Salt Sugar Fat (56 page)

  
98
John Harvey Kellogg
“J. H. Kellogg Dies; Health Expert, 91,”
New York Times
, December 16, 1943; “Dr. John Harvey Kellogg,” Battle Creek Historical Society; Dr. John Harvey Kellogg, “The Simple Life in a Nutshell,” available from
Lifestylelaboratory.com
; John Kellogg,
The Living Temple
(Battle Creek, MI: Good Health Publishing, 1903); Bruce,
Cerealizing America
; “One Hundred Years: An Overview,” Kellogg Company.

  
99
a younger brother named Will
“Our Founder,” W. K. Kellogg Foundation; “Our History,” Kellogg Company; “The Good Old Days,”
Promo Magazine
, September 1, 2003; Rachel Epstein,
W. K. Kellogg: Generous Genius
(Danbury, CT: Children’s Press, 2000); “A ‘Flakey’ Patent Case,”
Stereoscope
, Historical Society of the U.S. District Court for the Western District of Michigan, vol. 1, no. 3 (Fall 2003).

100
a marketing whiz
Kraft spun off the Post cereals brand in 2007 in a merger with Ralcorp Holdings, and in 2011 Ralcorp spun off Post Foods into a company. “Post Heritage,” Post Foods Company, Battle Creek, Michigan; Bruce,
Cerealizing America
; Nancy Rubin Stuart,
American Empress: The Life and Times of Marjorie Merriweather Post
(Bloomington, IN: iUniverse, 2004).

101
Collier’s
magazine accused
Bruce,
Cerealizing America
.

102
By 1970, the Big Three
Corts,
Ready-to-Eat Breakfast Cereal Industry
.

103
they so completely controlled
“Not Enough Competition in Cereal Industry, Report Says,” Associated Press, October 2, 1980; “Cerealmakers Call Federal Study ‘Inadequate,’ ” Associated Press, February 13, 1980; “Bill Could Cripple FTC’s Case on Cereal Companies,”
Washington Post
, March 5, 1981, F. M. Scherer, “The Welfare Economics of Product Variety: An Application to the Ready-to-Eat Cereals Industry,”
Journal of Industrial Economics
(December 1979).

104
An enterprising dentist
Ira Shannon, “Sucrose and Glucose in Dry Breakfast Cereals,”
Journal of Dentistry for Children
(September–October 1974). This study by Shannon, an Air Force dentist, generated newspaper articles throughout the country. See, for example, “Sugar in Breakfast Cereal,”
Chicago Tribune
, October 30, 1977. He later wrote a book on his expanded research: Ira Shannon,
The Brand Name Guide to Sugar: Sucrose Content of Over 1,000 Common Foods and Beverages
(Chicago: Nelson-Hall, 1977).

105
what made Mayer an industry threat
Jean Mayer, “Obesity: Physiologic Considerations,”
American Journal of Clinical Nutrition
9 (September–October 1961); “How to Eat Right and Live Longer,”
U.S. News & World Report
, August 9, 1976; “Jean Mayer; Tufts Chancellor, Adviser on U.S. Nutrition,”
Los Angeles Times
, January 3, 1993.

106
“I contend that these cereals”
Jean Mayer, “Sweet Cereals Raise Labeling Issue,”
Chicago Tribune–New
York News Syndicate, December 17, 1975.

107
Sugar took center stage
Marian Burros, “And Now a Word from Industry,”
The Washington Post
, October 20, 1977.

108
“We never said”
Ibid.

109
The battle in Washington
Arthur Applbaum, “Mike Pertschuk and the Federal Trade Commission,” John F. Kennedy School of Government, Harvard University, 1981; Arthur Applbaum, “Mike Pertschuk and the Federal Trade Commission: Sequel,” John F. Kennedy School of Government, Harvard University, 1981; Howard Beales, “Advertising to Kids and the FTC: A Regulatory Retrospective that Advises the Present,” Federal Trade Commission, speeches.

110
“As with cigarette advertising”
Applbaum, “Mike Pertschuk and the Federal Trade Commission.”

111
“If you take on the advertisers”
Ibid.

112
formidable team of lobbyists
Ibid.

113
Until then, the editorial board
“The FTC as National Nanny,”
The Washington Post
, March 1, 1976.

114
Thirty-five years later
“A Ban Too Far,”
The New York Times
, May 31, 2012.

115
the FTC itself nearly capsized
“Curbing the FTC,”
The MacNeil/Lehrer Report
, March 18, 1982; “FTC Ends Consideration of Rule on TV Ads for Children,” Associated Press, September 30, 1981; “Regulating the FTC,”
Newsweek
, October 15, 1979.

116
“It became a pivotal moment”
Bruce Silverglade to author.

117
“They have suppressed”
“Pertschuk Exits FTC with Guns Blazing,”
The Washington Post
, September 26, 1984.

118
“I don’t make any bones”
Ibid.; “New Head at FTC, New Era for Kid Ads,”
The Washington Post
, October 1, 1981; “FTC Chief Changes Role of ‘Nation’s Nanny,’ ”
Christian Science Monitor
, December 6, 1983.

119
The report ran 340 pages
“FTC Staff Report on Television Advertising to Children,” Federal Trade Commission, February 1978.

120
Dubbed “kidvid”
Jane Brody, “Personal Health,”
New York Times
, March 13, 1985; Dale Kunkel and Walter Gantz, “Assessing Compliance with Industry Self-Regulation of Television Advertising to Children,”
Journal of Applied Communication Research
2 (1993).

121
“It’s a marketing tool”
Lisa Belkin, “Food Labels: How Much They Do, And Don’t, Say,”
The New York Times
, September 18, 1985.

122
They began selling
Corts,
Ready-to-Eat Breakfast Cereal Industry
; “The Battle for the Cereal Bowl,”
Food Processing
, 2009; “Topher’s Breakfast Cereal Character Guide,” Topher’s Castle,
LavaSurfer.com
, 1998; “1991 Food Processor of the Year: General Mills,”
Prepared Foods
, September 1, 1991; Li Li et al., “The Breakfast Cereal Industry,” Cornell University, April 20, 2011.

123
General Mills broke
Corts,
Ready-to-Eat Breakfast Cereal Industry
.

124
“Sanger pushed”
Fingerman to author.

125
General Mills jumped out
“Repositioning Cereals as Snacks?”
Brand-Packaging
, March 2000.

126
“Getting a 0.5 percent share”
Karen Hoggan, “Kellogg, a Cereal Killing?”
Marketing
, October 31, 1991.

127
These rules, at one time
Bruce,
Cerealizing America
.

128
“You know how”
Edward Martin to author.

129
Launched in 1993
Corts,
Ready-to-Eat Breakfast Cereal Industry
.

130
advertising specialists from Leo Burnett
George Lazarus, “Burnett Drama Still a ‘How Done It?’ ”
Chicago Tribune
, March 28, 1997; “Leo Burnett USA: The Most Effective Agency in America,”
Market Wire
, June 8, 2007.

131
“When you pour”
Case No. 4453, Children’s Advertising Review Unit, Council of Better Business Bureaus, February 14, 2006.

132
“I was used to cooking”
William Thilly to author.

133
Jenness was no ordinary
“Clients Talk about Burnett,”
Advertising Age
, July 31, 1995; “Former Ad Exec to Run Kellogg,”
Chicago Tribune
, November 30, 2004; “Getting Settled in Battle Creek,”
Grand Rapid Press
, December 26, 2004.

134
“With the game we’re in”
Jenny Rode, “Aggressive But Steady Sells the Cereal,”
Battle Creek Enquirer
, March 7, 2006.

135
Post had reversed
Details on this advertising campaign are disclosed in the case study Kraft and its advertising agency submitted to the Effie Awards in 2006.

136
In an analysis
Likewise, Kellogg discussed its strategy in a 2007 submission to the Effie Awards for its Frosted Mini-Wheats campaign.

137
“Help your kids earn an A”
Kellogg announcement, March 12, 2008, included as exhibit in FTC complaint against Kellogg.

138
The scene was a classroom
FTC complaint against Kellogg, July 27, 2009.

139
These were the findings
Ibid.

140
plodded for more than a year
The FTC told me it needed the time to investigate and handle the case, and that its actions were prudent, given the agency’s limited powers. “While many companies will voluntarily choose to stop running ads during the pendency of an investigation, the FTC has no legal basis to demand that they do so,” Mary Engle, director of the agency’s Division of Advertising Practices in the Bureau of Consumer Protection, said in an email. “And, of course, in most instances a company will strongly defend its advertising, and persuading it to sign a settlement can be difficult. We typically only seek preliminary relief from the federal courts in cases we view as clear-cut fraud. Otherwise, negotiating a consent order under which the company agrees to stop making the challenged claims is the most efficient way to proceed.”

141
A resounding 51 percent
Case No. 4866, National Advertising Division, Council of Better Business Bureaus, June 17, 2008.

142
“We were always”
Jeffrey Dunn to author.

143
“There will never be”
Constance L. Hays,
The Real Thing: Truth and Power at the Coca-Cola Company
(New York: Random House, 2004).

144
The man who instilled
Ibid.

145
“The story they always tell”
Jeffrey Dunn to author.

146
By 1995, two in three kids
Soda consumption rates are parsed in various ways. U.S. Secretary of Agriculture Dan Glickman, at the October 1998 symposium “Childhood Obesity: Causes and Prevention,” stated that two-thirds of teenage boys were drinking three cans or more of soda a day, and two-thirds of girls were drinking two cans a day.

147
They talked about “heavy users”
Jeffrey Dunn to author.

148
Dunn rose nearly to the top
Jim Lovel, “Coke’s a Big Part of His Life,”
Atlanta Business Chronicle
, November 19, 2001.

149
“At Coke, I do think”
Jeffrey Dunn to author.

150
He was put in charge
“Former Coke Executive Walter Dunn Dead at 86,”
Atlanta Business Chronicle
, June 22, 2009.

151
“He took his job very seriously”
Jeffrey Dunn to author.

152
“He was up in first class”
Ibid.

153
PepsiCo pulled off
Roger Enrico and Jesse Kornbluth,
The Other Guy Blinked: How Pepsi Won the Cola Wars
(New York: Bantam Books, 1986).

154
was 4 percent sweeter
Ibid.

155
Coke crushed Pepsi
Hays,
Real Thing
; Edward Hess,
The Coca-Cola Company
, Harvard Business School, 2008; Michael Watkins,
The Coca-Cola Company: The Rise and Fall of M. Douglas Ivester
, Harvard Business School, 2007; David Yoffie,
Cola Wars Continue: Coke and Pepsi in 2006
, Harvard Business School, 2006.

156
“They said what’s fascinating”
Jeffrey Dunn to author.

157
Studies have found
Jennifer Breneiser and Sarah Allen, “Taste Preference for Brand Name Versus Store Brand Sodas,”
North American Journal of Psychology
, vol. 13, no. 2 (2011).

158
“We were no longer in a battle”
Sergio Zyman,
The End of Marketing as We Know It
(New York: HarperCollins, 1999).

159
With diet sodas
Beverage Digest
editor John Sicher to author.

160
“Your heavy-user base”
Jeffrey Dunn to author. The term
heavy user
also slipped into the conversations Coke had with Wall Street executives. For instance, on December 12, 2003, Doug Daft, the company’s chairman and CEO, revealed to investors that Coke was producing a new half-liter bottle, saying, “It’s fundamentally about giving people an opportunity who aren’t heavy users, heavy drinkers, to seriously consider the opportunity.” Four months later, on April 28, 2004, Coke told investors in a conference call that it was introducing a product called C2, which was formulated with half the calories of regular Coke in response to the ever-popular low-carbohydrate Atkins diet; David Van Houten, the chief operating officer said, “We believe that this product will appeal to heavy sugar cola users, and, in total, believe that it will get the total Coke trademark growing again.”

161
said he was astonished
Todd Putman spoke at a June 2012 conference on soda organized by the Center for Science in the Public Interest, and was interviewed by several media outlets. Coke, in response, said that Putman had worked for the company for only a brief time and that one of the strategies he cited, known as “share of stomach,” replacing other
beverages Americans that drank with Coke, was no longer the company’s goal. Rather, Coke said, it was responding to health concerns by developing a host of new low- or no-calorie products, which now totaled 41% of the company’s lineup, compared with 32% in 1999.

162
“It was a mind-bending paradigm”
“Former Coke Executive Slams ‘Share of Stomach’ Marketing Campaign,”
The Washington Post
, June 7, 2012.

163
The advertising policy
Jeffrey Dunn to author.

164
“If you think in terms”
Ibid.

165
“Magically, when they would turn”
“Former Coke Executive Slams.”

166
Coke left nothing to chance
Coca-Cola, in 1978, founded an entity called the Coca-Cola Retailing Research Council to address issues of concern to retailers. Coke points out that while it supports the council by funding the research projects, the council’s leadership is made up of grocery store executives who make independent decisions in using the research. Coke makes this research available to retailers through a service called Coke Solutions, which provides a wide range of assistance to grocers, from consumer trend analysis to customized marketing materials. One of the council’s early endeavors was a 103-page study, “Social Trends and Food Retailing,” produced for Coca-Cola in 1980 by SRI International. It noted the increasing numbers of working women with more money but less time on their hands, a trend favoring convenience foods (page 57). Increasing levels of stress would be driving consumers toward “mood foods” (71), the study said. It also divided Americans into four categories: “Belonger Consumers,” “Achiever Consumers,” “Inner-Directed Consumers,” and “Need-Driven Consumers.” The latter, comprised of economically challenged Americans, “are likely to buy more saturated fats such as pork, fatty hamburger, ham hocks, etc., and will purchase ‘stretch,’ ‘fill-up,’ foods, especially starches (bread, potatoes, spaghetti, noodles, rice, powdered and concentrated milk, etc.)” and are
“heavily inclined to eat processed foods” (86–87). Coca-Cola, nowadays, continues to present its research studies at various industry forums, generating considerable interest from the grocery and convenience stores. “Coca-Cola Bubbling With Ideas,”
SCP Daily News
, October, 13, 2006; “Using Shopper Research to Grow Sales,”
States News Service
, April 5, 2012. At a trade show in Dallas on April 30, 2012, Coke presented a study on checkout lanes that encouraged grocers to capitalize on “impulse buying” by increasing the use of beverage coolers. Soda, candy, and other items at checkout lanes currently total $5.5 billion in annual revenue but could grow to $7.2 billion with some simple improvements, the report said.

167
“Coke was doing it”
Jeffrey Dunn to author.

168
In 2005, the research arm
This report, “Convenience Teens: Building Loyalty with the Next Generation,” is offered to retailers through Coke’s marketing service on a highly restricted basis. The 41-page report, which I obtained a copy of, was copyrighted by the Coca-Cola Company in 2005. In conclusion, the report says of teens, “The social aspects of shopping are extremely important to them—namely, whether or not they feel welcome and like they belong. About technology: teens love it for what it can do for them, because it’s novel. They expect to refuel their devices the same way older shoppers expect to refuel their vehicles. Watch Out! Teens purchase the same items from other retailers that they buy at c-stores. For teens, convenience isn’t a store; it’s everywhere.”

169
a book arrived
H. Leighton Stewart et al.,
Sugar Busters!
(London: Vermilion, 1998).

170
The company’s strategy
Jeffrey Dunn to author; “Coca-Cola’s Marketing Challenges in Brazil: The Tubainas War,” Thunderbird School of Global Management; Yoffie,
Cola Wars Continue
; “Successful Retail Innovation in Emerging Markets: Latin American Companies Translate Smart Ideas into Profitable Businesses,” Coca-Cola Retailing Research Council, 2006. More recently, Coke announced that it would invest $7.6
billion in Brazil through 2016, adding three new factories for a total of fifty; its focus on Brazil exceeds even its interest in China, where Coke plans to invest $4 billion. Trefis Team, “Coca-Cola Pours into Brazil and China, Pushes PepsiCo Aside in the U.S.,”
Forbes
, April 10, 2012. Trefis, an analyst firm, estimates that Coke far outpaces the company’s other products, such as Diet Coke and Dasani water, as a measure of the value it brings to the company’s stock price. In second place, and surging, was Powerade, a sugar-sweetened sports drink.

171
wrote a letter
Jeffrey Dunn to author.

172
underwent a restructuring
In public forums and correspondence with the author, Coca-Cola has said that its strategies have embraced much of what Dunn was fighting for, including the marketing of water and a reduced emphasis on sodas in schools. “The world is changing, and we are too,” the company said at the Added Sugars Conference sponsored by the American Heart Association on May 5, 2010. Coke said it was expanding its lineup of no- and low-calorie products, improving its labeling with front-side calorie disclosures, and working to promote active, healthy lifestyles. Coke is also driving to put its products in the context of overall diet. “Misperception: Craving sweets is bad,” Coke says on its website. “You are literally born with it. Just remember: You may need to control your sweet tooth. Good health depends on a balance between calories you consume and calories you burn through physical activity. There is no such thing as a ‘bad’ food or beverage. If you love chocolate, ice cream or beverages that contain sugar, you can still include these in your diet—in moderation.” That said, Coca-Cola continues to come under fire from health advocates who contend that its tactics aimed at kids have evolved to emphasize social media. For a detailed critique, see Jeff Chester and Kathryn Montgomery,
Interactive Food and Beverage Marketing: Targeting Children and Youth in the Digital Age
, Berkeley Media Studies Group, 2007. At the same time, Coke continues to receive praise from grocers for being aggressive in marketing products like Sprite to kids, such as with TV ads during the 2012 Olympics. “Sprite Targets Teens
with ‘Intense’ Campaign,”
Convenience Store News
, July 30, 2012. “Sprite has a very specific teen target, so we’re looking for a crisp articulation,” a Coke marketing director explained. In its private discussions with marketers, Coke also continues to voice a strategy of driving consumption through various tactics. It has a program called “My Coke,” where kids can send out pictures of a polar bear holding a bottle of Coke through Facebook, where Coke’s own page has 47 million “likes.” Coke also has a rewards program called My Coke Rewards, which links consumption to free merchandise and donations to schools. Launched in 2006, the program is viewed as a resounding success. “We see a positive volume swing,” the program’s director said in the September 10, 2009, issue of
Colloquy
, a marketing trade publication. “My Coke Rewards members in general consume two to three times more than the typical U.S. household.” Perhaps the single most eye-catching item on Coke’s website today is a running tally of how many Coca-Cola drinks people have consumed in the day thus far. The number increases by some 25,000
each second
. The benchmark, Coke says, is from 2010: “1.7 billion servings daily.”

173
“You really don’t want them mad”
Ibid.

174
in his presentation
Jeffrey Dunn to author. I’m grateful to Dunn for sharing with me a copy of the presentation he made to the Madison Dearborn executives.

175
already agreed to buy
In July 2012, Madison Dearborn Partners announced it was selling the carrot farming operation, Bolthouse Farms, to the Campbell Soup Company for $1.55 billion.