Search results: the corporation not me

Nestlé (the corporation, not me) is moving its Healthy Kids Program to China, and intends to put the program into every country in which it operates by the end of 2011.

The program “aims to improve the nutrition, health and wellness of children aged 6-12 years old by promoting nutrition education, balanced diet, greater physical activity and a healthy lifestyle.”

Nestlé believes that education is the single most powerful tool for ensuring that children understand the value of nutrition and physical activity to their health through the course of their lives. As a Council member of the Chinese Nutrition Society, Nestlé is indeed honoured to work together with the authorities and several other organizations to promote nutrition awareness and health education for the Chinese children.

Want to make some guesses about what this program will say about nutrition?  Note yesterday’s post.  Probiotics in juice drink straws, anyone?

One clue comes from that barge loaded with food products that Nestle is sending up the Amazon into the Brazilian outback: The vessel will carry 300 different goods including chocolate, yogurt, ice cream and juices.”

While I’m on the subject of the FTC (see yesterday’s post), let’s congratulate the agency for going after the Nestlé (no relation) corporation for marketing a product aimed at kids with misleading, deceptive, and—according to the FDA—illegal health claims.  The FTC settlement announcement says that

from fall 2008 to fall 2009, Nestlé HealthCare Nutrition, Inc. made deceptive claims in television, magazine, and print ads that BOOST Kid Essentials prevents upper respiratory tract infections in children, protects against colds and flu by strengthening the immune system, and reduces absences from daycare or school due to illness.

Nestlé must have introduced this product in 2008 because bloggers (of the sponsored kind) were promoting its benefits in September that year.  One said:

BOOST Kid Essentials is a nutritionally complete drink intended for children ages 1 to 13.  The probiotics in BOOST Kid Essentials are embedded in a straw that comes with the drink, which was prominently featured in ads for the product.  Probiotics are live, beneficial bacteria that are found naturally in many foods, and they are known for aiding digestion and fighting harmful bacteria.

This blogger’s enthusiasm for the product—“parenting solved”—quotes two studies, one done with adults using the straw and another with kids in day care whose infant formula was supplemented with one of the bacteria used in the adult study.  Both studies look preliminary to me, as they must have to the FTC.

In February 2009, in what reads like a company advertisement, another (sponsored) blogger wrote:

BOOST Kid Essentials Drink is the only nutritionally complete drink that provides kids ages 1 through 13 with immune-strengthening probiotics plus complete, balanced nutrition. Just one daily serving of the probiotic found in the BOOST Kid Essentials Drink straw has been clinically shown to help strengthen the immune system. BOOST Kid Essentials Drink is perfect for children who are below growth percentiles, having trouble gaining weight, resisting eating enough nutritious foods, or needing extra nutrition to help maintain an active lifestyle.

But in December 2009, the FDA  issued a letter to the company warning it that it was marketing this product as a drug:

this product is misbranded under…the Federal Food, Drug, and Cosmetic Act… because the label is false or misleading in that the product is labeled and marketed as a medical food but does not meet the statutory definition of a medical food in the Orphan Drug Act…Furthermore, this product is promoted for conditions that cause it to be a drug under section 201(g)(1)(B) of the Act…The therapeutic claims on your website establish that this product is a drug because it is intended for use in the cure, mitigation, treatment, or prevention of disease.

The warning letter didn’t get into the business of whether probiotics really do any good (the European Food Safety Authority certainly doesn’t think so) or whether “healthy” bacteria stay live and active in a straw stuck in the packaging of a kids’ drink.  The company must not have wanted to get into all that, so it settled.  The probiotic straw no longer comes with the package.

Nestlé is the largest food company in the world with earnings that exceed $100 billion annually.  It should have known better.

Update, July 15: Since the FTC imposed no penalties on Nestlé,  analysts expect class action lawsuits to follow in due course.  And here’s the account in the New York Times (I’m quoted).

On a tour arranged and paid for by the Alaskan Seafood Marketing Institute (see Note below),  I spent last week observing salmon fishing and processing in Anchorage and at remote places 600 miles to the southwest.

I could not help thinking about federal dietary guidelines.  The 2010 Dietary Guidelines Advisory Committee has just filed its report.  It recommends consuming two 4-ounce servings of seafood per week, preferably fatty fish rich in omega-3 fatty acids.

Develop safe, effective, and sustainable practices to expand aquaculture and increase the availability of seafood to all segments of the population. Enhance access to… information that helps consumers make informed seafood choices.

This, among other fish, means salmon, particularly wild Alaskan salmon because they have higher levels of omega-3 fats than the farmed fish and because Alaska is working hard to maintain the sustainability of its wild fish.

Wild Alaskan salmon caught 6-19-10. Top to bottom: King (Chinook), Red (Sockeye), Chum (Keta), Pink

To be sustainable, fish have to remain in the sea and steams long enough to reproduce. This means controlling the number of people who are allowed to catch fish (through licenses and permits) as well as the number of fish they catch (through restrictions on fishing methods and times and places).

The Alaskan system for doing this works fairly well but is under constant pressure.  Commercial fishers want to be able to catch all the salmon they can with no restrictions. Communities that have always depended on salmon for sustenance want to be able to continue doing so, and do not want fish caught before they get to community spawning streams.  Hence: salmon politics.

Here are some thoughts about what I observed:

Labor conditions in the processing plants: workers were imported from the Philippines or Eastern Europe, and worked 12 to 16 hour days, 6 or 7 days a week, for months at a time.

The amount of hand labor involved: Fishermen haul nets and sort fish by hand, and processing plant workers remove heads and guts, fillet fish, trip fillets, and debone by hand. In canneries, they weigh cans and clean the contents by hand. Some of this work is highly skilled and so meticulously done that it qualifies as artisanal. All of it is hard and repetitive

Peter Pan salmon cannery, King Cove, Alaska, 6-20-10

The huge numbers of fish that can be caught by commercial fishers: Alaska regulates how fish can be caught (boat size, types of nets), but even so a purse seine picks up thousands of pounds of fish at one time. It is hard to imagine how such fisheries can be sustainable, even when tightly regulated.

Purse seine bringing in the catch

The waste in the system: Some plants had arrangements to supply fish heads, guts, backbones, belly fat, skin, tails, and other parts to be used for pet food or fish meal, but some just ground up the leftovers and flushed them into the water system or back into the ocean. If the wrong fish get into nets, they get tossed back into the sea.

The cold chain (temperature controls): fish stay fresher longer if they are held temperatures just above freezing throughout every step of processing. The tenders (collecting boats) do “RSW,” hold fish in a tank filled with Refrigerated Sea Water. High quality fish are sampled at arrival at plants to make sure their flesh is below 35 degrees. Two of the three plants we visited were careful with temperature controls. The third, however, allowed fish to sit in holding tanks for days or to remain on stopped processing lines at room temperature while workers went to lunch.

The role of science: Geneticists are madly working on methods to identify salmon by stream of origin as a means to settle arguments about who gets to catch which fish. This, of course, could backfire if the salmon turn out to be from Russia or Canada.

The love of fishermen for what they do: The ones we met love their work and have been doing it for decades. They just wish they got treated better by processors and paid better for the fish they catch.

As fish eaters, we don’t need to consider where fish comes from or how it gets to us. I will be looking at fresh, frozen, and canned salmon in grocery stores and fish markets with new appreciation for what it takes to get them to us.

I haven’t said anything about methylmercury and PCBs, fish safety, international disputes over fishing rights, or issues about organic or farmed fish. For these topics, see the five chapters on fish in What to Eat.

If we want to continue to have fish to eat, we must pay attention to such issues, uncomfortable as they may be to contemplate.

Note: The Alaskan Seafood Marketing Institute is a trade association supported by the seafood processing industry:

The Alaska Seafood Marketing Institute (ASMI) was created over twenty years ago as a cooperative partnership between the Alaska seafood industry and state government to advance the mutually beneficial goal of a stable seafood industry in Alaska. It is Alaska’s “official seafood marketing agency”, and is established under state law as a public corporation…[It] is divided into three distinct marketing programs: international, foodservice and retail. All three programs are designed to enhance the appeal and popularity of Alaska Seafood. The international program operates in the European Union, China, and Japan, while the retail and foodservice programs conduct their activities in the U.S.

One point of the Alaskan Seafood Marketing Institute’s invitation to visit remote fishing and processing operations was to publicize the state’s fish sustainability initiatives (see Note below).

Everyone wants to catch fish.  But who has the right to catch them?  Fish swim long distances and pay little attention to political borders.  The commercial fishing industry is highly efficient at using technology to catch fish (the fish hardly have a chance).  And cultural issues are involved, as well as economic issues.  Indigenous communities have long standing cultural traditions related to fish.

Fish stocks are not infinite.   Hence, the need for management.

In Alaska, fisheries management is so complex that it takes a chart to explain how it works.  The goal is to have enough seafood available so all the stakeholders in the fish system can make a living.  Salmon, groundfish, halibut, and crab each require a different agency to manage stock conservation, set policy (local, national, and international) for who is entitled to fish, and enforce the rules.

For example, the Alaska Department of Fish and Game regulates the amounts of fish that can be taken, the Alaska Board of Fisheries decides who gets permits to fish, and Alaska Wildlife Troopers make sure everyone follows the rules.

The main management tools limit the time and place where fishing is allowed, and limit the number of commercial groups allowed to fish.  Alaskan fisheries are closed unless the Department of Fish and Game says they are open.   Nobody can fish in a closed area.

The number of fishing permits is fixed and finite, making them a market-driven commodity.  They are often handed down from generation to generation, but also can be sold.   A king salmon permit, for example, might cost as much as half a million dollars.  Yes, this allows rich commercial fishers to work in Alaskan waters.  But fishing area controls are democratic.  A closed fishing area is closed to rich and poor alike.

This system creates some tricky situations.  On the day we observed fishing in action near Sand Point, the area was open to salmon fishing. But it was closed to cod fishing.

Catch from a purse seine, Shumagen Islands, Alaska, June 2010

The boat shown here was out salmon fishing.  It caught salmon, but also picked up an almost equal number of cod (we were told this was highly unusual).

The salmon would go to the cannery to be processed.  The best salmon would be processed with special care by Aleutia, an organization specializing in high quality Alaskan wild salmon getting high prices for fishermen.

The salmon were caught legally.  The cod, however, were by-catch.  They were not supposed to be caught in the salmon nets or, for that matter, at all that day.

What happened to the caught cod?  We ate one of them for dinner that night, prepared for us by Michael Cimarusti, chef owner of Providence (Los Angeles), who conveniently was a member of our group. It was worth the trip.

The others went for personal use or were thrown back into the sea to become food for crab or other seafood.  Under the rules, they could not be sold.

Does this complicated management system work?  It looked to me like it does the job pretty well.

• Stocks of major Alaskan seafood—salmon, groundfish, halibut, and crab—are holding their own.
• Everybody who fishes or depends on fish complains that they don’t get the chance to get enough of their fish.

Now, if only this system could go international, we might have a shot at keeping fish in the sea.

Tomorrow: Wild Alaskan salmon, from ocean to table.

Note: The Alaskan Seafood Marketing Institute is a trade association for seafood processors::

The Alaska Seafood Marketing Institute (ASMI) was created over twenty years ago as a cooperative partnership between the Alaska seafood industry and state government to advance the mutually beneficial goal of a stable seafood industry in Alaska. It is Alaska’s “official seafood marketing agency”, and is established under state law as a public corporation…[It] is divided into three distinct marketing programs: international, foodservice and retail. All three programs are designed to enhance the appeal and popularity of Alaska Seafood. The international program operates in the European Union, China, and Japan, while the retail and foodservice programs conduct their activities in the U.S.

I’m writing this while on an Alaskan Seafood Marketing Institute press trip (see note at end).  We are at Sand Point, Popof Island, Shumagin Islands, Alaska, about halfway out the mainland part of the Aleutian archipelago.  Sand Point is the largest town around, population 800 to 1000.

The town has a grocery store, coffee shop, bar, cafe, and a Chinese restaurant (the Aleut China), but centers around a seafood processing plant run by Seattle-based Trident Seafoods.

The fish arrive at the plant from “tenders,” fishing boats that collect fish caught by other boats, weigh the fish, and store them in ice cold sea water until they reach the plant.

Workers at the plant eviscerate the fish, clean them, and cut them into clean fillets.  These will go to Costco and Sams’ Clubs (Walmart) in the lower 48.

Trimming Halibut, Trident plant, Sand Point, AK, 6-18-10

The men and women doing this work are mostly seasonal workers from the Philippines.  They work 12 to 16 hour days, 6 or 7 days a week.

Several people who have lived here all their lives told us that when they were kids, they could hardly wait until they were 16 so they could work in the cannery.  They made good money.

When Trident came in, the company lowered the wages to minimum or just above, discouraged locals from working there, and outsourced the labor.

The company also reduced the price it paid for fish  from just over $2 per pound in the late 1980s to today’s just over $1.

If I remember correctly, wild Alaskan salmon costs nearly $30 per pound in New York City grocery stores.

The fishermen aren’t getting much of that.  The people who work in the processing plant aren’t either.

We met people here who are trying to help the fishers get more money for their work.  We haven’t met anyone lobbying for higher wages for workers in the processing plant.

The rationale?  Fish come in seasonally when they can be caught.  They have to be processed as soon as they come in.  If the workers were paid more, the wild fish would be so expensive that nobody could afford to buy them (and everyone would turn to farmed salmon).

I will be thinking about all this the next time I’m in a Costco or read about recommendations in the dietary guidelines to eat more fish.

I needed five chapters to talk about issues related to fish in What to Eat. I will have more to say about Alaskan fish politics in the next two posts.  Stay tuned.

Note: the Alaskan Seafood Marketing Institute is a trade association paid for by seafood processors::

The Alaska Seafood Marketing Institute (ASMI) was created over twenty years ago as a cooperative partnership between the Alaska seafood industry and state government to advance the mutually beneficial goal of a stable seafood industry in Alaska. It is Alaska’s “official seafood marketing agency”, and is established under state law as a public corporation…[It] is divided into three distinct marketing programs: international, foodservice and retail. All three programs are designed to enhance the appeal and popularity of Alaska Seafood. The international program operates in the European Union, China, and Japan, while the retail and foodservice programs conduct their activities in the U.S.

In the latest issue of the American Journal of Public Health, Derek Yach and his colleagues at PepsiCo in Purchase, NY, say yes, it can, in answer to the question they pose in their article, “Can the food industry help tackle the growing global burden of undernutrition?”

If we are to successfully combat global undernutrition, efforts must be sustained by multiple stakeholders from various sectors. We believe that trust is built through industry’s demonstration of practical actions that improve health, and recognition of these actions by governments and nongovernmental organizations. Only through new and innovative public–private sector partnerships can we truly make a difference.

Three international public health leaders counter with no, it can’t, in an article entitled “The snack attack.”  They point to irreconcilable differences between the the goals of private industry and public health:

The problem lies with food, drink, and associated companies whose profits depend on products that damage public health and that also have damaging social, economic, and environmental impacts. These most of all include transnational companies, of which PepsiCo is one. To succeed, big business must sustain and increase annual turnover, profit, and share price…We suggest that public health professionals see papers such as those of Yach et al. as part of the marketing strategies of transnational food and drink companies…The privatization of public health does not work.

This argument reminds me of the editorial that David Ludwig and I wrote for JAMA late in 2008: “Can the food industry play a constructive role in the obesity epidemic?”  We concluded:

With respect to obesity, the food industry has acted at times constructively, at times outrageously. But inferences from any one action miss a fundamental point: in a market-driven economy, industry tends to act opportunistically in the interests of maximizing profit. Problems arise when society fails to perceive this situation accurately.

While visionary CEOs and enlightened food company cultures may exist, society cannot depend on them to address obesity voluntarily, any more than it can base national strategies to reduce highway fatalities and global warming solely on the goodwill of the automobile industry. Rather, appropriate checks and balances are needed to align the financial interests of the food industry with the goals of public health.

PepsiCo owns Pepsi Cola, of course, but also Gatorade, Frito-Lay snacks, and Aquafina water, among many other brands.  According to Advertising Age (June 22, 2009), PepsiCo earned $43 billion in worldwide sales in 2008. Its product-specific advertising expenditures in 2008, just for “measured media” (meaning run through advertising agencies) were, for example:

• $162 million for Gatorade
• $145 million for Pepsi Cola
• $27 million for Tostitos
• $14 million for Doritos
• $11 million for Fritos.

These figures, staggering as they may be, do not include the amounts Pepsi spends on lobbying, supporting the American Beverage Association’s efforts to fight soda taxes, funding medical research at Yale, or marketing to children and adults in India and other developing countries, as previously discussed on this site.

Is corporate “social responsibility” really responsible?  Or is it just marketing?  And what should be the checks and balances?  You decide.

Added April 17: This comes from a former employee of PepsiCo who asks that I post this anonymously:

I think you probably know that the “marketing dollars,” the share (ads/direct marketing), of companies like Pepsico are only a fraction of what are their actually marketing/promotions budgets.  Many years ago, PepsiCo made a conscious effort to redefine/shift budgets to what is called promotional spending from traditional marketing spending.  In doing so though, they keep the control and allocation of the funds in the hands of the marketing teams.

For Pepsi I know that the $145 million you mention is probably only 25% of what Pepsi “internally” considers consumer marketing spending.  For example, direct to retails “incentive” bonus funds are given for moving volume — those funds are almost entirely funneled into the retails increasing consumer marketing to their direct customers.  There are even examples where they can hide 10’s of millions of dollars at a time by linking event sponsorships (stadiums, etc.) to retailer agreements, thus moving those dollars to long-term “capital expenditures.”  I would guess that for Pepsi alone that that $145 million could be as much as a billion a year for direct and indirect consumer marketing spending.

It is not just obscene how much gets spent to increase volume… since, for companies like PepsiCo, Coke, etc.  Volume is the only way they generate higher profit to their shareholders.  As you say, to expect a corporation to do things for the good of the consumer just shows a misunderstanding of their primary function when they are a for-profit entity.

For reasons that make no sense to me at all, corporations are not allowed to simply make a profit.  Their profits must constantly increase.  They must report growth in profits to Wall Street every 90 days.

For food companies, this is not so easy.  We already have twice as many calories available in the food supply as needed by our population –  nearly 4,000 calories per capita per day.  How to deal with this?  Find new buyers.

General Mills says its “recipe for profitable growth” will target three specific groups: Hispanics, aging baby boomers (those aged 55 and over), and millennials (baby boomers’ kids aged 16-33).  General Mills owns cereals and fruit roll-ups, among other such products.

According to MinnPost.com, General Mills is now the leading advertiser in U.S. Hispanic media.

But General Mills expects most of its growth to come from emerging markets like China.  Sales in China tripled from 2005 to 2009 and are expect to reach $900 million by 2015. Sales of General Mills’ Häagen-Dazs* ice cream are booming in China.

Isn’t it fun to be a target of General Mills’ growth strategies?  I assume all major food companies have their eyes on the same target.

*Factoid footnote: Nestlé owns Häagen-Dazs in the U.S. and Canada.  General Mills owns the brand everywhere else, including in China.

I greatly admire the work of Jared Diamond.  His book, Guns, Germs, and Steel: The Fate of Human Societies, is as clear an explanation as you will ever get of how the inequitable distribution of favorable geography, climate, and natural resources affects the development and maintenance of human societies.

But here he is, incredibly, in the Sunday New York Times writing a fan letter to corporate social responsibility for protecting those favorable environments.  He writes:

There is a widespread view, particularly among environmentalists and liberals, that big businesses are environmentally destructive, greedy, evil and driven by short-term profits. I know — because I used to share that view.  But today I have more nuanced feelings…I’ve discovered that while some businesses are indeed as destructive as many suspect, others are among the world’s strongest positive forces for environmental sustainability.

And which corporations does he include as “strongest positive forces?”  Chevron, Walmart, and Coca-Cola.   I’ll leave discussion of Chevron and Walmart to others, but Coca-Cola?

Coca-Cola, Diamond says, is protecting the world’s water supplies.  The company needs clean water in the 200 countries in which it operates.  This, says Diamond:

compels it to be deeply concerned with problems of water scarcity, energy, climate change and agriculture. One company goal is to make its plants water-neutral, returning to the environment water in quantities equal to the amount used in beverages and their production. Another goal is to work on the conservation of seven of the world’s river basins, including the Rio Grande, Yangtze, Mekong and Danube — all of them sites of major environmental concerns besides supplying water for Coca-Cola. These long-term goals are in addition to Coca-Cola’s short-term cost-saving environmental practices, like recycling plastic bottles, replacing petroleum-based plastic in bottles with organic material, reducing energy consumption and increasing sales volume while decreasing water use.

Please note the future tense.  These are things Coke says it plans to do.  As for what the company is doing now, Diamond does not say.  His piece does not mention Coke’s negotiating with officials in developing countries to buy water at rates significantly below those charged to local communities, a topic under much discussion when I was in India last year.  It does not mention campaigns in India to hold Coke accountable for its abuse of local water rights or any of the similar campaigns in other countries.

Diamond’s piece does not talk about the efforts Coke puts into selling bottled water at the expense of local water supplies.  As described by Elizabeth Royte in her book, Bottlemania, companies like Coke exhibit every one of of the characteristics formerly deplored by Diamond in attempting to secure plentiful and reliable sources of cheap local water: in his words, “environmentally destructive, greedy, evil and driven by short-term profits.”

Diamond says he sits along side and has gotten to know and appreciate the motives of many corporate executives.  Me too.  Personally, many of them mean well and wish that they could do more to be socially responsible.  But they work for businesses that are required, by law, to make short-term profit their reason for existence.  This means that corporate social responsibility is necessarily limited to actions that bring visible – and immediate – returns on investment.

We need some critical thinking here.  If Diamond gave any thought at all to what Coca-Cola produces – bottled water and sodas – he would surely have to agree that less of both would be good for our own health and that of the planet.