The introduction of new regulation can pose significant challenges to companies, especially when it has far reaching implications for many parts of their business. This becomes more difficult when the company is consumer-facing and potentially newsworthy.
Two pieces of recent legislation have been particularly tricky: the sugar tax on soft drinks and the publication of companies’ gender pay gap. Putting aside the headaches of gathering complex data and product reformulation, they have in common the further challenge of how to communicate on an emotive issue. In both cases, it is important that companies appear engaged with consumer and stakeholder expectations, rather than reacting to something that has been ‘enforced’ on them.
The 2016 Government response to the Select Committee’s report on childhood obesity targeted soft drinks, but also includes warning signs for companies about possible further regulation, describing their vision as ‘the first step’ and ‘not the final word’. The follow-up 2017 progress update praises certain manufacturers and retailers that taken significant steps (Tesco, Petits Filous, Kellogg’s, Waitrose and Nestlé being mentioned) but the report states that the industry as a whole has made insufficient progress, clearly pointing a finger at out-of-home restaurants and food outlets for not providing sufficient information about their products at point of purchase. Few offer the sort of content granularity that McDonald’s, for example, has had in place for some years. In addition, recent reports that the industry as a whole has made disappointing progress on reducing sugar in food products further suggests that self regulation is not working.
So has recent regulation opened the door to further laws being imposed? Probably. The obesity problem is clearly not going away any time soon. And with Brexit fast approaching, this offers the Government the opportunity to shape legislation further, particularly in relation to nutritional communication.
Although the Government has taken an integrated approach to its plans, the report states that many companies have been resistant or unable to provide consistent information on sugar content. Can we draw lessons from the gender pay gap model? Is it possible that the Government could define further stringent information requirements that food and drink companies have to publicly report to, be that on pack, at point of purchase, or on-line? We asked MPs this winter if they agreed with the statement ‘it wouldn’t surprise me if the model of the gender pay gap legislation is rolled out to cover other corporate transparency issues’ and found nearly two thirds (62%) agreed, with a further 85% agreeing that ‘transparency is more important than ever for consumer facing companies’ [Ipsos MORI MPs study winter 2017, c.100 face-to-face interviews].
So if more legislation related to transparency generally and obesity and healthy eating in particular is headed this way, how can companies handle this in terms of their communications?
- Get ahead and be very transparent. Those companies that reformulated in the two-year period prior to the implementation of the sugar tax appeared forward-thinking and to be taking ownership of the challenge. Britvic in particular embraced this, reformulating all Robinsons squashes to sugar free, and was very clear about those changes.
- Consider taking a stance. It can be beneficial to state a view on the value (or not) of the legislation and to defend this view in honest and open terms. Obviously this needs careful consideration in terms of whether it could potentially alienate customers or employees, but it can reinforce the credibility and humanity of the company.
- Be true to your brand. Coca-Cola was very open about the importance to some customers of the precise taste and formulation of its core heritage brand Coca-Cola Classic. It was bold enough to state that for that particular product, it did not plan to reformulate, but was very clear about the cost implications of the new tax to consumers.
- Do not patronise. Acknowledgement of the importance of offering customers healthy choices and clear information to help them make those choices is essential. It is important to treat consumers as individuals with the ability to make their own decisions, whilst being responsible in their product promotion.
- Make information accessible, don’t just play lip service. Some companies appear to be side-stepping the issue by making information available ‘if asked’. This approach could be perceived as evasive or even obstructive.
Overall, it is clear that the coming years are going to be challenging for the food and drink sector, so communicators would do well to take this time to prepare. In particular, taking an integrated approach and working closely with the innovation and marketing teams to understand what could be coming and how best to tackle it together, to ensure one consistent message. It is important to remember that for many consumers, the product itself is their main point of contact with the company.
Communicators will need to think through the company’s stance/response and how this fits within its wider nutrition strategies, product information, and corporate messaging. Now could be the time to sound out critical friends and test potential approaches via stakeholder research to gauge likely reactions – outlining measures taken to date and investigating stakeholders’ expectations on what more the company should be doing to pre-empt legislation. From the experience of the gender pay gap legislation, although not without its risks, the approach of getting your point of view out early can signal a company’s willingness to get to grips with the issue and help steer the debate.