from the legislation. They are 100% clear that it’s designed to kill the tax.

“A campaign is underway to build a case against the tax with some promising support among Conservative Party members. The campaign is linked closely with business evolution (pack size, reformulation, marketing), and further reformulation is being discussed to avoid the tax where possible. Options to broaden the affected categories are being discussed if the tax cannot be defeated.”
“Global Government Relations Dashboard” via Michael Goltzman, Coca-Cola (4/4/16)

Governments and media fall for this industry strategy by reframing all solutions to diabetes and obesity within the soda industry’s voluntary promises to do better. The discussion is immediately distracted from the real public health harms, legislative accountability, and proactive policies that could actually slow disease epidemics being caused by industry. Instead, stakeholders and the media begin to congratulate the soda industry on their health consciousness… perpetuating a health halo of Coca-Cola’s image and actually promoting soda sales. All while real consumers suffer.

“Key Element” to Fighting Legislation

Another reformulation “success” found in the #CokeLeak involved a Coca-Cola representative internally describing voluntary calorie commitments as a strategy to fight legislation and increase positive perceptions of Coke.

As anticipated earlier this week, our calorie commitment is the Netherlands is now out and is getting massive media traction locally. It’s a key element in our strategy to fight discriminatory legislation and to improve category perception by taking the lead on innovation, choice, transparency and balanced lifestyles. — Salvatore Gabola, Coca-Cola (6/25/15)

Another example of the reformation strategy in action is when the European Union recently agreed to a “voluntary reduction of added sugar”, which was celebrated internally by the soda industry. They decided to jump on in support.

“UNESDA, the European Soft Drink Association, will participate in an EU multi-stakeholder meeting and announce its support for the EU Framework to reduce added sugars in the public diet across Europe for ALL FOODS & BEVERAGES.
UNESDA will share a statement at the meeting and express its willingness to contribute through multiple actions (reformulation, innovation, offering smaller pack sizes, promoting low-and no cal beverages)”
“Global Government Relations Dashboard” via Michael Goltzman, Coca-Cola (4/4/16)

Because everything always comes back to profits, Coca-Cola says internally that they’ll support UNESDA’s reformulation strategy to make sure it aligns with their “growth strategy” to sell more soda. If you read their press releases, you’d think their first priority for reformulation would be reducing obesity and diabetes, before the growth of the company. But their internal documents demonstrates the priority they place on business growth.

“ Coca-Cola System actively supporting UNESDA in its engagement to ensure that its position aligns with our category growth strategy.
Sophia Chrysopoulou, Coca-Cola Europe (4/13/16)

Next, the EU Commission then held category-specific workshops about the voluntary commitments, in order to provide “guidance to Member States that want to embark on added sugar reduction strategies”.

UNESDA presented these talking points about their voluntary commitments:

· Soft drinks industry understands need for consumers to manage/reduce their calorie-intake (including calories from soft drinks which derive essentially from sugar), but this should be achieved by looking at all available tools (reformulation, innovation, smaller pack sizes) and taking into consideration the diversity of diets and consumption patterns in Europe.
· UNESDA has contributed to this effort through its commitments to the EU Platform and has a.o. achieved an average reduction in calorie content of 11,5% of soft drinks (2013 vs 2000).
· Product formulation needs to take into account technical barriers, consumer acceptance and regulatory hurdles
· UNESDA has been a first mover, wants to continue the journey in partnership with stakeholders at EU and local level.
Wouter Vermeulen, Coca-Cola (3/7/16)

There were only two other presenters, Australia and Romania, presenting to 12 Member States and the Coca-Cola representative bragged about their ability to influence Romania’s presentation:

“Kudos to our local team that has worked behind the scenes to share with the Romanian representative our proof points and messages which made their way into the presentation.”
Wouter Vermeulen, Coca-Cola (3/7/16)

Don’t Fall For Their Distractions

The leaked emails show how strategic and well-orchestrated the soda industry’s policy efforts are timed. The timing of this announcement, just weeks before the election with multiple soda taxes on the ballot, is no accident. It has everything to do with politics.

Sugar mixed with water does not need reformulation, soda has no nutritional value. And neither does low-calorie soda. It’s like a healthier cigarette. The health evidence is clear: people should stop drinking it. Soda companies should stop selling it, not be congratulated for making incremental changes to products that still cause disease.

It’s time for public health to draw a line in the sand: we won’t give the soda industry a health halo with our congratulations.

While Coca-Cola’s products inflict sickness, amputations, and early death on thousands of Americans… the last thing public health advocates should be doing is falling for their self-regulatory distraction strategy. Legislation must stay on the table. We must be holding the soda industry more accountable by expecting a reaction with an equal urgency and impact to the epidemics they cause, not congratulate their incremental steps to keep profits and sell slightly less sugar. It’s just not enough.