Strategic CSR - Clif Bar

I like the passive-aggressive tone of the open letter in the url below from the co-CEOs of Clif Bar (Gary Erickson and Kit Crawford) to the CEO of KIND Bar (Daniel Lubetzky). The letter appeared as a full-page ad in The New York Times on March 6, 2019:

 

"Dear Daniel, We would like to issue a challenge: do a truly kind thing and make an investment in the future of the planet and our children's children by going organic. To make it easier, we at Clif Bar & Company will help you. We know how strange this offer sounds coming from a competitor, but more than ever we believe that making the world better means making it organic."

 

In reality, of course, the letter is a way for Clif Bar to emphasize the move they made to 100% organic ingredients a number of years ago and differentiate that from KIND Bar's reluctance to do so today:

 

"Going organic isn't easy, we know. But in 2003, we broke with conventional business wisdom and decided to take what initially seemed to be a huge risk. The investment required more people, time and money. Despite those challenges, this year we celebrated the purchase of our billionth pound of organic ingredients and continue our relentless quest to move from our current 76% organic ingredients to 100%."

 

As they continue to gloat:

 

"So much more still needs to be done. Despite our success, organic food represents only about 5% of retail food sales in the U.S. It's become a mission for us to champion the power of organic and move that needle, and not by a little. That's why we're also the largest private funder of organic research in the country and why we're issuing this challenge—we can't do it alone."

 

The passive-aggressive approach continues:

 

"If Clif Bar and KIND—the two largest nutrition bar companies in the country—joined hands, the impact would be that much more powerful. And if we then got RXBAR (Kellogg's), LÄRABAR (General Mills), and all the other non-organic brands to go organic, the benefits to people and planet would be exponential. Maybe a move to organic would even inspire your part-owner Mars to take its entire line of candy organic. Stranger things have happened."

 

It seems the feud between the two firms is long-standing and only escalating:

 

https://nypost.com/2019/03/13/kind-escalates-clif-bar-feud-as-companies-fight-over-ingredients/

 

Of course, the key point to understand is why these other bars have not yet gone to all organic ingredients. Could it be because they are not progressive enough to understand the (largely perceived) nutritional value of doing so? Or, could it be that their stakeholders are not willing to pay the higher costs to reduce the damage large agricultural companies do to the planet? In this light, is Clif Bar's exhortation as philanthropic as they suggest or a somewhat desperate attempt to raise the costs of their competitors?

 

"If you commit to this challenge, we will share our expertise, including all the things we have learned about going organic. Think of it as 'Open Source Organic.' To sweeten the deal, we will even throw in 10 tons of organic ingredients. Are you in?"

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e 

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

An Open Invitation to KIND Bar from Clif Bar

By Gary Erickson & Kit Crawford (Founder and co-CEOs of Clif Bar & Company)

March 6, 2019

The New York Times

Late Edition – Final

A24

https://www.clifbar.com/article/an-open-invitation-to-kind-bar-from-clif-bar

 

Strategic CSR - GMOs

The article in the first url below provides an update on the Vermont law that went into effect earlier this year requiring firms to label products containing GMO ingredients (see Strategic CSR – GMOs). Rather than have firms deal with piecemeal legislation, state-by-state, Congress has now acted to pass federal law that supersedes any individual state's legislation. Unfortunately, the new law looks as though it is a victory for large companies and their lobbying budgets, rather than clarity for consumers:

 

"In a victory for food companies, Congress has passed a federal requirement for labeling products made with genetically modified organisms that will supersede tougher measures passed by one U.S. state and considered in others. The bill will require labels to be reworked or updated to show whether any of the ingredients had their natural DNA altered, but will take years to phase in and will give companies the option of using straightforward language, digital codes or a symbol to be designed later. The terms are in contrast to a law that went into effect this month in Vermont. That law required food manufacturers and grocers selling prepared foods explicitly to label items that contained GMO ingredients by January. Companies that violate the law face fines of as much as $1,000 a day."

 

By the time this law takes effect, at least in the US, it is going to be hard to find any food without ingredients that have "had their natural DNA altered" in some way:

 

"GMOs, used in the U.S. for about two decades with federal approval, are crops whose genes have been engineered to make them resistant to pests, better able to withstand drought and otherwise hardier. Federal regulators have approved the GMO seeds on the market, but environmentalists and natural food supporters say they can hurt the environment and rely on herbicides that could harm consumers. The vast majority of corn and soybeans grown in the U.S. is genetically engineered, and the Grocery Manufacturers Association trade group estimates that 70% to 80% of foods eaten in the U.S. contain ingredients that have been genetically modified."

 

While I support the science behind GMOs (which is pretty clear that there are no demonstrated negative effects from producing and consuming foods containing GMOs), I also believe that consumers should be able to decide for themselves whether they choose to ingest these products. As a general rule, transparency is always a good thing in communication between firms and all their stakeholders. Hopefully, those firms sufficiently progressive to see where the national debate is heading will voluntarily begin labelling their products accurately:

 

"Some big companies including Campbell Sound Co., General Mills Inc., Kellogg Co. and Mars Inc. went ahead and began placing GMO-labeled items on store shelves several months ago nationwide either in response to consumer demand or Vermont's law. Danone SA said on Thursday that it would also begin to label GMO ingredients in yogurts made for the U.S. market. A Campbell spokeswoman said the U.S.'s largest soup manufacturer will continue to print labels with words related to GMO ingredients, and the company is in discussions with federal regulators about the language. A Mars Inc. spokesman said the company is sticking with the text it has applied to products containing engineered ingredients for now. General Mills will review the regulations and assess consumer preference before developing its long-term plan on labeling, a spokesman said."

 

The article in the second url below reports on a more recent executive order that further standardizes what is considered to be a 'genetically-modified organism' and stipulates how companies will have to convey this information to their customers, even while breaking them in gently:

 

"The new law mandates that the Department of Agriculture define what constitutes a genetically modified food ingredient and then requires food manufacturers to label products that contain them. Disappointment among labeling proponents stems from the latitude the law gives food companies in how this labeling is done."

 

As the article concludes, however, GMOs are only one (and far from the most pressing) among many issues surrounding food quality and labeling:

 

"Of course, there is much more we could know about our food than whether it was genetically engineered. Now that we're 'allowed' to know about G.M.O.s, there are some other questions about the food we buy that we might like answered. For example: Where are the ingredients from? Were antibiotics routinely administered to animals? What pesticides and other chemicals were used, and do traces of these chemicals remain? Was animal welfare considered, and how? What farming practices were used? How much water was required? Let's really get down to it. Were the workers who sweated to put food on my table paid at least minimum wage? Did they get health benefits? Overtime? Were they unionized? Protected from pesticide exposure?"

 

Take care

David

 

David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (4e)

© Sage Publications, 2017

 

Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/

 

 

Congress Sets Rules for GMO Labels

By Heather Haddon

July 15, 2016

The Wall Street Journal

Late Edition – Final

B3

http://www.wsj.com/articles/congress-passes-gmo-labeling-rules-that-supercede-tough-state-measures-1468516761

 

G.M.O. Labeling Law Could Stir a Revolution

By Mark Bittman

September 2, 2016

The New York Times

Late Edition – Final

A19

http://www.nytimes.com/2016/09/02/opinion/gmo-labeling-law-could-stir-a-revolution.html

 

Strategic CSR - GMOs

The national debate here in the U.S. about food labelling is heating-up. In particular, it is the issue of genetically-modified organisms (GMOs) that is the battleground of choice:

 

"The country's first law requiring mandatory GMO labels is slated to go into effect in Vermont on July 1 after an industry-backed federal law that would block states' authority stalled in the U.S. Senate [recently]."

 

Given the extent of the fines associated with a failure to comply, it looks like the Vermont legislature is serious about enforcement and, as a result, the food companies have to be serious about compliance:

 

"Facing fines up to $1,000 a day per product, food makers from giants like General Mills Inc. to regional businesses like Vermont Fresh Pasta are making big adjustments, many of which extend beyond the state's borders."

 

As the article explains, the law in Vermont is ground-breaking not because Vermont is an important market, but because the nature of the supply chains of large, multinational companies is that they prefer uniformity, since it reduces costs. When the issue is legal compliance, in order for a firm to comply and also be consistent throughout its supply chain and all markets, it forces all operations to adhere to the highest standards of the strictest areas:

 

"Vermont is a tiny market for most companies, but the integrated nature of supply chains gives it an outsize effect. On Friday, General Mills said it is slapping GMO labels on its packaged food nationwide, saying it would be too complex and expensive to create a separate distribution network for the 626,000-person state of Vermont. The maker of Cheerios and Lucky Charms remains firm in its stance against mandatory labeling, but 'having one system for Vermont and one for everywhere else is untenable,' said Jeff Harmening, General Mills' chief operating officer of U.S. retail."

 

I see this action by Vermont as an excellent example of a stakeholder (the state legislature) holding an industry to account based on its expectations of what constitutes socially responsible behavior. As this chart in the article indicates, GMOs are already out there – the least the regulatory authorities can do is make consumers aware of the ingredients that are in the food they are buying:

 

http://si.wsj.net/public/resources/images/P1-BW811_GMOLAB_16U_20160320172106.jpg

 

Here is an example of what a label that complies with the new law might look like (see the box labelled "Produced with Genetic Engineering"):

 

http://si.wsj.net/public/resources/images/BN-NE147_GMOLAB_M_20160320143055.jpg

 

What I would like to see now is an informed debate about the pros and cons of GMOs (including the science around these organisms), not only in the developed world, but in many emerging markets, too – something I have yet to see at any kind of broad level.

 

For more details about this story and its wide-ranging effects, see: http://www.theguardian.com/sustainable-business/2016/mar/24/gmo-food-labels-general-mills-kellog-mars

 

Take care

David

 

David Chandler & Bill Werther

Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)

© Sage Publications, 2014

 

Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/

Strategic CSR Simulation: http://www.strategiccsrsim.com/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

GMO Labeling Law Roils Food Companies

By Annie Gasparro and Jacob Bunge

March 21, 2016

The Wall Street Journal

Late Edition – Final

B1

http://www.wsj.com/articles/gmo-labeling-law-roils-food-companies-1458510332

 

Strategic CSR - Purpose marketing

One of the biggest dangers to the CSR project is the prospect of greenwashing. The more stakeholders (and consumers, in particular) suspect that CSR is a symbolic exercise, the less likely they are to fully engage. With this in mind, the article in the url below is concerning. It discusses the idea of “Purpose marketing,” which is “also called pro-social marketing, advertising for good and conscious capitalism.” On the surface, the effort seems like it would advance the cause of CSR:

 

“The goal is to convince potential customers that the companies operate in a socially responsible manner — marketing ‘meaningful brands,’ to borrow a term from the Havas Media division of Havas — that goes beyond tactics like making charitable contributions or selling a product or two in recyclable packaging.”

 

In reality, however, when the goal is to “woo consumers,” the temptation for abuse is too great. My skepticism is increased when the first and primary driver of purpose marketing is to increase sales, rather than raise awareness and understanding:

 

“Purpose marketing is becoming popular on Madison Avenue because of the growing number of shoppers who say that what a company stands for makes a difference in what they do and do not buy.”

 

Call me cynical, but when proponents of purpose marketing say things like “Consumers are seeking ‘authentic emotional connections’ with brands, … and the perception that certain ‘shared values’ can increase loyalty,” I am ready to run in the opposite direction. The danger is that the actions of seemingly genuine companies, such as Panera Bread (see ad here), are lost among a general increase of emotive-laden ads, designed to appeal to the segment of consumers willing to educate themselves about firm behavior and discriminate in their purchase decisions. By virtue of their increased engagement, however, these same consumers will also be quicker to see through the attempts of firms that seek to mislead them in pursuit of inflating sales via vague and, ultimately meaningless, slogans:

 

“Other brands known for purpose marketing include Kashi, sold by Kellogg, and Whole Foods Market. A newcomer to the trend, Union Bank, is introducing a campaign … in San Francisco that carries the theme ‘Doing right, it’s just good business.’”

 

Take care

David

 

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

 

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

 

 

Selling Products by Selling Shared Values

By Stuart Elliott

February 14, 2013

The New York Times

Late Edition – Final

B3

http://www.nytimes.com/2013/02/14/business/media/panera-to-advertise-its-social-consciousness-advertising.html

 

Strategic CSR - Organic food

This will be the last CSR Newsletter of the Fall semester. Have a great holiday season and I will see you in 2013!

The article in the url below charts the evolution of the organic food industry in the U.S. from the perspective of one of its founders—Michael Potter, founder of Eden Foods (http://www.edenfoods.com/). The article reports that, in many respects, the terms “organic” and “big food” are becoming synonymous:

“The fact is, organic food has become a wildly lucrative business for Big Food and a premium-price-means-premium-profit section of the grocery store. The industry’s image — contented cows grazing on the green hills of family-owned farms — is mostly pure fantasy. Or rather, pure marketing. Big Food, it turns out, has spawned what might be called Big Organic.”

Many of the small and local brands, which many consumers probably believe remain ‘small and local,’ are now ‘big and remote’:

“Bear Naked, Wholesome & Hearty, Kashi: all three and more actually belong to the cereals giant Kellogg. Naked Juice? That would be PepsiCo of Pepsi and Fritos fame. And behind the pastoral-sounding Walnut Acres, Health Valley and Spectrum Organics is none other than Hain Celestial, once affiliated with Heinz, the grand old name in ketchup. Over the last decade, since federal organic standards have come to the fore, giant agri-food corporations like these and others — Coca-Cola, Cargill, ConAgra, General Mills, Kraft and M&M Mars among them — have gobbled up most of the nation’s organic food industry. Pure, locally produced ingredients from small family farms? Not so much anymore.”

The result of all this consolidation and commercial interest, according to Potter, is the dilution of the meaning associated with the organic label and all the health benefits that he believes stem from good, wholesome food. One example of how the influence of agri-business is affecting the final product is in the compilation of the National Organic Standards Board (http://www.ams.usda.gov/AMSv1.0/NOSB) (increasingly corporate) and the Board’s list of what substances can be included in organic foods and still continue to call the final product ‘organic’ (increasingly long):

“As corporate membership on the board has increased, so, too, has the number of nonorganic materials approved for organic foods on what is called the National List. At first, the list was largely made up of things like baking soda, which is nonorganic but essential to making things like organic bread. Today, more than 250 nonorganic substances are on the list, up from 77 in 2002.”

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

© Sage Publications, 2011

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

Has ‘Organic’ Been Oversized?

By Stephanie Strom

July 8, 2012

The New York Times

Late Edition – Final

BU1

http://www.nytimes.com/2012/07/08/business/organic-food-purists-worry-about-big-companies-influence.html