Brands on the run

People are getting fatter –and advertisers are among the first to get the blame. But as marketers are pushing their products into a healthier landscape, anew brand order is creeping upon the outside, writes Matt Haig

The US is the fattest nation on Earth. It is also the home to the world’s biggest brands. Is there a connection? Well, when the world’s biggest brands include McDonald’s, Coca-Cola, KFC, Pizza Hut and Pepsi Cola, it could easily seem so.

And it’s not just the US that is starting to worry about its consumption habits. According to a UK Government report by the Commons Health Committee, obesity has grown by almost 400%in 25 years, with three quarters of adults overweight or obese.

Whether you believe that global brands are to blame or not, there can be no denying that it is not just the public’s health this is suffering.

On both sides of the Atlantic, the biggest brands have been attacked for causing ever bigger waistlines.

In the US, food companies are now facing the kind of legal action that plagued the tobacco industry. Over here, Health Secretary John Reid last week revealed plans to tackle smoking and obesity head on and it looks set to be a key manifesto pledge at the next election. With 1,150 adverts for junk food broadcast daily during kids’ TV, this could seriously affect the health of big brands.

Of course, it would be an exaggeration to claim that the brands providing us the calories are on their last legs. After all, Coca-Cola remains the world’s most valuable brand, ahead ofMicrosoft, and has a value that Interbrand puts at just under $70bn.

But while their values remain high, cracks are starting to appear in almost all the fast food brands as they try to respond to growing knowledge on issues such as diabetes.

Coca-Cola, for instance, realised that brands such as Evian are rising so fast because people want an alternative to fizzy pop. That is why it launched its own bottled water, Dasani.

Of course, this turned out to be a spectacular own goal when it emerged that the drink consisted of treated tap water from south London which failed to meet legal standards.

Coca-Cola has also tried to enhance the reputation of its core brand through such measures as removing the advertising of its products from about 4,000 secondary school vending machines.

And it had to stand back and watch as the BBC agreed to drop the mention of Coca-Cola from its weekly music chart after a sponsorship deal with the Official UK Charts company was criticised.

McDonald’s is another brand giant on the defensive. In 2002, it announced its first loss in decades as younger rivals, such as Subway, were chomping into its market share. Its response was to stop its expansion plans and to concentrate on new, healthier items such as grilled chicken, fruit, yogurts and salads.

These measures may not be enough to stop its bad reputation from growing. Indeed, McDonald’s and negative PR go together like a Big Mac and fries these days.

The award-winning documentary Super Size Me – which showed its maker, Morgan Spurlock, living solely on a diet of McDonald’s food for a month and getting dangerously ill as a result – has certainly not helped the perception of the brand.

McDonald’s, however, denied that its decision to stop offering Supersize portions had anything to do with the film.

Like Coca-Cola, its attempts to offer healthy alternatives have come under fire from health experts. The Food Commission has criticised McDonald’s salads for having more fat than a burger when you consider the dressing.

To appreciate the way the tide is turning, think about the way supermarkets such as Tesco and Sainsbury’s are pushing their healthy-eating ranges.

Of course, for a brand such as Tesco, which is associated with thousands of types of product, shifting the emphasis is easy. For a McDonald’s or a Coca-Cola, which is heavily linked to specific types of product, it is a much greater challenge.

Some have argued that the responsibility is not with the brands, but with the consumers.

In an interview with The Birmingham Post, Sir Adrian Cadbury, the former chairman of Cadbury-Schweppes, complained that his company was being made a “scapegoat” for Britain’s obesity problems. Cadbury-Schweppes is certainly one of the UK brands to have been in the firing line of the health officials. One row was over a promotion that offered sports equipment for schools if pupils ate thousands of chocolate bars.

“Scapegoat is probably the right word, because I don’t feel our company’s responsible for these problems,” said Cadbury.

Accountability

But, like it or not, brands are increasingly being held accountable for the health of their customers. John Banzhaf, the US attorney who led the march on anti-tobacco litigation, reckons McDonald’s could, one day, face compensation demands ranging between $50bn and $100bn.

The World Trade Organisation points its finger firmly at the food industry for the obesity epidemic and, as public opinion hardens against certain types of fast food advertising, there could be some very significant changes occurring within the next decade.

Although UK regulator Ofcom has recently ruled against an outright ban of fast food ads on children’s TV, increasing Government and public pressure could result in the kind of restrictions that have affected the like of Philip Morris in the tobacco industry.

Given all this, it is hardly surprising that McDonald’s and others are so drastically trying to curb the threats to their own existence by radically changing their image. As well as changing its menus, McDonald’s has been handing out pedometers, sponsoring sports events and encouraging physical activity of all kinds, but this might create as many branding problem as it solves.

After all, brands depend on a clear and consistent message. And they fail when they contradict their earlier identity.

For instance, when Coca-Cola was panicked into launching New Coke in 1984, it was one of the most costly brand failures of all time. Although market research had shown that New Coke tasted better than the original Coke, it was abandoned within two months of its launch. Why? Because it reversed Coca Cola’s original identity. If it was “the real thing”, why change it? And no matter how many millions McDonald’s has spent on promoting its salads, its identity is intrinsically associated with burgers and fries. All that happens when leading brands embark on drastic change is that they end up looking desperate. The brand shepherd becomes the brand sheep, following the pack, rather than pioneering the way forward.

With McDonald’s, it is easy to see where this desperation may stem from. If it wasn’t the threat of lawsuits, advertising restrictions, health lobbyists, angry parents, and an increasingly weight-conscious public that bothered it, it would still have other brands to worry about.

The brand order is changing. New brands are challenging the old on the grounds of ethics and health. Café Direct is a fairtrade alternative to Nescafé. Evian is a detox alternative to Coca-Cola. Seeds of Change is an organic alternative to brands like Ragu and Knorr.

And then, there are those brands, such as Alpro Soya milk and Yakult (now a $2bn global business), which have emerged within new categories to cater for the new breed of “nutritionally aware” consumer.

The rise of Subway

For the fast food giants like McDonalds’s and Burger King, the new threat is Subway. As well as adopting the kind of aggressive expansion strategy that McDonald’s founder Ray Kroc would have been proud of, the sandwich bar chain has also exploited the concerns about obesity to its own advantage.

Its adverts highlight the freshness of its salad-heavy sandwiches, and there is a Subway spokesman, Jared Fogle, who lost 245lb by eating Subway sandwiches.

Fogle now tours America telling people the secrets behind his dramatic weight loss.

Unlike McDonald’s, Subway carries no excess brand “weight”. It doesn’t have the baggage that comes from 50 years of heavy advertising. While McDonald’s and the other fast food brands believe the answer is in offering more diverse ranges, Subway has a narrow focus, concentrating almost solely on its sandwich theme.

When a brand like Subway acts responsibly – for instance, by targeting its children’s products at parents rather than the children themselves – no one is suspicious. On the other hand, when McDonald’s uses Ronald McDonald as a spokesperson for health, it inevitably gets a few raised eyebrows.

The fast food battle between McDonald’s and Subway is the epitome of a broader battle between the old brand order and the new. On the one hand, you’ve got the old food brands acting defensively and desperately trying to give themselves a facelift and, on the other, there’s the new brands that have risen from the changing attitudes and who are better placed to capitalise on them.

The fact that many 21st Century consumers are willing to pay £1.15 for a 100g bar of Green & Black’s organic chocolate, instead of 83p for a 125g bar of Cadbury’s Dairy Milk, indicates that buying decisions are no longer being made on cost alone. If a brand is perceived to be healthier, it will be able to influence purchasing behaviour.

The new brand order is one in which conscience is as important as convenience.

Advertising may be as powerful as it was, but it can’t hold back a tidal wave of public opinion. The old brands may remain household names, but the reputation attached to those names inevitably declines or at least becomes confused as health consciousness increases.

Ultimately, no matter how hard an old brand tries to change its spots, it always faces something even harder to beat than the competition – and that is its own brand history !

Matt Haig is the author of Brand Royalty, published by Kogan Page


The old brand order

McDonald’s

Burger King

Coca-Cola

Pepsi Cola

Cadburys

The new brand order

Café Direct

Evian

Green & Blacks

Alpro

Yakult

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