One of the most powerful Big Food lobbyists wants to change its image — and its mission.
The Grocery Manufacturers Association on Thursday will announce it is planning to change its name to the Consumer Brands Association in 2020, a sign the group is trying to distance itself from past troubles. It will have a new agenda that it says is a better reflection of today's consumers and its members' concerns.
The change comes as the industry undergoes massive upheaval. Large food brands built businesses on the power of scale. In some cases, that heft helped to make food as cheaply as possible. But consumers now demand quality and transparency, with or without regulation. As young brands pop up to cater to those needs, consumers are voting with their pocketbook.
In the past two years, food companies like Campbell, Kraft Heinz, Nestle, Hershey and Unilever have left the GMA, amid disputes over how to handle these new realities. Among the issues that were fiercely debated were how and when to disclose the use of genetically modified organisms (GMOs). The organization says each of the former members left for individual reasons, but the common thread was a failure by the organization to adapt as consumer sentiments and trends were evolving.
"Gone are the days when we could have one face to policymakers and a different one to consumers," said GMA President and CEO Geoff Freeman. "Policymakers have little to no influence on the decisions consumers make. It's fundamentally a different industry," he said.
The organization's agenda is based on the industry's realization that it must react to consumers' demands, rather than fight them, Freeman said. The new name more clearly identifies the companies in its membership: branded names in food, beverage, personal care and household products.
Freeman joined the group in August 2018 after serving as CEO of the American Gaming Association. He has no prior experience in the consumer packaged goods industry.
"A big part of our thinking is akin to what you're seeing at the Business Roundtable," he said, referencing the powerful group of executives that has recently taken on issues ranging from comprehensive privacy legislation to gun regulation.
GMA will focus on four priorities that unite its membership, which includes Conagra Brands, Coca-Cola, Colgate-Palmolive, Henkel, Kellogg and Keurig Dr Pepper. Those priorities are making packaging more sustainable, uniform regulation, pushing for trust and transparency about products, and improving the country's supply chain by leveraging the industry's position as being responsible for one-fifth of all freight shipping in the United States.
GMA wants to fix what it believes is a broken system to help address the country's recycling crisis, said Freeman. The U.S. does not have uniform recycling laws, which has led to contamination of shipments meant for recycling. Exacerbating this issue, China, responsible for handling much of the world's plastic waste, has begun to refuse America's garbage.
The group is also pushing for uniform regulation on cannabidiol, or CBD, an ingredient that is popping up in everything from cookies to drinks despite a lack of clear guidance from federal regulators. GMA believes a recent ruling by the U.S. Department of Agriculture's Agricultural Marketing Service around disclosure of GMOs takes a pick-and-choose approach to the disclosure and exempts too many foods.
Freeman said the organization has been in touch with current and former members as it developed its new agenda.
"When we launch, I'm confident we're going to do that with a host of new members. Members that may have once been, and companies that have never been here," he said.
A spokesman for Campbell, whose former CEO Denise Morrison oversaw the company when it became one of the group's first defectors, told CNBC, "We have no immediate plans to rejoin but are consistently evaluating our industry memberships."
When asked whether the group will add to its roster some of the upstart brands like Beyond Meat, which are responsible for most of the industry's growth, Freeman said, "We've got some work to do with some of those upstart brands to prove we are who we say we are."
Still, as the industry reacts to change, differences remain.
There are regulatory debates around the usage of the terms "meat" and "milk." Some industry stalwarts are opposed to labels like "almond milk" and "burgers" for products made from plant-based proteins. These items sometimes cut into the market share of existing brands. Others, like Hormel, are toeing both lines by investing in the growing categories, despite making the bulk of their money from traditional products.
Labeling has become a promotional tactic — and, in some cases, grounds for litigation. A U.S. subsidiary of Molson Coors Brewing, MillerCoors, sued its St. Louis-based competitor earlier this year for a corn syrup ad campaign that began airing during the Super Bowl for its Bud Light beer. MillerCoors alleged that Anheuser-Busch InBev singled out corn syrup for criticism because it would confuse and mislead consumers about its own use of the ingredient, in addition to misusing MillerCoors' trademarks in its ads.
Despite specific issues that may divide the industry, GMA still believes there is a place for a trade group.
"It's very clear to me – there are some issues [for which we are] better working together than we are independent," said General Mills CEO Jeff Harmening, who chairs GMA.
Not all are believers that a trade group representing some of the industry's largest consumer companies is best positioned to advocate for industry change.
"What happens to all of us is we tend to rationalize what's in our best business interest," said Daniel Lubetzky, CEO of Kind Bar, which has advocated for industry transparency.
Lubetzky declined to comment on GMA specifically, saying he was not familiar enough with its agenda to do so.
Kind's initiatives have included urging the FDA to redefine the definition of "healthy." It has also launched a nonprofit called Feed the Truth and a campaign to disclose sugars in favorite snack foods. As part of that campaign, Kind Bar in April announced an augmented reality installation and an online database that shows the sweeteners and sugar in snack foods.
Two years ago, Kind sold a stake in its company to Mars that valued it at about $3 billion to $4 billion, cementing its rising place in the food industry.
Lubetzky said Big Food, in general, faces a "fundamental tension where the bulk of their businesses are driven by fundamentally unhealthful things that are cheap to make and that are mass products and that is a very difficult tension for them to navigate."
Retailers have asked Kind Bar to move into new categories, said Lubetzky, but the company has often struggled to find a way to do so that is both healthy and keeps prices low enough for consumers.
"For almost every large food conglomerate, their golden goose are products that are sugar first. Sugar costs 25 cents to 27 cents a pound. High-end products like almonds or tree nuts cost $3 to $6. ... These brands cannot invest in healthy products because it will cost more than the consumer has been trained to pay," said Lubetzky.
Sugar, so far, has largely been regulated by the states, with cities like Philadelphia introducing a so-called soda tax on sugary drinks. GMA's Freeman said he believes sugar should be regulated on a federal level.
"We have an FDA for a reason," he said. "The FDA has a responsibility [to make] informed policies for this area ... that's the type of decision that should be made in Washington to ensure businesses of scale can rely on the efficiency of the supply chain."
Meantime, as consumer companies struggle with stalling sales, making changes to products and packaging could present a particular risk to the bottom line that may be unwelcome to investors.
"I do not think there's a trade-off," said Clorox CEO Benno Dorer, vice chair of GMA. "In my mind, this association is there to make sure that regulators are enacting policy that supports business while at the same time meeting consumer needs."