[Image of: RetailWire Logo and Tagline (for print)]

BUSINESS TIPS

IRI:
Shopper-Centric Execution
ChannelAdvisor:
Online Selling Strategies
RR Donnelley:
In-Store Marketing
LoyaltyOne:
Enriching Customer Relationships
 
[15 comments]

NYC Soda Ban Scares Beverage World

September 17, 2012

New York last week became the first city in the nation to ban the sale at certain establishments of soda and other calorie-rich drinks in containers larger than 16 ounces.

The ban, which starts March 2013, covers restaurants, mobile food vendors (pushcarts and food trucks), concessions at stadiums and movie theaters, and delis/small grocers where more than 50 percent of sales are eat-in or eat-out. It exempts supermarkets, bodegas, c-stores and pharmacies because they are regulated by the state, not the city.

The ban extends to any non-alcoholic beverage with more than 25 calories per 8 ounces, including some sodas, coffees, teas, smoothies and lemonades. Exemptions were made for beverages made mostly of milk or unsweetened fruit juice. With 16.9 ounces a standard bottle size, many drink makers will have to slightly shrink their containers.

Having already spent more than $1 million on a public-relations campaign against the controversial plan, members of New Yorkers for Beverage Choices, a group financed by the soft drink industry, quickly announced they are exploring ways to challenge the Board of Health's ruling, including legal action.

Critics have pointed to a lack of scientific evidence that the ban will reduce obesity rates. Restaurants have wined that grocers and c-stores are being excluded. Infringements on personal liberties have been particularly played up, with ad copy from the beverage group reading, "If this now, what's next?" With the onslaught of ads, a New York Times poll last month found 60 percent of New Yorkers disapproved of the ban.

But Mayor Michael Bloomberg has noted that many law changes that seemed inconceivable are now widely accepted, including bans on lead-based paint and smoking in offices and restaurants. Reasons cited were rising obesity rates in low income neighborhoods and among children, as well as the city's heavy medical bill dealing with diabetes and heart disease.

Other cities may follow suit. With signs of progress in his other moves to get New Yorkers healthier, other cities have matched the NYC's bans on trans fats and smoking in bars. Last Wednesday, McDonald's began posting calorie counts on its menus nationwide following New York City's becoming the first city to do so in 2008.

"We were the first city to ban trans fats; we were one of the early cities to prohibit lead in paint," the city's health commissioner, Dr. Thomas A. Farley, told the New York Times. "You can understand why the industry feels the stakes are high here in New York City."

Discussion Questions:

Should the grocery and food industry join the beverage and restaurant industry in fighting the soda ban? How can food retailers be proactive in preparing for changes or restrictions due to rising obesity concerns?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What's the likelihood that similar soda bans will become widespread across U.S. cities over the next three to five years?

Comments:

The greater than 16 oz. ban is just bad law even if you eliminate all the discussion regarding the government interfering with the consumers' right to make their own decisions.

The way it reads, its okay to sell a large diet drink, but not a non-diet. How is that going to be policed? Are you going to ban cups larger than 16 ounces? That basically makes it difficult for the consumers to buy a "legal" size diet drink.

Most QSRs (Quick Serve Restaurants) have moved to a self-serve process for drinks. What is to stop someone from drinking one 16 ounce drink and getting a refill? Will it be okay to for the diet drinker, but not the non-diet?

Many restaurants have a free refill policy. Are waiters going to be able to refill the glasses of those that order a diet, but expect to refuse to refill a non-diet drinker's glass?

[Image of: View Braintrust Panelist button]
Steve Montgomery, President, b2b Solutions, LLC

Let's see ... hmmm ... should the grocery industry spend millions of dollars campaigning for the right of the foodservice industry to sell something the Mayor of America's largest city has deemed a health threat to its citizens ....

That's a tough one.

How about if the industry starts lobbying against bans against smoking in public places because it sells cigarettes? Or maybe starts an anti-DUI campaign because it sells beer?

No, I'm afraid my advice would be to sit this one out, unless of course anyone thinks it's a good idea to get the Mayor's office focused on the health benefits -- or lack thereof -- of products sold in supermarkets.

Like many legal/media/political issues, the ban doesn't make a good deal of sense. It's symbolic, and logic is a poor weapon against symbols.

You have to know when to pick your fights and, while this is a potentially big deal to foodservice operators, it is their fight, not the grocers'.

[Image of: View Braintrust Panelist button]
Ryan Mathews, Founder, ceo, Black Monk Consulting

Yes they should join the fight. Not suggesting obesity is not a problem, but government control of consumption is a totalitarian action not to be tolerated.

Down South here, we'd suggest arming yourselves to prepare for government intrusion. :-) Up North, not such a likely strategy -- get your lobbyists up and running.

[Image of: View Braintrust Panelist button]
Dr. Stephen Needel, Managing Partner, Advanced Simulations

A better policy for the soft drink industry would be to, sincerely, begin working with public health officials in reducing the sugar content of soft drinks. While Bloomberg's ban is radical, offensive, and begins to look like "Big Brother," obesity is in fact an issue, especially since an intense debate on health care is currently being carried on. Obesity drives up health care costs, and it makes tremendous sense to address it. And it is a natural extension of previous health-oriented ban that have been enacted. Perhaps a public awareness campaign might have been a less confrontational, but one thing is for sure, the NYC ban on Big Gulps has brought the role of sugary soft drinks in the obesity epidemic right up front in everyone face across the country. Even if this unevenly applied ban is struck down, that will likely be the lasting benefit.

[Image of: View Braintrust Panelist button]
Roy White, Editor-at-large, RetailWire

Steve -- lot's of loopholes here. Refills are allowed. A few articles also noted that people can just buy two sodas if they can't get a big one. Obviously, people can also buy any size they want at grocers or c-stores like 7-Eleven. Bloomberg's team had studies showing the likely benefits of just switching from 20 oz. to 16 oz. but to Ryan's point, the law seems largely symbolic.

[Image of: View Staff button]
Tom Ryan, Managing Editor, RetailWire

Everyone should join the fight against a ban that intrudes on a person's right to make their own decisions. Spend more on educating the consumer vs slapping them.

Focus on working with vendors to consider cuts in the sugar or repackage/re-price. This ban will fail. If someone really wants more of a favorite beverage they will buy two. Food sites will sell the big cup and do BOGOs on the medium size.

America -- fight for food freedom...no one will ever take all the Twinkies :>) (Zombies included).

[Image of: View Braintrust Panelist button]
Tom Redd, Vice President, Strategic Communications, SAP Global Retail Business Unit

There used to be a self-policing system for consumers -- it was the Coke bottle in the vending machine. When I was a kid, a quarter would buy you a 12-ounce, ice cold bottle of Coke. There was no money to buy a second drink. There was no giant drink option. Now stores and restaurants put out "cups" -- actually, small buckets -- for consumers to wallow in. You can argue the efficacy of this new rule, but give the mayor some points for trying to lower the city's health care expenses.

[Image of: View Braintrust Panelist button]
Cathy Hotka, Principal, Cathy Hotka & Associates

As I was reading Ryan Mathews' comments, I couldn't help but hear Kenny Rogers in the back of my mind "You've got to know when to hold 'em, know when to fold 'em, know when to walk away, know when to run."

It's the mayor's thing. It's not the grocery retailers' thing.

This is a fight worth running away from. That was hard to say. However, you have to know when to walk away and when to run. Walk or run, whatever your preference, but head in the other direction from a fight on this one.

Sell what you have. If you have 12, 16, 24 or even 44 oz. - Sell it. If you have only 12-16 oz. then sell that. This impacts the grocery retailer far less than the restaurant industry.

This is an issue that arguing its merits lacks any level of good sense. It's not about good sense. It's not about the evidence or reality. It's about "feeling good" and saying that you did something about it regardless of its value.

My advice to the restaurant industry is change your cup order and move on.

'Scanner'

Now hear this...THERE IS NO SODA BAN IN NYC. There is not even a ban on selling more than 16 ounces of soda. The only thing the law says is that the container can not be greater than 16 oz. People can buy two, or three, four or more 16 oz cups of soda. If it is self-serve, they can refill as much as they want. Further, retailers are welcome to have whatever specials they want on multiple 16 oz servings. "Buy one 16 oz for $2.49, buy two 16oz. for $2.99."

Be assured that the more than $1,000,000 spent on fighting this ban has NOTHING to do with freedom of choice and certainly nothing to do with the health of the population. It has everything to do with the profitability of the business. And also know that it is not the retailers that are the largest contributors to the New Yorkers for Beverage Choices, nor is it New Yorkers. It is the soft drink industry. And it is simply for their own benefit (and rightfully so).

This is about awareness. People have no idea what they are consuming and it is costing the city, state, country and all of us massive amounts of money. The magnitude of the obesity epidemic in the U.S. is greater than the annual flu scares, cancers, heart disease, et al. Yet, we react with a lot of rah-rah to take on these other epidemics. Obesity may be a right, but when it starts to cost the rest of us, it is beyond the individual. To me, the people's reaction should be "thank you for helping us understand."

[Image of: View Braintrust Panelist button]
Gene Detroyer, Professor, Independent

We are in an advanced state of war over whether a free people will govern their own individual actions, or whether a non-constitutional government (nanny state) will be allowed to destroy the engine of free enterprise -- personal choice. Continuing efforts to actively bankrupt the government by destroying the tax engine are part of the move to a leftist fiat government.

This is NOT an assault on the BEVERAGE business, it is an assault on BUSINESS, the engine of freedom.

[Image of: View Braintrust Panelist button]
Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

From Aetna Intellihealth:

Doctors and nutrition experts said the regulation's success or failure may depend on more than just the modest number of calories it might slash from people's diets. It will hinge on whether the first-in-the-nation rule starts a conversation that changes attitudes toward overeating.

"Ultimately it does come down to culture, and it comes down to taking some first steps," said Dr. Jeffrey Mechanick, a professor at the Mount Sinai School of Medicine who has studied the effect of government regulation on the obesity epidemic.

He likened it to the drumbeat about the dangers of smoking, which took decades to translate into results. "People talk about it. It gets ruminated at social parties. It gets ruminated in politics and the media. And all of a sudden, you have an awareness," he said.

[Image of: View Braintrust Panelist button]
Gene Detroyer, Professor, Independent

This is a first step -- to start a public discussion on the subject. As discussed, lots of loopholes will likely make it a non-starter, as written. However, food retailers can work to educate consumers about the impact of high sugar/high calorie food in our diets, and understanding the nutritional balance we need every day for health can help start the journey here.

[Image of: View Braintrust Panelist button]
Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

Yes. That we need a local government to determine meal size (or in this case drink size) is nothing short of ridiculous. This is government overstepping its boundaries. Let the consumer determine how much they should drink....

[Image of: View Braintrust Panelist button]
Kai Clarke, President, Kowa Optimed, Inc.

I'm confused...if our Interstate highway system had been developed WITHOUT speed limits and a local government determined that "reasonable speed limits" would save lives.... In the business and political climate today, it feels like this would be shouted down as the actions of a Nanny State or creeping Socialism taking away drivers' choice. And yet most of us would likely agree that speed limits are necessary and do save lives.

So why is a limit on beverage size seen as overstepping? Governments regulate all sorts of matters, including drinking age, speed limits, nurse to patient ratios, etc.

In my opinion, obesity in America is a major policy issue that has raised our cost of healthcare well beyond any other nation in the world. Whatever the causes, any reasonable steps to address this issue should be utilized.

Let the dialogue begin.

'JackPansegrau'

The fundamental contribution that the food and beverage industry can make towards this issue is to create products that are less sugar laden and yet still tasty. Is that possible to be done without relying on artificial sweeteners that harbor unknown health consequences longer term? I don't know, but the burden is on the industry leaders in this segment to figure it out.

I am not in favor of government legislating to impact personal behaviors. The only way people who like sugar laden, empty-calorie-packed soft drinks to reduce consumption is for them to change their attitudes about personal health and change their behaviors from the inside-out.

Does anyone believe that this new regulation will reduce soda consumption? Maybe the "free refill" will become the black market product du jour. In any event, those that want soda, will drink soda.

As people, we need to take responsibility for our own health and well-being.

[Image of: View Braintrust Panelist button]
Bill Hanifin, Managing Director, Hanifin Loyalty LLC

Search RetailWire
Follow Us...
[Image of:  Twitter Icon] [Image of:  Facebook Icon] [Image of:  LinkedIn Icon] [Image of:  RSS Icon]

RetailWire's
Getting Started video!

View this quick tutorial and learn all the essentials...

RetailWire Newsletters