In the United States and Europe, junk food sales have precipitously declined since the late 1990s.
Analysts have put the change up to greater health consciousness, increasing labor costs, decreasing purchasing power among the poor, new tastes among millennials, and the rise of “fast casual” dining options, among other market shifts.
For their part, the soda and snack food companies, such as Coca-Cola, PepsiCo, and Nestlé, have turned to emerging markets to secure profits. And they are doing everything they can to keep their new markets pliable.
The alliances that the snack food and soda industries cultivate today will have grave policy consequences in the future.
Politicians who have benefited from the companies’ largesse will be hard pressed to stiffen regulations limiting the marketing and sale of junk food products.
And such limits are critical at a time when obesity and type 2 diabetes are on the rise among children and the poor in countries such as Mexico and Brazil.
Mexico has become a particularly important staging ground for this new mode of business. There, Coca-Cola has built a strong network of supporters within government, ranging from presidents to senior health-care officials.
PepsiCo went so far in 2007 as to work with the country’s Secretariat of Public Education to create a school exercise program, Vive Saludable Escuela, which won PepsiCo political favor and burnished its public image.
And Nestlé locked in the support of former President Enrique Peña Nieto by providing prepackaged biscuits for his government’s anti-hunger program.
A similar dynamic prevails in Brazil, where Nestlé is a particularly powerful player.
Finally, in India, the Modi government perceives companies such as Nestlé, Coca-Cola, and PepsiCo as vital to agricultural development. Delhi therefore has little incentive to effectively limit the marketing and sale of these companies’ products.
In fact, Modi’s mandate that all flavored sodas include two percent locally produced fruit ensures that what profits the soda companies also serves the prime minister’s political and economic agenda.
Mexico, Brazil, and India’s governments have done a commendable job of recognizing the need to improve public health. But for efforts to that end to remain vigorous and independent, the governments will have to limit the junk food industry’s relationship with government and civil society.
Source: Fast Food Companies Are Seeking Political Cover in the Developing World