Soda companies have some of the most recognizable brands in the world, and are often under fire by public health groups who point to drinking too much of the beverage as a contributing factor to the obesity and diabetes epidemics in the U.S.
The companies that make these drinks, along with tea and juice, say they have already made major changes that they hope will help customers make better choices for themselves, including providing more information to help them determine which drinks have less sugar and fewer calories. They have pushed back on efforts to tax soda and instead advocating for healthier drinks in schools. They took that message to the Obama administration, and say they hope similar opportunities will exist with the Trump administration.
Overseeing many of these efforts is Susan Neely, president and CEO of the American Beverage Association. The trade group has helped set a 10-year agreement among competitors Coke, Dr. Pepper and Pepsi to reduce guide consumers to lower-calorie options, selling drinks in smaller sizes, and putting more no- or low-calorie drinks on the market.
Washington Examiner: Tell us a little bit about your industry and the groups that you represent.
Neely: We are the whole non-alcoholic beverage industry, but we’re better known by our brands. Think Coke, Pepsi, Dr. Pepper, Snapple, Gatorade, Powerade, Lipton’s, water, teas, juices, sports drinks, you name it. Our members will provide it to you.
Washington Examiner: You have several different initiatives that are underway related to nutrition. Can you share some of those details with us?
Neely: This industry has really stepped up. It’s a very unique commitment we’ve made. All these three ferocious competitors — Coke, Dr. Pepper and Pepsi — have agreed to support our consumers in reducing calories and sugar that they consume from beverages. We still want you to have fun with our beverages, we still want you to enjoy anything you want, but what we’re talking about is balance, and really leaning in to showcase the things that allow you to reduce your calories and sugar.
Washington Examiner: What would you say has driven some of these changes? Is it consumers? The industry? The government?
Neely: Consumers rule in the consumer business. You don’t get to be a 100-plus year old brand like all three of them are if you don’t listen to your consumers. We as consumers want health, we want wellness, we want to have fun, but we want balance, and these companies are responding to that in a very, very meaningful way.
Washington Examiner: Under the Obama administration a lot of the companies that you work with voluntarily offered to remove certain beverages from schools. Can you explain what the rationale was behind that decision?
Neely: What we did in schools was to change the beverage mix to offer more lower calorie, smaller portion choices, particularly to our older kids in high school. We really got this insight from moms. I mean all the wisdom comes from moms, let’s just say as a mother, and Mrs. Obama as a mother was great at the helm of this initiative. What we said is that we will, for our younger kids who are middle school and elementary school, offer them fewer choices, just milk, juice, water only. But for our high school kids we’ll remove full-calorie soft drinks and make sure that everything that’s left is either lower or zero calories or capped at a smaller portion size. Punchline: We reduced beverage calories sold in schools by 90 percent. All schools in the country: public, private, K-12. Mom was very happy.
Washington Examiner: Have you taken on other voluntary initiatives?
Neely: Another initiative that we took on, in direct support of Mrs. Obama’s “Let’s Move!” initiative, was to put the calorie label on the front of every can, bottle and pack. So if you look at any of our beverages now, you’ll see very easily in a standardized way how many calories are in that bottle, can or on the front of the pack. That’s just all to help you think, “OK, what’s right for me? Do I want something with more calories? Do I want something with less calories?” So it allows you to be in the driver’s seat, but you can get a little nudge to think about the calories.
Washington Examiner: The idea of making a lot of these changes to products voluntarily might seem counterintuitive or that it’s bad for business. Can you explain the rationale?
Neely: It may seem counterintuitive on the surface, but you don’t get to be some of the most valued brands in the world for over a hundred years if you don’t do more. Our consumers want us to do more. We make great tasting beverages that have calories in them, but we also want to support people in reducing their calories and sugar. So that’s the motivation behind this. We found that consumers take us even more seriously when competitors are working together toward the common goal. Obviously they’re not sharing business strategies, but they’re working together toward the common goal and that just blows consumers away. Everybody knows about the “cola wars.” You’ll hear a mom and a focus group in Des Moines say, “What? Coke, Pepsi and Dr. Pepper and working together? I know they hate each other. They compete so ferociously in the marketplace. If they’re doing this voluntarily to support me as the mom in reducing the calories and sugar that my family consumes, they must mean it.” So it’s a new paradigm for how you get things done, but it’s a very, very effective one.
Washington Examiner: You’ve held other executive roles, including with healthcare groups such as the Association of American Medical Colleges and the Health Insurance Association of America. How do you feel those roles prepared you for the role that you hold now?
Neely: Well, it’s an excellent question because actually health policy and food policy are very close cousins. The beverages we’re offering have to be safe, they have to taste good, they have to meet standards. And so I think all that work with both health providers, as well as health insurers, helped me understand just the policy predicates or what we’re doing here in the beverage industry.
Washington Examiner: Various public health groups have criticized the beverage industry as partially responsible for the high rates of diabetes and obesity in this country. How do you respond to those charges?
Neely: Well, we know obesity is a big problem in this country and we are helping do our part to tackle it. We’re not going to solve obesity, but this being front-footed on helping mom and all consumers reduce the calories and sugar they consume for our beverages will help, so we have a multi-pronged initiative to do that. That’s wrapped around with these little nudges here, that I hope people are seeing on the cooler when they go to make their beverage selection or that they’re seeing it on vending machines, and it says, “Balance what you eat, drink and do.” That’s the nudge to check those calorie labels that we put on the front of cans, bottles and packs and it helps you think about, “Do I want zero calorie to want a few calories? Do I want a treat today?” And so this is part of the initiative that’s a pretty unique and I think powerful one.
Washington Examiner: We’ve talked a lot about some of the voluntary moves that your industry is making in order to reduce calories or change consumer choices or give people more information. One of the moves that certain localities are looking at is the soda tax. The American Beverage Association is opposed to that approach. Can you explain why?
Neely: We think taxes are the wrong approach because consumers don’t want them. Here’s what we hear from moms: “I want support. I don’t need the government telling me what to do. I don’t need beverage companies telling me what to do. I don’t need anybody telling me what to do, what I need is support.” So we think our initiative is the better way. We’re using all of our innovation power, our marketing and distribution power to give mom and all consumers more choices to help reduce those calories and sugar. That’s what we hear over and over. You look at a place like Cook County, Ill., where the tax was in effect for two months, and then it was repealed by a dramatic change in vote. Why? Almost 90 percent of people who live in Cook County hated the tax. They didn’t want it. So I think that’s a fundamental problem with it. Plus, they don’t work as effectively as working with people to make changes in their own behavior.
Washington Examiner: Recently first lady Melania Trump announced that she would be focused on childrens’ well-being as part of her platform, and mentioned physical well-being as an area to work on. Has the American Beverage Association had conversations with the White House about potentially getting involved with this effort, or do you hope that might be a possibility?
Neely: Well, I think it’s excellent. I think having the first lady, the first mother, using her big bully pulpit to talk to families about how to help their kids be healthier. I think that’s fantastic. Mrs. Trump is very classy. She’s very committed to this, and I will use this program to say, “Mrs Trump, we are willing, ready and able. We have a great track record of doing big initiatives together as competitors and we’d love to support your initiative.”
