Regardless of party, the past few months have been a time for a certain amount of self-assessment with regard to one’s relationship with the new political climate.
Some would describe it as something of a nightmare scenario, while others are happier with the election and its aftermath. Certainly, regardless of your side, there’s been a lot of frustration and bitterness, and a hardening of the national mood that seems to have carried over with all the bad blood of the year-long campaign season.
So where do things go from here? How do brands, industry, companies and consumers conduct themselves, knowing that most of the beverage industry has some connection, either direct or extended, to the pain at the center of the government, and the pain that is wracking the country at large.
Certainly, the major forces affecting new product development have strong political components. Health and wellness is the key trend in beverage and has been for two decades, but the legacy of both the Clinton and Obama families (I say families because the Clinton Global Initiative helped negotiate change with regard to products that are sold in schools, while Michelle Obama was a key advocate for changes in the American diet) is one that has led to major changes in the way Americans have looked at soft drinks, helping encourage companies to look beyond sugary beverages for growth and beyond schools as the source of those products’ next consumers.
At the same time, those sugary beverages have also become something of a flashpoint for both health and wellness advocates as well as those conservatives interested in limiting entitlement programs like the food stamp program, called SNAP. A recent report in the New York Times that food stamps are being used to purchase nutritionally inferior CSDs has become a rallying cry to those who wish to portray SNAP beneficiaries as irresponsible. But at the same time those feelings have raised concerns from health and wellness watchdogs over whether the government should be in the business of subsidizing highly profitable beverage companies.
The Times report also came freighted with class and race issues – by paying attention to the 9.3 percent of the average grocery basket SNAP beneficiaries spend on sugar-sweetened drinks like sodas, juice drinks and energy drinks, the report downplayed the relatively small difference in spending by non-SNAP shoppers, who average 7.1 percent of their grocery spend on those products. Again, beverage is fuel for the argument.
So those are just two examples at the big company level, but there are more: on the retailing side, last month, a group of more than 100 retailers and retail groups got together to rally against a highly publicized 20 percent levy on imported goods being pushed by the current administration. The AAP, a coalition of retailers, says that the proposed Border Adjustment Tax will impact consumers in both the supermarket and the bodega through the industry’s heavy reliance on food imports, both from an ingredient and a produce perspective. Indeed, 30 to 40 percent of fresh produce items are imported into the U.S., according to the National Grocers Association, while the AAP has estimated that the Border Assessment Tax would cost American households up to $1700 as those import levies are added to the cost of goods.
Meanwhile, both agriculture and food retailing in the U.S. draw large components of their workforce from immigrant communities, both documented and undocumented. Many of the fields in California and Michigan, the dairy operations in Vermont and the livestock businesses of North Carolina and Texas would struggle to find staff without workers from other countries – those same workers whose security as legal residents and path to citizenship is being fractured by the immigration debate.
On the procution side, regulation by agencies like the EPA and the FDA is also something that’s going to change. A move away from respect for climate change science has the potential to continue environmental upheavals that are already affecting crops and growing patterns for key ingredients. A move away from the ability to effectively regulate the production end could more easily result in adulteration of products and consumer harm.
Pull on any part of the political web, and you’re likely to tip a drink.
But there’s more than that: there’s the character of the leadership that becomes important to consider, and at a time when leadership style and personality are as under scrutiny as any policy point, they start to overlap and affect the entrepreneurial forces that are improving the industry as a whole.
One reaction from within the entrepreneurial space that I think is worth citing is from HINT founder Kara Goldin, who had just begun a two-year term as a member of the NACIE, the National Advisory Council on Innovation and Entrepreneurship, shortly before the election. Anyone who has followed Goldin’s career understands that she has been a strong advocate not just for her brand, but for entrepreneurialism as an economic and cultural force. In many ways joining the NACIE was something of a plateau to which she had aspired for its ability to further improve the access to resources for the entrepreneur.
In February, however, she posted her resignation from NACIE, making a clear argument that the mission and values of the current administration are at odds with the mission and values that govern her life as an entrepreneur. While noting that under normal circumstances the council’s mission wouldn’t be affected regardless of the party in the White house, she said she was resigning “because I believe that we now have a President that has no interest in advice, that is pursuing power as an end in and of itself and that has no intention of solving real problems or creating real opportunities for the people of this great nation. More importantly, as the leader of an innovative company that’s helping America get healthier, I feel a deep obligation to our employees, our investors and our customers to distance myself from the sexism, racism, protectionism and hate that has defined the Trump administration’s first days in office.”
She cited the makeup of her company as a key reason for her withdrawal – one that has more women than men working there, “straight people, LGBT people, small people, large people, hispanic people, jewish/christian/muslim people, white people and black people. We are all Americans and we are proud of our country and its values.”
Goldin was consistent in her message when I asked her about it a couple of weeks later.
“Hard to be a leader to people when there is confusion as to what their leader is doing,” she wrote to me. “If you want your team focused, I think, you need to cut out any confusion and noise.”
I agree. It’s also important, I think, to be vigilant and well-informed, and to understand, as Goldin does, that business plays a role in the theatre of politics. Contrary to the stagecraft we’re seeing today, It’s not just a show. There’s real power in drink, and as things progress, more of the industry may be called to action. Use it.