The Ethics of Selling Less
I’m just back from speaking at a terrific conference in New York on Corporate Citizenship, sponsored by The Economist. The panel I was on included senior executives from both Coca-Cola and Procter & Gamble. During Q&A, I kept hoping someone in the audience would ask a particular question that was on my own mind. Both of those companies face one particular challenge: they both produce at least one product that, socially, we’d like them to sell less of. The world would be a better place if less sugary cola was consumed, and the Pampers brand diapers made by P&G are currently being archived for eternity in our landfills. There’s a hard ethical problem there, especially for Coca-Cola: their product is arguably perfectly harmless when consumed in moderation, but many people don’t consume it in moderation. Coke knows that. They’re helping feed the obesity epidemic — but they’re also selling something that many people enjoy in very safe moderation. But if colas (and other sugary drinks) are feeding the obesity epidemic, their contribution to that epidemic varies only in degree from other kinds of foods and beverages that are subject to over-use. If it’s wrong to sell cola, then it’s arguably also wrong to sell ice cream, chocolate cake, and (gasp!) wine. All of those have plenty of calories, and all of them can make you fat.
As it happens, here’s a related story from just 2 days ago, by Bruce Horovitz, for USA Today: Pepsi is dropping out of schools worldwide by 2012
The iPod Generation will get a global lesson in healthier beverages from an unlikely source: Pepsi.
PepsiCo on Tuesday announced plans to voluntarily remove high-calorie sweetened drinks from schools for kids up to age 18 in more than 200 countries by 2012. Coke and Pepsi agreed to stop selling sugary drinks in U.S. schools in 2006….
Whether the product in question is food or something else, marketing to kids is arguably “low-hanging fruit,” ethically. It’s relatively clear that (most?) young people are less-able to make good dietary decisions than are (most?) adults. Add to that two special features of teens in particular. First, they famously think they’re indestructible, so they’re unlikely to be scared off by warnings that a product is unhealthy for them. And second, they’re in the process of forming patterns of food consumption that are likely to be with them for life. So it’s pretty easy to make an argument that it’s especially socially irresponsible to market sugary drinks to kids & teens.
Now, I’m sure some people wish Coke & Pepsi would both go farther, and restrict their marketing even more. But maybe by taking their beverages out of schools, these companies are aiming at a kind of compromise. Maybe this kind of decision on the part of Pepsi is analogous to the kind of behaviour we all ought to exercise in our own consumption of sweetened drinks: not utter abstinence, but a reasonable degree of moderation.
The Business Ethics Blog 
Call me a cynic.
Pepsi is not selling less of their products. They’re just replacing the high calorie with the low calorie. I would assume their hope is that the kids will become long term consumers of their product. They are not advocating moderation. They are merely substituting products.
They were also facing the possibility of being thrown out altogether.
I’m not sure there is much of an ethical decision. They are making a small change with little up-front or continuing cost and hoping for the same outcome.
Chris, those are great observations and I was wondering the same things as I observed the panel. Yet another area far from black and white, but with a large spectrum of perspective in between. I actually wondered why the Coke representative didn’t mention details on his “choice” theme — Coke actually does produce some healthy beverages, including Odwalla and Minute Maid juices.
Thanks for an interesting panel and nice meeting you there afterwards.
Hi, thanks for this interesting post. Did Coca Cola and P&G have a difficult time answering questions on this topic? Do you feel they have the right strategy in place to deal with these issues? I think it’s extremely difficult to manage this internally. It’s most likely that the commercial people receive their bonus based sales volumes.
Regards,
Sandra
Doug:
OK, you’re a cynic! 😉
No, seriously, you make a good point. We don’t know the full details (or I don’t, at least) and so I’m not ready to hand out any gold medals, here. But that’s partly why I referred to this as ethical “low-hanging fruit”. It’s not a terribly tough decision, both because its kids involved and because it’s not like these companies are making any enormous sacrifices.
But still, I’d be cautious about impugning their motives. For one thing, there may be an enormous range of motives within each company. I suspect at least some insiders really do want to do this because it’s the right thing to do. It’s not necessarily saintly behaviour, but low-calorie drinks are at least better than high-calorie ones, generally.
Chris.
Perry:
Good meeting you, too.
I’m not sure why Coke chose to highlight the things it did, and to leave out other things. I guess having a VP there, instead of someone with direct responsibility for corporate citizenship / CSR, involves some tradeoffs.
Sandra:
They weren’t really asked about this topic. But Jeffrey Hollender (co-founder of Seventh Generation) did ask them about their biggest social-responsibility regrets — things they hadn’t been able to achieve, and neither seemed very ready for that question.
Chris
In energy, companies such as EnerNOC are making a great living and being called “the Google of energy savings” by helping companies use less energy. Yet in food and beverage, there’s no model, other than Slimfast, for companies to help people use less. Other than outlawing enjoyment, as Singapore does with chewing gum, what mechanisms might there be to help people use less of a yummy treat like a Pepsi? In my experience, just saying someone “should” do this or that is completely useless. Thoughts?
Jay:
Thanks for your comment.
I think there *are* companies doing in food roughly what EnerNOC is doing in energy. Diet Pepsi and Coke Zero are examples. A company helping save energy is going to try to show you how to get the same benefits with less inputs. That’s the goal of reduced- or zero-calorie colas too, isn’t it? They’re “energy efficient” yummy treats, if you will.
Chris.
[…] few months ago, I blogged (on my Business Ethics Blog) about a decision by PepsiCo to voluntarily stop selling sugary drinks in schools by 2012. Now […]
[…] months ago, I posted about Pepsi promising to stop selling its sugary drinks to kids at school (see The Ethics of Selling Less.) I pointed out that there’s a significant problem for a company that sells a product that, […]
Hi!
I am not very sure about the ethicality of offering low calorie drinks till we are sure abou the ingredients.
My knowledge about Diet Pepsi & diet coke leads one to
suspect that aspartame may be used in which case it is a real health hazard. May be these drinks should then carry the warning that “Aspartame is used” so that consumers make informed choice when they buy these drinks.