Corporate Practices in the News

In this article, we briefly describe recent health-related news on corporate practices in the alcohol, pharmaceutical, and food industries.


Economic crisis depresses beer sales

As the economy stagnates, the beer industry worries about falling beer sales. “They’re the worst trends we’ve ever seen,” said Benj Steinman, President of Beer Marketer’s Insights, who spoke in October at the National Beer Wholesalers Association Convention in Chicago. Steinman blamed the drop on the high jobless rates among young adult male blue-collar workers—the industry’s traditional workhorse. “If we were down another 2% next year it wouldn’t surprise me,” Harry Schuhmacher, editor of Beer Business Daily, told wholesalers. Sales of craft beers, however, continue to increase, gaining 11% so far this year as compared to last year. These trends demonstrate the deep effects the recession has on sales of alcohol, food and other products, a topic explored in a previous Corporations and Health Watch post.


Drug industry finds that 15-second ads don’t make the sell

To save money in a tough economy, many Big Pharma companies have shortened their direct-to-consumer television ads from 30 seconds to 15 seconds. As shown below, data compiled by Ameritest , a copy-testing firm, and Competitrack, an advertising tracking firm indicates that 15-second over-the-counter drug ads constituted 25% of drug ads in 2007, 63% last year and 65% so far this year. In the same period, Big Pharma drug makers lost market share to private label manufacturers, suggesting that shorter ads were less persuasive in winning new customers. “The companies that live and die by their advertising are stretching their budgets with 15-second ads, and frankly there’s a lot for them to learn,” said Ameritest CEO Charles Young. “It’s an awfully short form for creatives to work with. If it devolves into simply reminder advertising, you’re not building brands. You need to bring emotion and news value to those brands.”

In 2005, the drug industry spent more than $4 billion on direct-to-consumer advertising. Advertising is a tax deductible business expense and also enjoys the constitutional protection that the Supreme Court has applied to commercial speech. The rationale for such protection is that advertising helps consumers to make informed decisions. Can a 15- or 30-second ad contribute to more informed health care consumers?

Pharma spending on online advertising to reach $1 billion this year

Like the food and alcohol industries, the pharmaceutical industry is expanding its online advertising. According to a report prepared by eMarketer, online ad spending by drug companies is expected to reach $1 billion this year and keep rising through 2014. One factor slowing growth is the lack of clear guidelines for this form of advertising from the US Food and Drug Administration. A year ago, the FDA held public hearings on the topic and solicited e-mail comments. “Pharma marketers are waiting around,” said eMarketer’s Victoria Petrock, author of the report entitled DTC Pharmaceutical Marketing Online: A Slow Shift to Digital. “They are trying to test the waters but realizing that the FDA isn’t going to come down with a template or a hard-and-fast ruling. Even when that happens, there’s still going to be a process of give-and-take and experimentation.”


Michelle Obama on restaurant practices

The following excerpts are from a speech Michelle Obama made in Washington, D.C. to the National Restaurant Association in September 2010:

“Together, you represent 40 percent of the nearly one million restaurants in the United States, from the biggest chains to the smallest diners. You know what Americans like to eat and what they don’t. You’ve seen how the ingredients we put in our bodies affect the way we feel and the way we feel about ourselves. And you also understand the unique role that food, and restaurants especially, play in our own lives and in the life of our nation….. And the truth is that while restaurants are offering more options and families take advantage of them more often, they aren’t always the healthiest choices…

And as America’s restaurant owners, you’re responsible for one-third of the calories our kids get on a daily basis. The choices you make determine what’s listed on the menus, what’s advertised on billboards, and what’s served on our plates.

And your decisions about how a dish is prepared, what goes into it and where is it placed on the menu, that can have a real impact on the way people eat….Together we have to do more…And we need your help to lead this effort. And today I am asking you to use that creativity to rethink the food you offer, especially dishes aimed at young people, and to help us make the healthier choice the easier choice…First, it’s important to reduce the number of empty calories that our families are consuming, calories that have no nutritional benefit whatsoever. After all, we as humans, we are programmed to crave sugary, fatty, salty foods. And as people who work to meet those needs, I know it’s tempting to respond by creating products that are sweeter, richer and saltier than ever before. But here’s the catch. See, feeding those cravings does just respond to people’s natural desires, it actually helps shape them. The more of these foods people eat, the more they’re accustomed to that taste, and after a while, those unhealthy foods become a permanent part of their eating habits.

But here’s the good news: It can work the other way around just as easily. Just as we can shape our children’s preferences for high-calorie, low-nutrient foods, with a little persistence and creativity we can also turn them on to higher quality, healthier foods.”


Image Credits:

  1. Grant Hutchins via Flickr
  2. Competitrack and Ameritest