Pepsi

Pepsi:

•                 Who's responsible for the obesity epidemic?
•                 What is PepsiCo's new strategy? Do you find it effective? 

                Can PepsiCo and its competitors be socially responsible and profitable

Processed food: food companies can remove the nutrients and vitamins that attract bacteria and fortify food with less attractive ingredients that allow companies to expand their market reach beyond their localized environment.--> approximately half of all the food that US and Canadian citizens eat is processed.

Food industry grow slowly: because caloric consumption is not highly elastic to income level.--> food industry thus has only two options: encourage customers to consume more or increase profit marhins by adding value to existing fooods so that consumers want to pay more.

The production per day of calories is roughly twice the energy needs of the Western population.

Since the price of agricultural commodities tends to fall over time, selling unprocessed or minimally processed food would be less profitable for companies. Thus the companies prefer to process and add value to fruits and vegetables to earn more profit.

Since the producers removed the nutrients in the original raw materials, consumers need to consumer more to make up for the shortfall.

Ecological effects and social and health effects:

Ecological: food and beverage companies are mass users of nitrogen-rich fertilizers and ingredients and products, thereby resulting in dramatic ecological effects.

Social and health costs:

1. food and beverage companies have been able to substantially reduce the costs of processed foods by limiting the ingredients to two primary crops – corn and soy. ( can avoid perishable food)→ social costs: shift away from real food to a system of manufactured food made from low-cost, poor-nutrient ingredients, which led to consumers consume more of the same food to make yo for the shortfall)
2. processed food require systematic chemicals, antibiotics, additives…
3. obesity and overweight problems
4. the food and beverage industry has reduced the diversity of the foods that farmers grow, which also causes negative health effects. (the industry only ship those products that are less perishable and have the longest shelf life.

→ diversity of the food can reduce the likelihood of obesity and diabetes.

Low income consumers and people suffering from financial crisis opt cheaper but less healthier substitutes.

To be social responsible, food and beverage companies has sponsored many events that meant to promote physical activity. However, one cannot combat poor eating habits with physical exercise. The high amount of calories a child consume from a soft drink can noy expended at a sports event sponsored by a beverage company.

Although promised to help to deal with obesity problems, the food companies remain heavily engaged in marketing unhealthy products to children.

With government:

1. The companies spent a lot of money on lobbying to fight against, for example, increased taxes on soft drinks and against public health campaigns, scients who advocate for healthier dicts and legislation to regulate marketing of junk food to children.
2. They also fund studies that result in conclusions that favour the companies.
3. Misleading labeling programs: Companies instituted a very misleading program called Smart Choices, which was said to help consumers find healthier food options. But actually many unhealthy food are branded with the Smart choice logo.

Pepsico:

Human sustainability

1. diversification of products, including fruit juice, nuts and oatmeal. To remedy the perception that all Pepsico’s products are bad for health, the company actquired some other brands which produce healthier food and organic drinks.
2. Responsible marketing: only those products which meet specific nutritional criteria can be targeted to children; offer a portfolio of low calories and nutritious beverage choices.
3. Investment on R&D to develop healthier products

Environmental Sustainability:

Reduction of packaging weight; reduce greenhouse gas emmisons; improve electricity use efficiency and fuel use efficiency.

However, Pepsico’s core business, which was responsible for the negative results, remained and continued to be the most important sector for Pepsico. (fundamental purpose: profit creation)