Salt Sugar Fat (21 page)

Dunn does not see himself as a whistleblower, not like the tobacco industry insiders, anyway, who accused their companies of manipulating nicotine to increase its potency. “I may know more about it than other people,” he says, “but it’s not like there’s a smoking gun. The gun is right there. It’s not hidden. That’s the genius of Coke.”

O
n April 27, 2010, Jeffrey Dunn walked into the Fairmont Hotel in Santa Monica with the blueprints for selling America on a novel snack. He was meeting with three executives from Madison Dearborn Partners, a private equity firm based in Chicago with a wide-ranging portfolio of investments. They had recently hired Dunn to run one of their newest acquisitions—a food producer in the nearby San Joaquin Valley—and had flown out to California to hear his plans for marketing the company’s product.

As they sat in the hotel’s meeting room, however, with the stunning views of the Pacific Ocean just outside, the men from Madison listened to
a pitch like none they’d ever heard before. Dunn was certainly formidable enough for them. His résumé was superb. His twenty years with Coca-Cola had clearly left him with an elite set of marketing skills, and
in his presentation he deployed them all.

He talked about giving the product a personality that was bold, irreverent, confident, clever, and playfully confrontational, with the goal of conveying a promise to consumers: that this was the ultimate snack food. He went into detail on how he would target a special segment of the 146 million Americans who are regular snackers—people, he said, who “keep their snacking ritual fresh by trying a new food product when it catches their attention.”

He helped the investors visualize these people by flashing mock bios up on a screen. The targets were people like Aubree, thirty-four, the on-the-go mom who wants to give her kids “all the fun in the world” and feeds them Oreos, Go-Gurts, and Delmonte fruit packed in syrup; Kristine, twenty-seven, the busy professional who is drawn to Starbucks, trail mix, and the new, dip-ready chip; and college student Josh, twenty-three, on his own for the first time, seeking adventure fueled by Doritos and Mountain Dew Code Red.

He explained how he would deploy strategic storytelling in the ad campaign for this snack, using a key phrase that had been developed with much calculation: “Snack on That.” He had considered other wording, including “Snack That,” and “Snack This,” but adding the word
on
made it more thought-provoking. “It’s language we use in culture for evaluation and reappraisal,” he said. Snack on That, as a marketing tool, would “work harder” for them.

He then went through the details of the proposed product launch, including a media buy with commercials on
House, CSI
, and
Survivor
; a grassroots guerilla PR campaign with the product’s own video game; and digital media with blogger outreach and
seeding
message boards to accelerate the pickup.

Forty-five minutes later, he was done. He clicked off the last slide. “Thank you,” he said.

This was a fairly typical meeting for the executives from Madison, except that Dunn was a cut above the brand managers they were used to having on their side. The rub in the presentation, however, came in the snack that Dunn was now preparing to promote. This wasn’t a new concoction of salt, sugar, and fat whose appeal was well known to these investors. Madison’s $18 billion portfolio had contained the largest Burger King franchise in the world, the Ruth’s Chris Steak House chain, and a processed food maker called Pierre whose lineup includes a champion of handheld convenience, the Jamwich, a peanut butter and jelly contrivance that comes frozen, crustless, and embedded with four kinds of sugars, from dextrose to corn syrup.

The snack that Dunn was proposing to sell: carrots. Plain, fresh carrots. No added sugar. No creamy sauce or dips. No salt. Just baby carrots that are peeled, washed, bagged, and then sold into the deadly dull produce aisle. Carrots were the flip side of Coke. They weren’t selling because of the way they were being sold. To fix this, Dunn said, would require unleashing the proven techniques of processed food marketing.

“We act like a snack, not a vegetable,” he told the investors. “We exploit the rules of junk food to fuel the baby carrot conversation. We are pro–junk food behavior but anti–junk food establishment.”

In describing this new line of work, Dunn would tell me he was doing penance for his years at Coca-Cola—or, as he put it, “I’m paying my karma debt.” That day in Santa Monica, however, the men from Madison were thinking about sales. They had come all the way from Chicago to hear this pitch, and they loved it. They had
already agreed to buy one of the two biggest farm producers of baby carrots in the country, and they’d hired Dunn to run the whole operation. Now, after his pitch, they were relieved. Dunn had figured out that using the industry’s own marketing ploys would work better than anything else. He drew from the bag of tricks that he mastered in his twenty years at Coca-Cola, where he learned one of the most critical rules in processed food: The selling of food matters as much as the food itself. If not more.

A
t 2
P
.
M
. on a Monday afternoon in late February of 1990,
twelve of the most senior Philip Morris executives gathered in a conference room at company headquarters in midtown Manhattan. The austere, gray-granite building stood on Park Avenue, twenty-six stories tall and situated directly across from the main entrance to Grand Central Station, with features that bespoke the company’s affluence. It had underground parking for the executives, a high-ceilinged lobby with art curated by the Whitney Museum, and sweeping views of the New York harbor far to the south. As the operations center for the largest tobacco company in the world, it also had a special accommodation for employees who smoked: Most of the office floors had ceiling fans. The executives met on the top floor, in a space called the Management Room, where six tables had been pushed together to form a large block, with a pad, pen, and water glass placed at each seat. These dozen men formed the brain trust at Philip Morris, and they assembled
like this once a month, in what they called the Corporate Products Committee, to hear from the managers of the company’s most valuable brands.

As usual, the chief executive, Hamish Maxwell, took a seat at the table.
He was joined by two of his predecessors—Joseph Cullman III and George Weissman—who, though now in their seventies, continued to serve as high-level advisers. Cullman, the great-grandson of a German cigar maker, had set the stage for the company’s first diversification beyond tobacco when he bought the Miller Brewing Company back in the late 1960s. Weissman, a two-pack-a-day smoker and one-time reporter for the
Star Ledger
in Newark, New Jersey, had helped develop the masculine image for Marlboro cigarettes and famously said in 1978, when he became the company’s chief executive, “I’m no cowboy and I don’t ride horseback, but I like to think I have the freedom the Marlboro Man exemplifies. He’s the man who doesn’t punch a clock. He’s not computerized. He’s a free spirit.”

This month’s meeting was chaired by one of Maxwell’s direct reports, a fifty-two-year-old Australian-born financial manager named Geoffrey Bible. He wouldn’t take over the chief executive spot himself for another four years, but the job of chairing the meeting rotated among the executives. It was fitting that Bible should take the lead at this particular session, where much of the agenda would be devoted to company products other than cigarettes. Just one month earlier, Maxwell had asked him to immerse himself in—and gain some control over—the newest addition to the company’s roster of consumer goods: the vast and unwieldy division of processed food.

Thanks to its acquisitions of General Foods and Kraft, ten cents of every dollar that Americans spent on groceries now belonged to Philip Morris, which dramatically altered the balance sheets at the tobacco giant. Philip Morris was amassing mountains of cash from its cigarette sales and saw the food business as a way to diversify and put those profits to work.
When it finished merging the two food giants in 1989, their combined annual sales of $23 billion accounted for 51 percent of the total revenue at
Philip Morris. Food had not only become its largest division, the tobacco executives were suddenly also running the largest food company in the country, in charge of icons like Cool Whip, Entenmann’s, Oscar Mayer, Lunchables, Shake ’n Bake, Macaroni & Cheese, Velveeta, Jell-O, Maxwell House, Tang, and the Post cereal lineup of Raisin Bran, Grape-Nuts, and Cocoa Pebbles.

Once tidy and contained, the agendas of these monthly product meetings were now careening wildly through the aisles of the grocery store, and everywhere the Philip Morris executives looked, they saw battles under way with rivals intent on stealing their turf. In getting ready for this particular meeting, the food brand managers had spent days preparing strategy memos, sales charts, and testing reports, but the tone in the room remained low-key and cordial, as always. The Philip Morris executives were seasoned corporate brawlers, supremely confident in their ability to win the loyalty of consumers. The Marlboro brand had been a loser back in the 1940s, pulled from the market and taken for dead, before the Marlboro Man ads started running in the 1960s and turned the cigarette into the country’s—and eventually the world’s—top seller. Geoffrey Bible, moreover, had developed an empathy for the managers in the Kraft General Foods division (whose name was later shortened to Kraft Foods), who were in an endless struggle to fend off their many competitors. He had spent time in the field with their salesmen, and he came away awed by the challenges they faced, from the arduous task of convincing the grocers to give them space on the shelf to creating the emotional lures in their advertising and packaging that, along with the actual formulas, would compel shoppers to pick their products up.

I met Bible in late 2011 in the office he used in Greenwich, Connecticut, after retiring from Philip Morris in 2002. At seventy-three, he was twenty years older than Jeffrey Dunn, the former Coca-Cola executive, but both men had strong handshakes and deep tans and were careful eaters, avoiding too much of the kind of foods and drinks their companies sold. Where Dunn could exude laid-back California and Bible still had
traces of his Australian upbringing, they were also each known to their peers as fierce corporate gut-fighters with an instinct for the jugular and no tolerance for fools.

When Bible took a seat at his desk, the place where he monitors the stock market and engages in varied business activities, one artifact seemed conspicuous in its absence: There was no ashtray. He had smoked as much as a pack a day until 2000, when he stopped on his doctor’s advice. “We were very blessed in tobacco, because we had the biggest brand in the world,” he told me. “The trade was desperate to get our brand. Not the case in food. You were desperate to get
their
business. I was shattered to find the attitude of the buyers in these various grocery chains towards even large companies like Kraft and General Foods. It’s brutal stuff. ‘What are you doing in here? I told you to get out of my office the last time you came. That promotion was a disaster. Get out.’ You’d move from the meat buyer to the mayo buyer, and he’d say the same thing.”

The effort required in marketing food to consumers was, if anything, even more demanding and also very different from tobacco, which was promoted through idealistic imagery like the rugged cowboy in the Marlboro Man commercials.
“Cigarettes are much the same to look at, and their advertising and marketing is much more aspirational than it is for food,” Bible said. “In food you have to really find a way to convey the product better, and its worth. It’s much more, ‘This product is good for you because it has the following ingredients, or it has whatever pizzazz.’ And it’s got to have that product differentiation, that reason to buy it and consume it.”

With these challenges in mind, the Corporate Products Committee on that winter day in 1990 took mere minutes to work through the company’s plans for marketing Marlboros in Hong Kong and the L&M brand in Germany and spent only slightly more time with the new non-returnable 7-ounce bottles that Miller was introducing to the eastern and southern states; they wanted to make sure these regions were considered “strong 7 oz. markets.” The committee then turned its attention to food—specifically, a discussion of one of the most profitable parts of its lineup:
the beverages known as fruit drinks. Consumers were spending nearly $1 billion each year on powdered drinks, and the company’s own Kool-Aid, Country Time, and Tang brands were pulling in an 82 percent share. But as Bible and the other committee members opened their folders to examine the memos and charts that had been prepared on these beverages, the Kool-Aid brand seemed especially vulnerable. Kool-Aid was a throwback to the 1950s, when the flavored drink’s mascot, the smiling pitcher known as Kool-Aid Man, was created by ad execs to battle Coke and Pepsi with his warm and cuddly antics. Now, Kool-Aid looked to be fading fast into that storied history, as determined challengers were vying to shrink its take. It was the committee’s job to keep that from happening, and the Philip Morris executives listened quietly as the managers who ran the Kool-Aid brand presented the first in a series of plans that were breathtaking in both scope and strategy.

The schemes would all share one theme. Where some of these drinks were every bit as sweet as Coke, they wouldn’t be pitched like that, given the public’s increasing concern about its sugar load. In marketing these drinks to kids and their parents, the brand managers now working for Philip Morris would use something else to create allure. They would use fruit, or rather the intimation of fruit, to create an even more powerful image for their drinks: a chimera of health.