Attack? Equivocate? Engage? How Big Food responds to a tough new campaign

Chris Jochnick, director of Oxfam America’s Private Sector Department (twitter: @cjochnick), reflects on the different corporate responses to our ‘Behind the Brands’ campaign launch

Companies have had decades to hone their engagement strategies with activists, but still struggle to find the right approach.  Initial reactions to Oxfam’s Behind the Brand campaign offer an interesting case in point.  The campaign is only a week old, so these are early days – but already we can see certain styles emerging.

Behind the Brands is an aggressive effort to link consumers and the public with their most popular food brands around the enormous environmental and social “footprint” of the food and beverage industry.  The campaign launched last week in countries around the globe with a flagship report, a scorecard (below) ranking the “Big 10” food and beverage companies, an interactive on-line platform to encourage public action, and various “visibility” activities at company headquarters.  Media took notice, with stories in the NY Times, BBC, NPR, Businessweek among dozens of others.  In the first 24 hours, 250,000 people visited the web-page; after a week, 10,000+ have taken some kind of action directed at the companies.

Oxfam was not out to blindside or gratuitously offend. We’ve worked with F&B companies in the past and expect to collaborate in the future.  We spent months consulting with the companies about the Scorecard and let them know in advance what they could expect.

So how have the companies reacted?  Typical responses to a campaign can be grouped into three categories:  (a) defensive (b) equivocal and (c) engaged.  In this case, we’ve seen evidence of all three.

On the defensive, Associated British Foods, the Scorecard’s worst performer, came out swinging to the Guardian: “The idea that ABF would use a “veil of secrecy” in order to hide the “human cost” of its supply chain is simply ridiculous. We treat local producers, communities and the environment with the utmost respect. As for transparency … our next CR report in autumn 2013 will confirm significant improvement in disclosure.”  Mondelez wasn’t too far behind, issuing a short response and sending police out to greet our pamphleteers.  Only one company – Danone – opted to ignore the campaign completely – a form of passive defensiveness.  These are pretty modest steps (to get a contemporary flavor for what companies are capable of, see this bit about Chevron), but do suggest a path of resistance that will only provide the campaign with grist for escalation.

Most companies have taken an equivocal stand, publicly recognizing the importance of the campaign issues, offering olive branches, and touting their corporate citizenship bone fides.   The official response from Mars is typical: “Mars takes a comprehensive approach to this issue, with a strong focus on the entire farming community specifically in the area of cocoa sustainability. Our leadership has had a positive impact on the women, children and families of smallholder farms. Oxfam highlights important issues in their report and we look forward to working with them to address these critical issues.”  As a first step, equivocating may make most sense.   It avoids any commitment and keeps a door open to engagement.

It is too early to characterize any of the companies as “engaged”, but there are some positive signs (see responses here).  Pepsi’s CEO went out to meet Oxfam pamphleteers at Pepsi headquarters and spent 30 minutes discussing the campaign.  Nestle provided a fairly substantive response and, along with Pepsi and Mars, has been receptive to immediate dialogue.  These are helpful openings.

In the face of protests, companies will often start defensively or equivocally, hoping to wait out a campaign.  Oxfam has found that even companies with visionary leaders, scoring high marks on corporate social responsibility, will often balk reflexively at outside pressure.  Pride, inertia, fear of the unknown may all contribute. We saw it play out with the iconic CSR leader Howard Schultz, who resisted for months Oxfam’s push to dialogue with the Ethiopian government around coffee branding rights, even in the face of media, shareholder, barista, consumer and public pressure.   In conversations with Starbucks executives afterwards, it was evident that their deeply-rooted belief in the “goodness” of the company made it more difficult to “hear” or respond to outside criticism.

Companies will also resist campaign demands that require ceding some control.  All of the Big 10 voice support for small farmers and sustainability, and many have good projects in the field.  Companies are responsive to pressure around these projects and will eagerly (necessarily) partner with NGOs.  Campaigns for transparency, due diligence, and worker/stakeholder rights – those issues at the heart of Behind the Brands – are a tougher sell.  Companies are reluctant to identify suppliers, or sourcing volumes or auditing performance; to measure and report on how women and small-holder farmers are faring; or to acknowledge their human rights responsibilities.  But these are the building blocks of real accountability.

Behind the Brands aims to overcome this resistance by strengthening consumer and public voices.  Consumer-facing companies like the Big 10 have to balance accountability concerns with risks to their brands – by far their most valuable asset.  Defensiveness in the face of reasonable public demands will eventually take a toll.  Oxfam knows that many consumers care about where their food comes from; if we can get enough of those consumers to think twice before making choices, companies will have to take notice.

Some company leaders already recognize a business case for treating farmers and planet well.  And they know that transparency in this age is unavoidable.  These companies will see dialogue with credible critical voices as an opportunity.  Oxfam is counting on a handful of these companies to fully engage with the Scorecard – and all the issues underlying it — as a means towards strengthening their brands and business.

Corporate responsibility: how can you tell substance from spin?

This guest post is by Erinch Sahan, an Oxfam private sector adviser

I must admit, I am drawn by the idea that companies have seen the light. I want to believe that pursuing profits will result in a sustainable world and the end of poverty. The literature around Shared Value (coined by Harvard business academic Michael Porter) supports the idea that there are many undiscovered common interests between society and profit. Sometimes this is the case: where well-paid workers deliver productivity gains; where poor people become consumers and can afford to buy more stuff; and natural resources are managed so that everyone can continue to make money into the future. The business case  is well made. However, as short term financial pressures weigh heavily on managers, too often, corporate actions do not match the sustainable business rhetoric. And we know that many companies are great at building a good image when what they actually do is far from sustainable.

Currently, everyone is turning up the rhetoric on corporate responsibility. GSK, Unilever, Nestle, Shell, Imperial Tobacco Group; visit any multinational’s website and you’ll find something about how it’s core to their business to act in the best interests of society and the planet. It’s hard to tell between the truly good ones (like Body Shop, Innocent and Ben & Jerry’s) and the Halliburtons of the world.

Frustrated that I can’t get beyond the online PR spin, I’ve taken to asking them questions like ‘when push-comes-to-shove, and it’s costly to be responsible, who wins the fight, your buying manager or your corporate responsibility team?’ The answer, unfortunately, is almost always ‘buying’.

Let me provide some context. I work on agriculture for Oxfam because that’s where the poor people are. I care about brands for two reasons. Firstly, that’s where our supporters have power over companies. Secondly, the brands are usually the most powerful players in supply-chains, who can get the big changes to happen. This means that we zero in on food and beverage companies and retailers. So that’s who I’m talking about.

Incidentally, these are also the companies that are often in the vanguard of exploring ways of making money while, at the same time, improving the world (through securing supply, stable chains and consumers buying their products with a clear conscience).

The side of the business that is concerned with product quality is usually the first side to buy into the business case to act responsibly. This is because long-term supplier relationships are good for quality and usually good for development. But the performance of the buyers, who hold real sway in these companies, is measured on profit margin, so they need to get the lowest price and usually drive who the company does business with.

One CSR manager recently told me that “if you want buyers to make ethical decisions, you have to give them a mandatory target to meet. Otherwise, our buyers just tell me I’m naive when I suggest that they prioritise ethical purchasing”. One major retailer that has set substantive social and environmental targets for staff is M&S through Plan A (see pic). We’ll know the tide has turned when retailers with more ‘savings-focused’ consumers join the party.

So how do we know if a company is doing the right things? Next time you run out of conversation with someone who sells stuff ultimately produced by poor people, try a few of these questions. It’s one way to start to get beyond the very seductive PR lines.

1) Who’s responsible for the corporate responsibility targets, the CSR/Communications people or the buying team? For example, at Starbucks, buyers are now responsible for meeting social responsibility goals.
2) Do they even know who’s growing/making their stuff? (I’ve been amazed at how many don’t)
3) When there’s a problem (e.g. child-labour), do they drop their suppliers or work with them on systems that will prevent the problem?
4) Do they ask the people at the bottom of their supply-chain what their problems and priorities are? One way is through a study such as a poverty footprint (e.g. Coca-Cola and Unilever).
5) Are they experimenting with new ways of doing business that improve conditions for the poorest people in their supply-chain? For example, lots of the big chocolate producers (Mars, Nestle, Cadbury/Kraft etc) are piloting different ways of getting technical knowledge to small-scale farmers who grow the cocoa in their chocolate.

Any other suggestions?