Soda Marketers To Reduce School Sales

American Beverage Association:

Under the new policy, the beverage industry will provide:

• Elementary Schools with only water and 100 percent juice.
• Middle Schools with only nutritious and/or lower calorie beverages, such as water, 100 percent juice, sports drinks, no-calorie soft drinks, and low-calorie juice drinks. No full-calorie soft drinks or full-calorie juice drinks with five percent or less juice until after school; and
• High Schools with a variety of beverage choices, such as bottled water, 100 percent juice, sports drinks, and juice drinks. No more than 50 percent of the vending selections will be soft drinks.

The American Beverage Association is asking beverage producers and school districts to implement the new policy as soon as possible. Where school beverage contracts already exist, the policy would be implemented when the contract expires or earlier if both parties agree. The success of the policy is dependent on voluntary implementation of it by individual beverage companies and by school officials. The policy will not supercede federal, state and local regulations already in place. ABA’s Board of Directors, which unanimously approved the policy, represents 20 companies that comprise approximately 85 percent of school vending beverage sales by bottlers.

Childhood obesity is a serious problem in the U.S., and the responsibility for finding common-sense solutions is shared by everyone, including our industry. We intend to be part of the solution by increasing the availability of lower-calorie and/or nutritious beverages in schools,” said Susan K. Neely, ABA president and chief executive officer.

Pepsi Statement | Coke Statement (not yet online). Betsy McKay has more (click the link below).

Betsy McKay:

Under mounting pressure from health advocates and parents, Coca-Cola Co., PepsiCo Inc. and other beverage marketers plan to announce today a set of voluntary restrictions to limit sales of their drinks in schools.

Under new industry guidelines, to be announced at a meeting of state legislators in Seattle and later in full-page ads in several national newspapers, the companies eventually will halt all sales of carbonated soft drinks in elementary schools and remove all sugared drinks from middle schools during school hours. The new policy applies only to new contracts, not existing ones, meaning that it could take several years for the restrictions to catch up with many schools.

The guidelines still permit sales of all drinks in middle schools after the school day, and allow sales of diet soft drinks, sports drinks, low-calorie juice drinks, juices and water all day. No beverages are banned from high schools, but the association is recommending that at least half of vending-machine slots in those schools be allocated to noncarbonated beverages such as juice and water.

Beverage-industry leaders say the new guidelines should appease the growing chorus of critics who blame soft-drink sellers for rising obesity among U.S. children, while still protecting the industry's financial interests in marketing to young people.

"The societal debate is about how to solve childhood obesity," said Susan Neely, president and chief executive of the American Beverage Association, an industry group. "This policy is on target with what parents want and what the objective is."

Industry officials concede the new restrictions are a somewhat watered-down version of a proposal that beverage companies have been debating all summer. Some industry representatives originally advocated removing soft drinks altogether from middle schools during school hours.

But according to people familiar with the negotiations, the ABA's board of directors returned that proposal, arguing that diet drinks -- which represent a huge and growing segment of their business -- don't pose a concern for childhood obesity.

"We put a lot of work into crafting these industrywide guidelines," said Don Knauss, president of Coke's North American operations. "We will offer our strong endorsement."

"Parents tell us they'd like help in determining what products are sold in schools, and we're listening," said Dawn Hudson, president and chief executive officer, Pepsi-Cola North America. She adds that Pepsi is also "providing incentives to our bottlers that will encourage compliance with the new policy."

Once viewed as benevolent American icons, the soda giants have become lightning rods for critics who blame them for the growing number of overweight kids and teens. Since 2003, at least six state legislatures have voted to restrict the sale of soft drinks in schools. At least 38 states have proposed bills this year to improve the quality of school nutrition, and 15 of those bills have been enacted, according to the National Conference of State Legislatures, a Washington group representing the interests of state governments.

A nutrition-advocacy group, the Center for Science in the Public Interest, has been pressuring the Food and Drug Administration to slap tobacco-style warning labels on sodas and fruit drinks. And plaintiffs' lawyers are circling, raising the specter of litigation reminiscent of the courtroom battles that cost cigarette makers billions of dollars.

The new school approach is the first salvo in a broader public-relations counterattack by beverage companies to help the industry reverse its tarnished image. To lead that charge, the trade group tapped Ms. Neely in May to run the organization.

The creator of the "Harry and Louise" ads that helped torpedo President Clinton's health-care plan in the early 1990s and a veteran of Washington political battles, Ms. Neely is working on a multimillion-dollar advertising and PR campaign to show that the beverage industry derives a substantial portion of its sales and growth from healthier beverages.

Details of the new marketing push aren't being disclosed, but it will resemble industrywide campaigns launched in recent years to enhance the image of the plastics and pharmaceutical industries, said Ms. Neely. "I think you have an expectation that the biggest brands in the world will step up to the plate and help society grapple with problems," she said. "You have to have an industry voice."

Appeasing critics while protecting the industry's interests won't be easy. While it will cut some sales of regular soda to preteens, the new school policy doesn't entirely remove soda from schools, as some advocacy groups have wanted.

The guidelines aren't mandatory or enforceable, although ABA members say they plan to adhere to them. Companies represented on the association's board account for 85% of all school beverage sales, Ms. Neely said.

Some industry critics said they wondered how widely the new policy will be observed. Decisions on what beverages will be sold are often up to the schools themselves. "It's a good publicity ploy," said Lucy Nolan, executive director of End Hunger Connecticut! Inc., an advocacy group that campaigned unsuccessfully for restrictions on school soft drink sales in that state. "But what's the incentive to follow it?"

Whether existing contracts between beverage producers and schools will be amended to incorporate the new ABA policy remains to be seen. While Coke and Pepsi's biggest bottlers said they will implement the new policy, they noted that any changes in the beverages they supply are also up to the schools.

Coca-Cola Enterprises Inc. the world's largest soft drink bottler, said that for the 2005-2006 school year, it had already planned to sell only water and 100% juice to elementary schools, and to allocate half of vending machine slots in high schools to noncarbonated drinks.

"We will be engaging in dialogue with our school customers to encourage them to adopt the ABA policy," said John Downs, CCE's senior vice president for public affairs and communications.

The big bottler, which supplies Coke products to 80% of U.S. markets, said it plans to send a note to its sales teams and bottling facilities to ask them to implement the new policy immediately.

Posted by Jim Zellmer at August 17, 2005 9:43 AM
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