Mexico is the perfect example of how Coke and Pepsi are investing heavily in the next generation of soda drinkers, and the country has the highest rates of obesity in the world.
As their sales ebb in the United States, Coca-Cola and PepsiCo have borrowed tactics from Big Tobacco by looking to developing nations for new customers, according to a report released today by the Center for Science in the Public Interest (CSPI).
The trend is driving up global rates of obesity, diabetes, heart disease, tooth decay, which are overwhelming health systems in nations with rapid population growth, according to the report, “Carbonating the World.”
CSPI found that Coca-Cola has invested $12.4 billion in Mexico, which leads the world in obesity. Other investments include $7.6 billion in Brazil, $17 billion in the African continent, $4 billion in China, $5 billion in India, and $1.2 billion in the Philippines, according to the report.
In 2013, Mexico had the highest per capita soda consumption in the world at 135 liters, according to CSPI. The nation ranks high in type 2 diabetes, and 4th in childhood obesity. CSPI found that between 1999 and 2006, calories consumed from soft drinks doubled in some age groups and tripled in others, while the Mexican bottling division of Coca-Cola doubled revenues in the 5-year period between 2008 and 2013.
Overseas investments from the 2 soda giants come as US consumption has declined 25% between 1998 and 2014. Rates of diabetes and childhood obesity that had been rising for years appear to be leveling off, based on recent research.
In December, the CDC confirmed the first decline in new diabetes cases over a 5-year period in a generation. In February 2014, CDC reported that the obesity rate for children ages 2 to 5 had dropped 43% in the previous decade.
Mexico, meanwhile, has tried to curb soda consumption. The country passed a soda tax that reportedly led to a 6% drop in sales in its first year; however, the industry has pushed for a rollback of a portion of the tax. This occurred as Coca-Cola plans an $8.2 billion investment through 2020, and PepsiCo plans to invest $5 billion (that company also makes snacks and other foods), according to the CSPI study.
Both Coke and Pepsi have made promises to avoid marketing to children, but today’s report found numerous loopholes. CSPI identified multiple examples of how using young celebrities and even Barbie makes it clear that the companies seek to lure a new generation of soda drinkers. This mirrors how cigarette manufacturers behaved when anti-tobacco efforts took hold in this country, according to CSPI President Michael F. Jacobson, PhD, co-author of the report.
“When cigarette sales sagged in the United States and in other countries with robust tobacco control programs, the industry quickly pivoted to the developing world to maintain its profits,” Jacobson said in a release from CSPI. “The soda industry is finding that the same strategies work well to sell soda. These are countries with growing populations, growing incomes, and with governments less likely to pursue aggressive strategies to deter consumption.”
Late today, the International Council of Beverages Associations (ICBA) issued a response to the report, calling beverage companies "good global citizens" who provide jobs and tax dollars to support government programs in developing nations. ICBA did not cite any factual errors in the report but said it "ignores the economic importance of jobs and the investments beverage companies bring to hundreds of thousands of employees and their families."
The ICBA took particular exception to the claims about marketing to children, saying that its guidelines on "have transformed the landscape of children's advertising, ensuring parents and caregivers are better able to determine what beverages are appropriate for their children." The guidelines bar marketing where more than 35% of the audience consists of children under age 12, and the ICBA said that tests show 94% compliance in every market.
However, the CSPI report is consistent with findings of nutrition expert Marion Nestle, PhD, whose 2015 book, "Soda Politics," also discussed a trend toward global marketing. Like CSPI, Nestle has compared the strategies of the soda giants with Big Tobacco.
The report was released the same day that Coca-Cola announced its 2015 fourth-quarter earnings, which came in at 38 cents a share, beating estimates of 37 cents a share. Global volume of the trademark Coke was up 1%, with Sprite up 3% and 7% for Coke Zero (which has no calories). Larger volume gains for seen for Dasani and Smartwater brands (8%).
According to TheStreet, between concerns about calories in sugary drinks and aspartame in some diet drinks, Big Soda is in a bind. The report quoted Beverage Digest’s Duane Stanford, who wrote recently, “Last year marked the 10th in a row that volume sales of major no-calorie soda brands like Diet Coke and Diet Pepsi declined, according to full-year 2015 retail sales results—as health remains a major influence on consumer buying decisions.”
CSPI called on the World Health Organization and individual counties to take more vigorous steps to combat the effects of intense overseas marketing, especially to children. The report said countries should:
· Instruct health ministries to focus on improved nutrition and restrict sugar content to about one-fourth of current levels.
· Pass excise taxes on sugar-sweetened beverages that would raise prices at least 10% and use the revenue for health programs.
· Bar advertising aimed at children in all forms, including campaigns on the Internet, mobile media, and packaging.
· Limit or ban sugar drinks on government property.
· Improve product labeling (Ecuador and Chile were cited as good examples).
· Require warning labels on sugar drink labels and advertising. A recent study showed this may be an effective method to curtail consumption without running into the same level of political opposition as taxes.
· Bar sugary drinks on children’s restaurant menus and make free water available.
CSPI called on beverage companies to acknowledge the harm caused by full-calorie versions of their products, and stop marketing them to children under 12. The report makes several recommendations to reduce consumption, including:
· Limiting container size to 1.5 liters
· Putting notices on containers about adverse health effects
· Reducing calorie content to no more than 40 calories per 355 ml (12 ounces).
The report called on the WHO to vastly increase education and outreach efforts on regarding sugary drinks, including establishing a database of laws that discourage consumption. WHO should do everything from providing research and technical assistance to developing a treaty or non-binding legal instrument to “establish global standards on the labeling and marketing of sugar drinks and unhealthy foods.”
To begin, WHO should stop serving sugary drinks at its own headquarters in Geneva and during meetings and conferences, the report recommended. The WHO did just recently call for soda taxes to curb obesity rates.