McDonald's and Coca-Cola: An Unhealthy Alliance
This week, the New York City Board of Health is expected to approve Mayor Michael Bloomberg’s proposal to limit the size of sugary soft drinks. Motivated by rising diet-related chronic diseases (along with healthcare costs), the mayor’s attempt to rein in out of control portion sizes caused quite a media firestorm. Predictably, the soda lobby has come out swinging, complete with an industry front group called, “New Yorkers for Beverage Choices.”
A better name would be, “Soda Pushers for Continued Profits.”
According to Beverage Digest, fountain sales (versus packaged) make up about 24 percent of the 9.3 billion cases of soda sold each year, or $18 billion in a total market worth $75.7 billion.
Coca-Cola will be especially impacted by cup size limits, as that company controls 70 percent of U.S. fountain sales, followed by Pepsi with 19 percent and Dr Pepper Snapple with 11 percent.
While it’s obvious that the soda industry would be on the defense, largely missing from the debate so far has been the role of the fast food and restaurant industry as a significant driver of soft drink sales. (Due to legal constraints, the city’s soda proposal would only apply to food service establishments and not retailers.)
The fast food industry has gotten plenty of flak for pushing a diet of cheeseburgers, French fries, and other highly processed pseudo-foods, but they should also be recognized as a major purveyor of sugary beverages.
For example, McDonald’s should be held accountable for its role in allowing the creeping up of cup sizes from a reasonable 7 ounces in 1955, to the current large of 32 ounces (310 calories for Coke), a more than 4-fold increase. Even a child size at 12 ounces is almost twice as large as the original.
The fast food king has already expressed its displeasure with cup size limits, suggesting instead “a more collaborative and comprehensive approach.”
No wonder, since Edward Jones estimates that five percent of McDonald’s revenue comes from soft drinks. Last year, McDonald’s revenue reached a record $27 billion; therefore at least $1.35 billion came from beverages.
That figure may be an underestimate because according to the research firm Technomic, carbonated soft drinks account for about 10 percent of fast-food and fast-casual restaurants sales in the U.S.
Factor in the profit margins on such beverages—estimated to top 90 percent—and as Ad Age noted, “the potential impact on the bottom line becomes clear.”
Whatever the figures, the money at stake here is huge—for both the beverage industry and the fast food industry.
This explains why among those listed as alleged “New Yorkers for Beverage Choices” are not only the major soft drink companies but numerous restaurant chains, including: Carls’ Jr, Chick-Fil-A, Domino’s Pizza, Hardee’s, and of course, the National Restaurant Association, whose members include McDonald’s.
That trade group, along with its network of state restaurant associations, boasts more than 200 national, state, and local lobbyists. The restaurant industry has fought against every common sense nutrition policy over the decades, including menu labeling and regulating marketing to children.
Speaking of children, the downsizing of soft drinks will have an important impact on them as well. Children learn acceptable standards by what appears normal. McDonald’s has been teaching kids that supersized fries, Big Macs, and large sodas are A-OK. By bring cups down to size, children get a better message.
And that’s another reason McDonald’s and the rest of the fast food industry is teaming up with the soft drink lobby to stop this proposal. They don’t want kids to grow up thinking 16 ounces is normal, because that means setting kids up for a lifetime of saner (and healthier) drinking habits.
Industry also knows that if limits are enacted in New York City, it’s only a matter of time before other cities around the nation follow Mayor Bloomberg’s lead.
Get ready for the next front group to pop up in your area, but don’t fall for it. Instead, let’s tell McDonald’s and Coca-Cola that enough is enough.
This post originally appeared on the Corporate Accountability blog.