New Name, New Challenges
March 1, 2005
New Name, New Challenges
By JENNIFER KOROLISHIN
American Beverage Association takes fresh approach to challenging issues
The notion of a “soft drink” has evolved dramatically over the past few decades. Once governed exclusively by colas, the soft drink world now encompasses everything from traditional products to sports drinks, bottled waters, teas and juices in hundreds of new flavors, manufactured by a range of beverage companies.
Accordingly, the National Soft Drink Association was recently rechristened the American Beverage Association (ABA) to reflect the reality of today’s market, and to better position the organization to take on new challenges.
“Over time, we began to represent a much broader portfolio because our members began to manufacture and distribute waters, sports drinks, juices, teas and dairy-based beverages,” says Kathleen Dezio, ABA vice president of communications. “Then we began to work on a lot of different issues that relate to those other products, and our members wanted our name to reflect the broader array of beverages our companies make.”
The new name also reflects the growth of the Washington, D.C.-based association. Originally founded as a bottler organization, ABA’s membership now includes parent beverage companies such as industry giants Coca-Cola, Pepsi-Cola and Cadbury Schweppes Americas Beverages. These franchise companies were previously involved in the association as non-members, providing funding for various scientific, regulatory and legislative initiatives. However, after a period of industry consolidation in the mid-1990s, the parent companies came into the organization, giving its membership a broader scope. Its membership also includes industry suppliers that manufacture and sell products and services such as packaging, machinery, equipment and ingredients.
Members proved to be the driving force behind the association’s name change. ABA conducted focus groups with a sample of members and found that, for the most part, everyone recognized the need for a change and supported the move.
“The last time we changed our name was in 1966 when Coke had half a dozen brands and Pepsi had four or so,” says Dezio. “If you go to the Coke, Pepsi or Cadbury Schweppes Web sites today, you will see 50 to 100 brands listed in North America alone. That illustrates the explosion of choice these companies have made available in recent years.”
Beverages and the obesity/nutrition debate
ABA’s name change and rebranding effort comes at a time when the majority of the association’s resources are devoted to defending member companies’ products from attack. As the national debate over nutrition and obesity rages, soft drinks have been cast in a harsh light; much of this traces back to the 1998 Center for Science in the Public Interest report, “Liquid Candy: How Soft Drinks Are Harming Americans’ Health,” which charged that soft drinks contribute to poor nutrition among children and teens.
Since then, CSPI and other groups have sought to restrict the sale of soft drinks in schools as part of a larger effort to combat the growing problem of childhood obesity and related health issues.
“The obesity issue has heated up on a much broader scale over the years, and as a result, attacks are now common on restaurants and on many different types of foods and beverages, not just soft drinks,” says ABA Acting President Jim Finkelstein. “Our national polling shows that concern about obesity, especially in children, takes precedence over almost every other health issue and over many other non-health issues. Our goal is to make sure the discussion doesn’t become irrational and is balanced, fair and scientifically based instead of ideologically driven.”
To that end, ABA’s scientific affairs staff works with member company scientists to develop response strategies and to determine funding for scientific research. The association provides non-restricted grants to universities and other institutions for independent studies that explore questions about beverage and ingredient health issues in a science-based, factual way.
“Our companies are unified in wanting to take a leadership role in obesity/nutrition issues,” says Finkelstein. “In concert with our member companies, the association is working hard to ensure that our program is increasingly effective in addressing these issues.”
Even the association’s recent name change factors into the nutrition debate. As Dezio notes, despite what often seems like a media onslaught, there is still generally high regard for the industry. However, many in the media and the general public don’t realize that today’s soft drink companies also manufacture and distribute a wide variety of beverages beyond traditional colas, including bottled water, juice, juice drinks, teas, sports drinks and dairy-based beverages.
“To its credit, this industry has put a lot of money into supporting independent, solid scientific research whenever any questions arise about its products. Our member companies have also diversified their products to follow changing consumer needs and interest,” says Dezio. “As a result, consumers have more choices than ever before. Whether you’re talking about new choices for children or more choices for consumers battling weight issues or choices for people struggling with diabetes, there are all kinds of beverage products from which to choose today. However, that message isn’t out in the way that it ought to be.”
To enhance ABA’s ability to respond to attacks on the beverage industry, Dezio heads the association’s rapid-response team, situated in a new media center in the association’s Washington headquarters. Her team is responsible for coordinating with member companies, state associations and others on both offensive and defensive industry communication efforts.
Tracking national and local issues
Nutrition isn’t the only issue on ABA’s agenda. While it plays a key role in obesity and nutrition issues, the association’s federal affairs division also works on a host of regulatory and legislative issues affecting industry operations at all levels, from plants to corporate.
This year, ABA is focused on labeling uniformity as a key issue. While the Food and Drug Administration sets national labeling requirements for beverages and other food products, there is nothing in place to prevent individual states from requiring additional labeling, which can be troublesome for beverage companies that distribute products across state lines. ABA is working to persuade Congress to institute labeling uniformity, with FDA as the sole authority nationwide.
“Uniformity would ensure that we don’t have a crazy quilt of labeling requirements in every state across the country,” says Finkelstein. “FDA’s labeling decisions should be the final word across the nation, preempting state labeling initiatives.”
Environmental issues are also at the forefront of ABA’s efforts. The association works with its member companies to encourage recycling and reduce litter. Because the beverage industry generates numerous “empties” in the form of aluminum cans, glass and PET bottles, ABA members pledge to use recycled or reusable packaging, to design packaging for optimum recyclability, and to educate consumers on proper waste management.
In an effort to encourage recycling, some states have instituted deposit programs, which place a pre-paid fee on certain beverage containers, requiring consumers to return the containers to designated locations to reclaim the fee. ABA and its members are opposed to deposit programs (also known as “bottle bills”) on the grounds that comprehensive recycling programs are more effective at controlling solid waste, and that deposits amount to a “hidden tax” on businesses and consumers.
ABA’s state government affairs team works closely with members on nutrition, recycling and myriad other issues, and supports state associations around the country in their work on local issues affecting the industry.
“We never lose sight of our legislative responsibilities both federally and in the states,” says Finkelstein. “Obesity and other issues are bigger issues in the states than in Washington, and they’re tougher to fight in the states because you’re dealing with 50 legislatures and maybe 10,000 school boards.”
To carry out its mission, ABA has a Washington-based staff of 34. Its 20-member board includes representatives from Coca-Cola, Pepsi-Cola and Cadbury Schweppes Americas Beverages as well as smaller beverage companies, and is headed by Ralph D. Crowley, president and chief executive officer of Massachusetts- based Polar Beverages.
The ABA Board plays a hands-on role in critical association functions. One of its current priorities is to appoint a new association president to replace longtime president William L. Ball III. The presidential search is on a fast track, with industry executives hoping to name a new chief in the near future.
“Board committees drill down into the details on issues. The budget and finance committee is crucial because it oversees and approves budgets and expenditures,” says Finkelstein. “The larger board is more strategic in its thinking and takes a broad view in deciding what direction to take on major issues. We also involve industry professionals who are not board members, who bring their expertise to the table, particularly in scientific and regulatory affairs. That helps us to capitalize on the capabilities within the companies and throughout the industry.”
Regardless of the issue, armed with a new name, a new outlook and the broad support of its members, the American Beverage Association appears ready for the challenge. BI