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HGTV or CPG: Open Concept is What Consumers Want »

March 29, 2019

By Karin Moore, senior vice president and general counsel

I’ll admit it: I’m an HGTV junkie. Take me through your house-buying process. Show me your before and after. Let me judge you for wanting a tiny house with a finished basement with room for a pool table.

After countless hours of analysis, the one thing every buyer and homeowner has in common is wanting open concept. Walls need not apply.

via GIPHY

Coming away from the first day of GMA’s Legal Conference, my biggest takeaway isn’t all that different. When it comes to consumer packaged goods, consumers want open concept too.

There’s little clarity about how to achieve the transparency that consumers want — and likely will come to demand in time. Regulatory actions are disparate and murky. The federal government moves at a glacial pace. States and localities create a patchwork that companies need to comply with or stop selling their product, resulting in increased costs and less choice for the consumer.

But as we look at what consumers want in the future, we don’t need to wait for regulators to bring the walls down — and in many cases, we aren’t.

Consumer expectations are growing — and will continue to grow. Just like every home show, they want open concept and granite countertops, outdoor space and a double vanity. In the case of CPG products, they have a significant wish list and, unlike a homebuyer looking for granite countertops, they are unlikely to compromise on the things they care about.

At the GMA 2019 Legal Conference, we heard four consistent themes about what consumers want and what legal teams will need to account for in the future:

  • Insight into how a product is made. Is it ethically produced? Is it humanely sourced?

  • Packaging that makes sense. Is it sustainable in some way—or better, every way? Does it fit the product inside or will you have slack fill problems?

  • Visibility into ingredients that matter to them. Is it low sodium, organic, gluten free, vegan, Halal? Where were the potatoes grown? And where was the tuna caught? You name it, consumers are more interested in that information.

  • Clear and simple label information. They want to know about ingredients, but they don’t want labels cluttered to the point of confusion.

None of these wish list items are surprising or unreasonable. Unfortunately, sometimes the wires get crossed — and that often happens when regulations conflict and conflate the problem.

For example, whole grain cereals are considered healthy by the FDA. But California’s Prop 65 requires warning labels on products containing chemicals that have been known to cause cancer, regardless of amount and regardless of how it got in the product. According to California, that requirement would extend to the acrylamide formed when you bake whole grain cereals. While California presumably would rather consumers were sold uncooked whole grain cereal, whole grain cereals are healthy in the other 49 states. A morass of 50 different sets of rules creates an unhealthy regulatory environment. Regulations serve a purpose, but patchwork, conflicting regulations only serve to confuse consumers.

Regulations can also create a problem where none exists in the minds of consumers. There is a debate raging right now about what certain plant-based foods should be called. Can almond milk be called milk? Should cell- or plant-based meat be allowed to have “meat” on its label? These are not arguments that consumers will concern themselves with. “Consumers don’t really care, they just want the option for these foods,” said Emily Lyons of Michael Best & Friedrich LLP. “They just want truth in labeling and advertising.”

It is incumbent on legal teams to be ahead of regulations, not just compliant. Let’s do the work of giving consumers the open concept CPG products they want and deserve.

The 2019 GMA Legal Conference was held March 4-5. The annual event features in-house and outside counsel that provide expertise on the legal and regulatory challenges CPG companies are facing. Join us next February 25-26, 2020 in Rancho Mirage, Calif.



Our Vision for GMA’s Future »

February 13, 2019

By Geoff Freeman, president and CEO, Grocery Manufacturers Association

Over the past several months, we have been working with GMA’s leadership to develop a long-term strategy to fundamentally transform our organization. Together, we have set a bold goal: to elevate GMA as the leading voice of the consumer packaged goods (CPG) industry. GMA must become highly effective at articulating the industry’s narrative with key audiences, spearheading advocacy efforts to inform policy and driving initiatives that power growth.

Five core pillars will guide our work:

1. Transform the Organization

We will fundamentally reimagine and reconstruct GMA, building an organization that is prepared to succeed now and in the future. Every aspect of GMA — our identity, mission, structure, core capabilities and operations — must be aligned with our new vision. Incremental steps are not enough to achieve our goals; we must embrace organization-wide change.

2. Establish Distinct Purpose and Mission

The transformation of GMA must begin by answering two foundational questions: “who is GMA?” and “what is our mission?”

GMA has struggled to clearly answer these questions in the past, which led to confusion and conflicting priorities. In particular, GMA attempted to represent both consumer-facing and non-consumer-facing brands, and it focused on a number of “aisle-specific” issues that failed to unite industry interests.

Instead, we propose the following two simple, strategic answers:

  • We are consumer-facing brand manufacturers at our core.

The leadership of branded CPG companies must drive GMA’s agenda and priorities going forward. In today’s world, consumer-facing companies operate in a fundamentally different environment; understanding and shaping this environment must be the core of GMA’s mission.

  • We are an umbrella organization built to drive industry growth and profitability.

The new GMA will embrace a proactive, strategic agenda focused on the business of consumer packaged goods. We will be an umbrella organization that unites the industry by taking its cue from C-suite leadership and removing barriers that impede growth for our core member companies.

3. Build Proactive Advocacy Agenda

To achieve our new mission — delivering industry growth for consumer-facing brand manufacturers — GMA must develop modern advocacy capabilities that are on-par with the best trade associations. This means multi-faceted advocacy that integrates strategic communications, research, ally development and government affairs.

To build this vital function, GMA will:

  • Develop and articulate a clear, compelling industry narrative.

We will create a cohesive narrative that spotlights and quantifies our industry’s value, from economic contributions and jobs to industry innovations and environmental sustainability. This positive, compelling story will provide the basis to change perceptions, generate political and public support and shape policy.

  • Align issue priorities to C-suite priorities.

GMA’s agenda must shift to reflect the priorities of our member companies’ top leaders. This is the only way GMA can effectively drive industry growth and ensure relevance for those we serve.

  • Adopt a pro-consumer orientation.

Choice. Affordability. Access. Product Innovation. Aligning our advocacy around these pro-consumer concepts exponentially increases our prospects for success.

  • Possess a bias for offense.

Our advocacy agenda must be built on an offensive mindset — seeking opportunities for growth, driving a clear, positive narrative, actively shaping industry perceptions and framing the debate.

4. Focus on Clear Set of Priorities

We will make informed and disciplined choices about our priorities, focusing on the critical imperatives that yield the strongest returns. Instead of trying to be all things to all people, we will bring clarity to our strategy and set defined goals.

With this in mind, two core themes will drive everything we do:

  • Promote the value of our industry.

We must build a narrative about the power and impact of our industry, establishing GMA as the go-to source for influencers, expertise and research on critical consumer and industry trends. We must tell our story, instead of allowing others to tell it for us.

  • Champion smart, uniform regulation. 

We must highlight the negative impacts of costly, patchwork regulations, while calling for a smart, informed federal regulatory framework that promotes choice and builds consumer trust across the sectors we represent, from food and beverage to cleaning products.

In addition, three practice areas will command our primary focus through 2020:

  • Build trust in products.

We are a complex industry built on complicated science, chemicals and emerging technologies. Contrast that with strong emotions, rapid information sharing and a world of “alternative facts” and you have the makings for an environment that erodes trust between brands and consumers. GMA will seek to build trust by promoting our industry’s ability to provide consumers with the information they seek, shaping a more informed environment about our commitment to safety and leveraging programs, such as SmartLabel, to fill a void in the information marketplace.

  • Enhance packaging sustainability.

The industry boasts a wide range of sustainability commitments and advancements that need to be communicated to key audiences. GMA must also help demonstrate the widespread confusion around the current recycling system and the roles others must play in advancing recycling innovation.

  • Create frictionless supply chains.

Our industry is a global leader in supply chain innovation. GMA must help secure industry standing as a key stakeholder – and expert voice – on supply chain issues. Making up one-fifth of all freight, transportation capacity is an issue of immediate concern to the industry, and GMA will focus on the consumer impact of these issues, while quantifying the negative impact of recent mandates that have exacerbated transportation capacity challenges.

These areas are ideal starting points for the new GMA to earn trust with consumers, promote industry leadership and educate diverse stakeholders. Expect to hear more about these initiatives in the near future.

5. Engage Retailers Strategically

GMA is committed to determining and pursuing that which is in the best interests of manufacturers. We will seek opportunities to collaborate with retailers where our interests align. We will also expand our retailer relationships to be consistent with the customer base of members and representative of the totality of the retailer community.

Looking ahead, these five pillars will now guide GMA’s direction and decisions. We look forward to beginning this challenging, but critical work to transform our organization and create a new, powerful voice for the consumer packaged goods industry.



How Concerned Should Americans Be About Food Safety? »

January 16, 2019

As the government shutdown lingers with no end in sight, the chorus of concern over food safety grows. Since the FDA was forced by the government shutdown to stop routine inspections on December 29, more than 35,000 social posts show the confusion and fear over food safety are widespread.

 

 

 

 

 

 

 

 

 

 

 

But how concerned do Americans need to be over what’s in their shopping carts?

Food safety does not stop with FDA and USDA inspections. American consumers should be confident that they are being protected in several key ways:

  • Food safety is the top priority of manufacturers who have countless experts on the job every day to ensure Americans have access to safe products. Every registered manufacturer is required to have one — and most have multiple — food safety plans for the products they produce. The presence of an inspector does not affect the extensive and constant monitoring processes that continue at all times, no matter what. Doing anything less is a threat to consumer health and the viability of their businesses.
  • FDA and USDA inspections are only one part of the food safety system, and most lines of defense are unchanged. The job of food safety is largely in the hands of manufacturers, and it is a job they do very well. The government’s role is oversight and determining violations. It is a necessary role, but even in its absence, all other safety practices continue.
  • In the event of a threat to food safety, FDA and USDA have a process in place and a team that will be activated. When it comes to public health, these agencies will take appropriate measures, even in a shutdown.

Despite myriad protections still in place to protect public health, the shutdown is having some very real and damaging effects and it is imperative that Congress and the White House resolve this issue.

Consumer confidence has become a casualty of the shutdown. The American people deserve to have confidence in their food and every day that goes by without these routine inspections that confidence erodes. The public reaction to the shutdown reinforces the importance of a sound partnership between food manufacturers and government regulators, one that needs to be fully reinstated as soon as possible.

To his credit, FDA Commissioner Scott Gottlieb and USDA Secretary Sonny Perdue have actively communicated with the public throughout the shutdown to help quell the alarm over food safety. They have been clear in their assurances that consumer protection remains a top priority and that responding to outbreaks is an excepted activity. Gottlieb also tweeted on Monday that the agency will resume high-risk activities this week.

Another — and perhaps more lasting — threat is to the morale and retention of FDA and USDA staff. The dedicated staff at these agencies should be commended for continuing to work unpaid throughout this shutdown in the interest of public health.

The question is how long they will be able to stay on the job. With morale undoubtedly shaken as the shutdown drags on and paychecks unissued, government workers are being forced to look into alternative employment. Job search site Indeed.com reported that federal employee job searches are up 17 percent since the start of the shutdown, offering data that backs concerns we have over qualified food inspectors leaving for other jobs.

These people are not easily replaced. They are skilled employees who require significant training. In today’s tight labor market, they are highly valuable and have options. Replacing any departing staff will take months, extending the consequences of the shutdown in a way that could be felt for a very long time.

By the administration’s own estimate, the cost to the U.S. economy is swelling and far greater than its first assessment. But the true cost will be harder to quantify, with intangible losses in trust and talent likely to linger. It’s time to bring this shutdown to an end and start the process of restoring faith — in food safety and in government.



How the Government Shutdown Affects the CPG Industry »

January 11, 2019

UPDATED JAN. 18 – Now 28 days in to the longest government shutdown in history, the cracks are starting to show. The compounding effects of the shutdown are being felt well beyond the Beltway and the lingering damage threatens to last for months, if not years.

Political Situation Shows No Signs of Improving 

House Speaker Nancy Pelosi requested President Trump postpone the State of the Union address, citing security concerns, until the shutdown is over. Trump retaliated on Thursday, canceling a planned congressional delegation to Afghanistan, Egypt and Belgium. In short, there’s no evidence a compromise is on the horizon.

Economic Effects Worse Than First Thought

By the administration’s own estimate, the cost to the U.S. economy is swelling and far greater than its first assessment. Wall Street analysts reportedly fear zero growth in the near term, but are concerned about the longer term implications. “The protracted impasse could convince consumers and businesses that the federal government will spend all of 2019 on the brink of crisis — whether on the border wall, trade with China or the debt limit,” wrote Politico’s Ben White. “That could choke business investment and consumer spending, bringing an end to one of the longest economic expansions on record.”

FDA Resumes Some Inspection Activity

The announcement that FDA would stop routine food inspections spurred rampant consumer confusion, as addressed in this recent GMA blog. As of this week, tens of thousands of federal employees have been called back to work (unpaid), including at the FDA, where high risk food inspections and sampling have resumed.

Government Employees Look for New Opportunities, Prolonging Negative Effects

Job search site Indeed.com reported that federal employee job searches are up 17 percent since the start of the shutdown. Replacing departing staff — particularly for highly skilled jobs like food inspectors — will take months, dragging the negative effects of the shutdown beyond its end date, whenever that may be.

The CPG industry, federal employees and the American people should not be collateral damage of a political fight. It is past time for Congress and the White House to come together to resolve the issue before it gets any worse.

POSTED JAN 11. —————————————————————————————————————————————-

The standoff over $5.7 billion in border wall funding that led to the federal government being shuttered 21 days ago threatens to become the longest in history if it extends until tomorrow. Beyond historical implications, today marks a critical point in this political battle as federal employees miss their first paycheck since the shutdown began.

Political Environment Today

While the situation could change by the minute, at present, both President Trump and congressional Democrats are dug in on their positions and show no signs of yielding. Trump reportedly walked out of a meeting with Democrats at the White House on Wednesday and Speaker of the House Nancy Pelosi (CA) has been vocal about her belief the wall is “immoral.” There has been some softening of Senate Republicans — Senators Lisa Murkowski (AK) and Shelley Moore Capito (WV) have indicated a willingness to reopen government, and Senators Cory Gardner (CO) and Susan Collins (ME) are both up for reelection in swing states next year — but the number is not substantial enough to reopen the government at this point and Senate Leader Mitch McConnell (KY) has said he will not call for a vote without Trump’s approval.

What It Means for the CPG Industry

Three weeks in, the cascading effects of the shutdown are hitting the CPG industry. GMA is tracking the developments and consequences as this shutdown drags on.

Stoppage of routine inspections may make Americans nervous about the safety of their food.

A rash of coverage this week about FDA’s inspections being halted by the shutdown gave reason for Americans to question the safety of their food. While this anxiety is understandable, the real effect should be minimal. FDA uses a risk-based approach to target inspections. POLITICO’s Helena Bottemiller Evich tweeted that routine inspections were “not really comparable to fire response. Maybe more like fire marshal inspections. [For what it’s worth] FDA foodborne illness outbreak investigations & response, high-risk recalls, etc., continue through shutdown.”

GMA’s science lead, Dr. Betsy Booren confirmed “if there is a food safety outbreak, rest assure that there is a process and team in place that will be activated — in issues of public health, these agencies are still working.”

Regulatory issues are at a standstill with significant uncertainty.

The government shut down just two days after the new bioengineered disclosure standards were announced, leaving it in regulatory limbo. Other key issues like the nutrition facts panel, Dietary Guidelines and development of industry guidance are also on hold. Further, when the government does open, it is not a simple flip of the switch, and it will likely take time to ramp back up.

It is costing the industry money as tariff exclusion requests go unconsidered.

CPG suppliers looking for exclusion requests on steel and aluminum tariffs are unable to have their requests granted — or even considered — by the Department of Commerce. Three weeks of requests and counting add to an existing backlog of requests yet to be processed, exacerbating the delays.

The CPG industry is intensely focused on creating sustainable and environmentally responsible packaging. As visuals of overflowing waste in America’s National Parks have come to represent the shutdown, it is clear that trash and recycling pickup should be considered an essential function.

With trash service suspended at National Parks, the pileup of waste has become a consistent visual of the effects of the government shut down. The CPG industry has committed to sustainable packaging and has made great progress, and it is disappointing to see the images of trash improperly disposed of cluttering national treasures. Environmental responsibility should not be abandoned in political fights and waste pickup should be made an essential function even during government shutdowns.

Information and scientific innovation is limited with government research halted.

With research at agencies like USDA and National Science Foundation at a standstill, and key indicators like jobs and retail sales numbers not being released, information that CPG businesses rely on is not coming through and may be slow to recover.

Government workers are shaken and looking for employment elsewhere, leading to unknown and long-term impacts even after the shutdown ends.

The uncertainty over paychecks in a time of low unemployment makes for fertile recruiting ground. Reports of workers calling in sick to work at or interview for other jobs and higher rates of turnover during the shutdown are starting to roll in. In addition, workers hired before the shutdown are stuck waiting to start. At FDA, where there are 1,400 vacancies, onboarding and recruitment efforts are at a standstill.



Our New Year’s Resolution? Help Americans Lose 638 Million Pounds »

December 21, 2018

The best New Year’s resolutions must be achievable and practical if you intend to keep them. So, we decided that losing 638 million pounds sounded reasonable.

No, really! Hear us out.

Food waste is a major problem in America. And because far too many of us aren’t sure when to throw away old products (what do those pesky date labels mean anyway?), we’ve landed on the prevailing wisdom of “if in doubt, throw it out.” A report by Harvard Law School’s Food Policy Clinic and the Natural Resources Defense Council found that more than 90 percent of Americans may toss food too early because they misinterpret date labels.

What’s worse, the USDA estimates 133 billion pounds of food is wasted in the United States each year. That’s nearly a third of the available food supply of 430 billion pounds, and more than $161 billion worth of food wasted.

We can do better. And in 2019, we will. If every American household held on to 10 items — just 10! — we could lose 638 million pounds of waste.

Don’t worry, we’re going to help you get there. Last year, food and beverage manufacturers and grocery retailers got together to help solve this problem. They came up with two simple, streamlined labels: USE By and BEST If Used By.

Gone are the days of wondering what “sell by” means to you or if “enjoy by” has anything to do with safety. Much simpler, isn’t it?

Nearly nine-in-ten (88%) Americans say that these definitions are clear to them. Another 85 percent say these simpler terms would be helpful to them, making them feel safer, waste less, save money, and feel more confident about the products they use.

Top Benefits of Simpler Product Labels

  • Feeling safer about what is consumed
  • Throwing less away
  • Saving money by throwing less away
  • Being more confident in products used

 

 

Join us in our fight against food waste. There is a long way to go, but even small changes can make a big difference—638 million pounds by our count.

Add your voice to the #10ItemsLess pledge. Click to share.

To learn more about this issue, please check out GMA’s new report, Best If Clearly Labeled.



GMA’s Best Days Are Ahead »

November 20, 2018

By Geoff Freeman, GMA president and CEO

My first 100 days at GMA have been productive – listening to voices across the industry, identifying areas of common cause and putting in place a high-performing team. Day-by-day, with the help of new senior leadership, we are pivoting from defense to offense. We have analyzed critical functions, targeted key investments and addressed gaps in strategy with a single goal in mind: building an association that is indispensable to the industry.

Defining Who We Are: Brands

To build that association, the first question we must answer is: who is the industry? In recent years GMA’s effectiveness has been hampered by trying to be all things to all people – from food and beverage to household and personal care; from prominent brands, food service and private label to agricultural components. Our future success depends on deciding who we are at our core.

I firmly believe that GMA’s best strategy is to become the association of consumer-facing brands. This defines our common ground — the challenges, risks and opportunities we all share and complex relationships with consumers, retailers and governments we all must manage. These brands will drive GMA’s future, and we will continue to welcome suppliers and partners who find common cause with our agenda.

Getting There from Here

The following critical pivots will provide our core membership with an association that can capture their imagination and deliver on their goals:

Promote Growth in a Vast, Complex Industry. From packaging to supply chain, countless issues drive consumer demand, impact brand equity and shape short- and long-term profitability. GMA’s new advocacy agenda will address each key component of our members’ businesses. At present, we are myopically focused on the food and beverage product: ingredient, nutrition and safety. Moving forward, we will expand our horizons to focus on removing frictions within packaging, supply chain and customer generation that pose barriers to growth.

• Establish a Proactive Agenda. When it comes to external engagement, we are currently operating on playing fields defined by our opponents — reacting to their critiques, rather than establishing our own objectives; allowing them to set the terms of debate, rather than driving a winning result based on terms we define. Going forward, our proactive agenda will be framed by three questions: What can we do for the industry that members alone cannot achieve? What are our top priorities? And, what is the strategy that will empower us to achieve our objectives?

• Tell the Industry’s Story on our Terms. Our industry’s massive economic footprint and vast social contributions improve communities across America. Yet instead of aggressively communicating these benefits, GMA is silent. Our critics, on the other hand, relentlessly shape a counter narrative about “Big Food” – and they are winning. Their voices, left to echo through our silence, define our industry as indifferent or even hostile to the needs of consumers. Brands effectively connect with consumers about their shared values; the broader CPG industry must do the same by confidently telling our industry’s story on our own terms.

Components of a Winning Strategic Plan

These pivots above will enable GMA to be relevant, but our goal is to be indispensable. While a longer-term strategy is still being formulated, I see five key components to driving GMA’s transition in 2019:

• Build a Nimble Organization that Can Execute an Advocacy Agenda. Our strategy is founded on creating a policy environment where our industry can thrive and grow. First and foremost, GMA must become known as a skilled and powerful industry advocate. To achieve this objective, we must build an organizational structure and best-in-class public affairs operation that can quickly adapt to issues that arise in the marketplace and seize fast-moving opportunities. To this end, many of GMA’s 110 legacy committees are likely to be eliminated.

• Maximize Progress Across Our Entire Industry. GMA’s number one responsibility is to do for the industry what individual members alone cannot achieve. Looking forward, projects that benefit only the few will be shelved in favor of those that create industrywide opportunity or address systemic risk.

• Adopt a Pro-Consumer Posture Oriented Towards Growth. Our mission will be growing the size of the overall pie, so our members can compete for share, not protecting the status quo. We will promote growth by removing frictions — inefficiencies, costs, barriers — from the marketplace. To best identify these frictions, GMA must think like business leaders and consumers. We will shift our day-to-day mindset to the pro-consumer concepts of affordable access, consumer choice and confidence, and product innovation.

• Define Clear Principles for Engagement. In the past, we have struggled with the question of how, when and to what end we should engage on complex product-specific issues. Why? Largely because we lack a set of overarching principles to guide our engagement. We can’t fight and expect to win every arbitrary or ill-defined battle. We must determine what GMA stands for — the red lines we will not cross — and use those criteria to evaluate issues as they emerge.

• Shape Perception to Drive Favorable Policy. I have always believed that perception drives policy – and our industry is no exception. By communicating our economic impact, social contributions, efforts to adapt to changing consumer preferences and investments in disruptive technologies, we can overcome the negative stereotypes that are being fueled by our opponents and reshape public perception of our industry. GMA will lead an ongoing, research-based campaign to shape the industry narrative and proudly tell our story.

As we arrive at this critical moment of strategic clarity, I am convinced that GMA’s best days are ahead. Change will not always come as quickly or easily as we would like, but I am confident that a trade organization focused on an advocacy agenda, supported by the right organizational structure and committed to driving greater industry growth is precisely what our industry needs today.



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