Pursuing purpose beyond profit is becoming paramount for brands looking to shift towards more sustainable, responsible business practices and maintain a competitive edge, the proof of which is evidenced by the Campbell Soup Company's withdrawal from the Grocery Manufacturers Association (GMA) late last week. The company will sever ties with the trade group, which represents the food and beverage industry, at the end of 2017.
According to Campbell's CEO Denise Morrison, the decision was “driven by purpose and principles” and largely stems from GMA’s stance on GMO labeling. Under Morrison’s guidance, Campbell’s has been repositioning itself as a leading health and well-being food company as consumers — particularly millennials — are increasingly interested in where their food comes from and how it’s produced, a transition which has seen product transparency take on an increasingly important role.
In 2016, Campbell became the first major company to disclose information about which of its products contained genetically modified ingredients by printing it on the label and has since supported efforts to make such labeling mandatory. While GMA has backed the SmartLabel project, which provides consumers with extensive information about a product — including if it contains GMOs — by scanning a QR code on the package, Campbell’s views the group as being resistant to change and more aligned with business interests rather than consumer needs.
“When people look for something real to eat and something that tastes good, they’re going to look for the food we make. We chose this path not because it’s expedient, but because we believe it represents the future of the food industry and that it will lead to differentiated performance,” Morrison told investors at the company's annual meeting last week.
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“The GMA has grown over the past few years more as a lobbying and regulatory association dealing with a lot of the regulatory issues in the food industry. What we have experienced is finding ourselves at odds with some of the positions. … It’s comprised of mostly very large food companies and not a lot of small companies and our philosophy seemed to be aligning more with the smaller food companies.”
“We are always sorry when a member company decides to leave our trade association, which happens from time to time for a range of reasons. In 2017, the Grocery Manufacturers Association has gained new members of all sizes from throughout the industry. They tell us they are joining GMA because they want to be part of our work committed to consumer transparency, sustainability, food safety, nutrition and retailer collaboration," Roger Lowe, EVP of Strategic Communications at GMA, told Sustainable Brands in an email. "It was GMA’s leadership that helped achieve passage in 2016 of a national standard for GMO disclosure. We supported an option that can provide consumers more information about GMOs than could ever fit on a label. Today, our consumer transparency tool, SmartLabel, is being widely adopted, with nearly 10,000 products already using SmartLabel and 30,000 products expected by the end of 2017. In addition, it was GMA's leadership working with the Food Marketing Institute that created common wording for product code dating to reduce consumer confusion and food waste. We will miss Campbell’s participation and wish them well.”
The food industry is changing at an unprecedented rate and this move from Campbell’s could serve to further accelerate the paradigm shift taking place. The company is also moving ahead with plans to meet the original July 2018 compliance deadline for the Food and Drug Administration’s new Nutrition Facts panel, despite a delay in the timeline, which was applauded by the GMA on behalf of member companies. The group said that the deadline “was virtually impossible to meet without the needed final guidance” from the FDA.
“In this environment, companies and brands must differentiate themselves or risk extinction,” Morrison said.
The impact of Campbell’s departure from the GMA is still unclear, but it demonstrates a growing divide between private companies and the organizations that represent the interests of an industry as a whole — a trend that has infiltrated the tech, utilities, consumer goods and apparel industries, as well.
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Published Jul 24, 2017 8am EDT / 5am PDT / 1pm BST / 2pm CEST