• by Karlene Lukovitz , May 22, 2008

The International Council of Beverages Associations' (ICBA) announcement of new guidelines on marketing beverages to children is another significant step forward for the industry on the issue of childhood obesity--or not, depending on who is being asked.

The guidelines essentially extend self-regulatory guidelines that are already in place in the U.S. through the Children's Food and Beverage Advertising Initiative (CFBAI) to the international arena, and also extend the scope of the self-regulation.

Under the CFBAI, launched in November 2006 and administered by the Council of Better Business Bureaus (CBBB), participating companies agreed to devote at least 50% of their advertising directed to children under 12 to promote healthier dietary choices and/or to messages that encourage good nutrition and healthier lifestyles. Healthier-product pledges must be consistent with established scientific and/or government standards, including USDA Dietary Guidelines and MyPyramid, as well as FDA standards for health claims. Each company participating created its own pledge describing the specific terms of its commitment, in part to reflect a company's specific product line.

Companies also agreed to incorporate healthier choices within their product lines; not engage in food/beverage product placement in editorial and entertainment content geared to children; reduce the use of third party-licensed characters in advertising that does not meet the Initiative's product or messaging criteria; limit products shown in interactive games to healthy dietary choices or incorporate healthy lifestyle messages in the games; and not advertise food/beverages in elementary schools.

The 13 companies that signed on (Burger King, Cadbury Adams USA, Campbell Soup, The Coca-Cola Company, ConAgra Foods, General Mills, The Hershey Company, Kellogg Company, Kraft Foods Inc., Mars, Inc., McDonald's USA, PepsiCo, Inc. and Unilever US) were estimated to have accounted for more than two-thirds of children's food and beverage television advertising expenditures as of 2004.

Under the ICBA guidelines, member beverage companies voluntarily agree not to place any marketing communication/advertising for a wide range of beverages--including carbonated soft drinks--in any paid, third-party media whose audience consists of 50% or more children under the age of 12. The policy includes paid media outlets such as TV, radio, print, Internet, phone messaging and cinema, including product placements. Waters, juices and dairy-based beverages are not included, because not all ICBA members market these.

The guidelines were developed within the framework of the F&B industry's wider commitment to collaborate with the World Health Organization to implement the 2004 WHO Global Strategy on Diet.

Coca-Cola and PepsiCo have announced that they will implement the ICBA guidelines throughout the world by the end of this year. According to its Web site, in addition to its CFBAI pledge, Coke already had a global policy prohibiting marketing full-sugar beverages on television programs viewed primarily by children. The company has also said that it will review other forms of marketing practices, such as use of licensed characters and sponsorships, in schools and other channels involving children under 12. PepsiCo's CFBAI pledge calls for all advertising directed primarily to children under 12 to feature Smart Spot products, which are products that meet or exceed CFBAI's nutrition standards.

'Enormous Progress' Or Mainly Window Dressing?
Dan Jaffe, EVP for the Washington, D.C., office of the Association of National Advertisers, calls the ICBA and CFBAI initiatives "the most extensive self-regulatory steps ever taken within the food and beverage industry," and perhaps in any category.

He also stresses that these are part of "much broader" industry efforts to address the challenge of childhood obesity, including greatly expanding the range of healthier products offered. For example, he points to a Grocery Manufacturers Association member survey that found that marketers had added over 10,000 new and reformulated products in recent years to address nutrition and calories issues, and to the Ad Council's extensive public service advertising to promote education about nutrition.

"We are far from declaring victory, but the industry has made enormous progress over the past four to five years," Jaffe says. "Childhood obesity is clearly a multi-causal problem. The industry is taking very substantive steps to address it, but it cannot solve it alone. Other groups, and the government, also need to be involved in education and health-oriented programs-and increasingly, they are."

Indeed, the FTC is currently conducting a study on all methods of marketing foods and beverages to children and adolescents, expected to be released by summer or early fall. The study is delving into types of food marketed; the types and nature of marketing techniques used; marketing expenditures; and any marketing policies, initiatives, or research in effect or undertaken by food and beverage companies.

The study aims to investigate not only traditional media, but movie theater/video/video game advertising; company-sponsored Internet sites; other Internet advertising; other digital advertising; in-store advertising and promotions; specialty item or premium distributions; public entertainment events; product placements; character licensing and cross-promotions; sponsorships of sports teams or individual athletes; packaging and labeling; word-of-mouth marketing; viral marketing; celebrity endorsements; in-school marketing; advertising in conjunction with philanthropic endeavors; and other marketing expenditures.

Manufacturers are, of course, being debriefed on all of this. Meanwhile, the Washington Post just ran a five-part series on childhood obesity.

Children's activist groups like the Campaign for a Commercial-Free Childhood maintain that the increasing pressures from the government and the public, and the threat of lawsuits, are the main motivators behind industry guidelines.

These groups also express the same basic criticisms about the ICBA guidelines that they did about the CFBAI guidelines. Namely, that self-regulation isn't working and that formal, regulatory oversight is needed, because marketers simply find ways outside of the guidelines to reach children. For example, marketers' own Web sites do not fall under the guidelines-and of course, large numbers of children watch many shows that also do not fall under the guidelines.

"It's very hard to distinguish that line of who under the age of 12 is going to be viewing a TV show or other marketing channel," points out Laura Ries, partner in branding consultancy Ries & Ries. "On face value, it's of course good to say that you're not targeting kids. But the guidelines are effectively vague, and companies like Coke and Pepsi weren't advertising on shows that are geared specifically to kids anyway, like cartoons. Many kids obviously watch the comedies and the Super Bowl and just about everything else, including "American Idol," Coke's biggest marketing venue. Childhood obesity is a major problem, but it's hard to see how these kinds of guidelines are going to make a big difference."

On the other hand, Ries says she would be very leery of any governmental effort to ban advertising and marketing of food, beverages or for that matter, most other products. "That is a slippery slope," she says. "This is America, and these are not deadly products, like cigarettes. Companies need to be socially aware, and increasingly, they are. They're getting called out and experiencing bad PR when they cross the line, and that's the last thing they want, so they're changing their behavior.

"Companies get into trouble areas when they start marketing products in schools, and as a parent and branding professional, I have to wonder what Coke is thinking when they do commercials showing families passing around big-liter bottles of Coke at dinnertime. But I can't see how you can argue against being able to market on something like 'American Idol.'

"It's complex," Ries continues. "For instance, who decides what's healthy? Can an occasional piece of cake be part of a healthy lifestyle? Of course. Do we really want to try to tell high school kids that they can't choose to have an occasional can of soda? Who makes these decisions? The reality is that we are all constantly exposed to temptations that aren't necessarily the healthiest, and not only through advertising. There's a big element of parental control and educating your kids about healthy lifestyles and advertising influences."

In response to questions about the 50% under-12 audience demographic threshold and other limitations of self-regulatory guidelines, major beverage marketers have made similar points.

For instance, after the CFBAI guidelines were announced, a Coke spokesperson told ABC News that "Coca-Cola respects the sanctity of childhood and the role parents play in raising their children and determining what they eat and watch. Media buys are made on the basis of brand strategy ...that has 50 percent or more adults [as an audience]. For every child that gets exposed, there is an adult present. If they as a family are involved in a certain media and they expose children, that's a decision they are making for their family. It's about intent, not exposure."

Meanwhile, studies of advertising to kids for F&B and other products continue to proliferate. There's the recent Stanford study on the "Effects of Fast Food Branding on Young Children's Taste Preferences," which found that children as young as three differentiate between brands ... and that 75% of children had toys from McDonald's in their homes.

But there's also the FTC study that found that found that, as of 2004, children were actually being exposed to fewer paid ads and fewer minutes of TV advertising than in 1977-and that their exposure to food ads, in particular, was no more extensive than in the past. (Food ads accounted for 22% of total TV ads viewed by children.) Still, the study also found that children get about half of their food advertising and about a third of their total television advertising exposure from programs for which children represent at least 50% of the audience.

There's also the basic reality that sheer market dynamics continue to push beverage manufacturers to shift focus toward beverages other than carbonated sodas. Less marketing to children may well be "inevitable anyway," observes Harry Balzer, VP, The NPD Group. "Carbonated soda consumption by young people has been trending down for some time."

In fact, according to NPD data, the average U.S. child 12 and under consumed 134 carbonated soft drinks in 1998, but just 79 last year-a 41% drop.

Nevertheless, beverage and food manufacturers and fast-food restaurants know they can count on increasing media visibility for kids' nutrition issues, including a major round of coverage and public debate following the release of the FTC's new study later this year.