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March 6, 2013

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March 6, 2013

Attack? Equivocate? Engage? How Big Food responds to a tough new campaign

March 6, 2013
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Chris Jochnick, director of Oxfam America’s Private Sector Department (twitter: @cjochnick), reflects on the different corporate responses to ourchris jochnickBehind the Brands’ campaign launch

Companies have had decades to hone their engagement strategies with activists, but still struggle to find the right approach.  Initial reactions to Oxfam’s Behind the Brand campaign offer an interesting case in point.  The campaign is only a week old, so these are early days – but already we can see certain styles emerging.

Behind the Brands is an aggressive effort to link consumers and the public with their most popular food brands around the enormous environmental and social “footprint” of the food and beverage industry.  The campaign launched last week in countries around the globe with a flagship report, a scorecard (below) ranking the “Big 10” food and beverage companies, an interactive on-line platform to encourage public action, and various “visibility” activities at company headquarters.  Media took notice, with stories in the NY Times, BBC, NPR, Businessweek among dozens of others.  In the first 24 hours, 250,000 people visited the web-page; after a week, 10,000+ have taken some kind of action directed at the companies.

Oxfam was not out to blindside or gratuitously offend. We’ve worked with F&B companies in the past and expect to collaborate in the future.  We spent months consulting with the companies about the Scorecard and let them know in advance what they could expect.

Behind the Brands company scorecardSo how have the companies reacted?  Typical responses to a campaign can be grouped into three categories:  (a) defensive (b) equivocal and (c) engaged.  In this case, we’ve seen evidence of all three.

On the defensive, Associated British Foods, the Scorecard’s worst performer, came out swinging to the Guardian: “The idea that ABF would use a “veil of secrecy” in order to hide the “human cost” of its supply chain is simply ridiculous. We treat local producers, communities and the environment with the utmost respect. As for transparency … our next CR report in autumn 2013 will confirm significant improvement in disclosure.”  Mondelez wasn’t too far behind, issuing a short response and sending police out to greet our pamphleteers.  Only one company – Danone – opted to ignore the campaign completely – a form of passive defensiveness.  These are pretty modest steps (to get a contemporary flavor for what companies are capable of, see this bit about Chevron), but do suggest a path of resistance that will only provide the campaign with grist for escalation.

Most companies have taken an equivocal stand, publicly recognizing the importance of the campaign issues, offering olive branches, and touting their corporate citizenship bone fides.   The official response from Mars is typical: “Mars takes a comprehensive approach to this issue, with a strong focus on the entire farming community specifically in the area of cocoa sustainability. Our leadership has had a positive impact on the women, children and families of smallholder farms. Oxfam highlights important issues in their report and we look forward to working with them to address these critical issues.”  As a first step, equivocating may make most sense.   It avoids any commitment and keeps a door open to engagement.

It is too early to characterize any of the companies as “engaged”, but there are some positive signs (see responses here).  Pepsi’s CEO went out to meet Oxfam pamphleteers at Pepsi headquarters and spent 30 minutes discussing the campaign.  Nestle provided a fairly substantive response and, along with Pepsi and Mars, has been receptive to immediate dialogue.  These are helpful openings.

In the face of protests, companies will often start defensively or equivocally, hoping to wait out a campaign.  Oxfam has found that even companies with visionary leaders, scoring high marks on corporate social responsibility, will often balk reflexively at outside pressure.  Pride, inertia, fear of the unknown may all contribute. We saw it play out with the iconic CSR leader Howard Schultz, who resisted for months Oxfam’s push to dialogue with the Ethiopian government around coffee branding rights, even in the face of media, shareholder, barista, consumer and public pressure.   In conversations with Starbucks executives afterwards, it was evident that their deeply-rooted belief in the “goodness” of the company made it more difficult to “hear” or respond to outside criticism.

Oxfam_Starbucks_Ethiopia_Mar07Companies will also resist campaign demands that require ceding some control.  All of the Big 10 voice support for small farmers and sustainability, and many have good projects in the field.  Companies are responsive to pressure around these projects and will eagerly (necessarily) partner with NGOs.  Campaigns for transparency, due diligence, and worker/stakeholder rights – those issues at the heart of Behind the Brands – are a tougher sell.  Companies are reluctant to identify suppliers, or sourcing volumes or auditing performance; to measure and report on how women and small-holder farmers are faring; or to acknowledge their human rights responsibilities.  But these are the building blocks of real accountability.

Behind the Brands aims to overcome this resistance by strengthening consumer and public voices.  Consumer-facing companies like the Big 10 have to balance accountability concerns with risks to their brands – by far their most valuable asset.  Defensiveness in the face of reasonable public demands will eventually take a toll.  Oxfam knows that many consumers care about where their food comes from; if we can get enough of those consumers to think twice before making choices, companies will have to take notice.

Some company leaders already recognize a business case for treating farmers and planet well.  And they know that transparency in this age is unavoidable.  These companies will see dialogue with credible critical voices as an opportunity.  Oxfam is counting on a handful of these companies to fully engage with the Scorecard – and all the issues underlying it — as a means towards strengthening their brands and business.

4 comments

  1. Along these lines, has anyone read the CSIS report “Our Shared Opportunity A Vision for Global Prosperity” I quote:
    ““The days of the pure pursuit of profit are over. Total, meaningful engagement with society is now essential for long-term sustainability of companies,” E. Neville Isdell, former chairman and CEO.
    *cough*

  2. The overall rating of the 10 companies and the 7 issues feels about right in that Nestle, Unilever, Coca-cola and Pepsico are clearly the companies with the most ambitious approaches to social and environmental issues (as well as being by far the biggest), while the others are in responsive/ compliance mode. Water, transparency, climate and labour standards are fairly mature CSR issues , where land, women in agricultural supply chains and the poverty of the world’s 500 million smallholder farmers are less well charted territory in working out what ‘responsible business practice should mean.

    I do wonder whether a ‘rank ‘em and spank ‘em’ approach is going to drive serious change across this wide basket of complex issues, whether brands respond in the ‘right’ way or not.

    Consumer concern can sometimes jump-start action, but it is not the only business case for CSR, and not always the most important. And getting companies to be more responsible in the name of brand reputation is not the same thing as driving sustainable economic development. I wonder if there is a danger that these lessons from 20 years of CSR experience get lost because of the communications potency of the ‘big bad corporates vs small farmers’ narrative.

    For longstanding CSR issues like labour standards and GHG reporting, once issues get standardized into industry norms, ratings can drive companies to take action to tick the box. But this is not necessarily the same as solving the issue (which often it turns out, for all the advances in measuring, reporting and labelling is not in the immediate power of the company or the consumer).

    I read the report to try to understand the theory of change between pushing good practice by these highly visible companies, and enabling smallholder farmers (most of whom are not in global supply chains) to escape from poverty, or addressing the problem of land grabs and I couldn’t quite find it. Without this I fear that putting all the focus on a top-down brand transparency, CSR-by-numbers approach could reproduce more reporting and statementing, but ultimately not get near the problems.

    If companies set up systems tracking and reporting the number of workers in the supply chain, numbers of women workers, number of smallholder suppliers etc… as well as putting more effort into stating the bleeding obvious (‘Do they recognize the need for responsible management of pesticide use/effective soil management?’) they could move up the chart with without necessarily making any difference in practice.

    Where companies like Nestle and Unilever are doing serious work on integrating small farmers into the supply chain, it is driven more be a need to secure future and growing supply, than because of brand reputation.

  3. Like Maya, I am afraid I found it difficult to see the linkage between good practice in these companies and the linkage with smallholder farmers. You could be a company that performs well on issues of transparency, employment rights, women without engaging (or wanting to engage) with smallholder agriculture, most of whom are not in or likely to be in global/regional supply chains (and may not score well with regard to transparency, women or indeed employment rights). It is one thing to argue that smallholder agriculture is an important part of any programme to reduce poverty (and many decent economists of left and right would argue with you), it is quite another to argue that it is a corporate responsibility to incorporate smallholder farmers into supply chains and if they do not they should be campaigned against? Why?

  4. With this in mind, please can someone explain to me again why we’re STILL expected to boycott Nestle? Surely we should be cutting them some slack if they’re improving and shifting to someone else?

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