Round-up: Pepsi tries to have its soda, and drink it, too, at annual meeting
Soda giant comes under fire on voting rights, race, and public health.
Pepsi’s annual meeting kicked-off with a lot of talk about “smiles.” Smiles for its workforce. Smiles for its customers. Smiles for the planet! And, most importantly, smiles for its investors. And indeed Pepsi grew by more than 4% during the pandemic.
But investors were yet wary. Growing sales of junk food and soda translate into more diet-related illness and death globally. And the correlation between our diet-related public health crisis and the heightened risks it presents for those with COVID are now well established.
That’s why over the opposition of the Pepsi board, shareholders holding around $28 billion in stock demanded the corporation take a harder look at the health and social costs it is foisting on the public; particularly to communities of color and those in middle- and lower-income countries.
And in response to CEO Ramon Laguarta’s painful repetition of talking points around “smile creation,” the spin doctoring at the meeting quickly gave way, well, to a real doctor: Dr. Yolandra Hancock.
Executives and shareholders know the pediatrician, university professor, mother, and policy advocate from when she delivered these powerful remarks at last year’s meeting.
Here’s an excerpt, so you get the idea.
“I have diagnosed children as young as 9 years-old with Type II diabetes. I diagnosed one little girl soon after she lost her father to diabetes. As she and her diabetic grandmother received the news, she pulled out a soda.
I was first introduced to Pepsi by my grandmother as a 5 year-old little girl. It wasn’t until college, as a result of persistent leg cramps and excruciating migraines, that I realized that the soda I drank like water was depleting my body’s calcium and triggering these debilitating headaches. I struggled to kick the habit, with the draw to drink it sometimes overpowering the pain from its consumption. But eventually I did.
Today I serve children and families that have had greater difficulty breaking habits driven by PepsiCo’s targeted marketing to communities of color, such as those I serve in our nation’s capital.”
Thanks to her emotional and personal appeal, grounded in a growing body of evidence about Pepsi and the soda industry’s contribution to diet-related disease in communities of color, investors with around $20 billion in Pepsi stock supported a resolution she was advocating.
One year later: The shadow over Pepsi’s unrelenting charm/smile offensive has only deepened. As the pandemic raged, Pepsi simultaneously lobbied against public health policies and for government support to keep their “essential” junk foods flowing to the public. Pepsi continued/s to target India for rapid expansion as the COVID death toll rises. It also gave jaw-droppingly large and far-reaching contributions to defeat soda taxes. And the corporation continued to bankroll a propagator of junk science that has helped stymie nutrition policy from China to South Africa (both Coca-Cola and Nestlé have already broken ties with this increasingly toxic trade group) .
So, Dr. Hancock was back. She was back with only two weeks remaining til the hearing of a Nutrition Equity Bill in her hometown of Washington, DC that Pepsi and its trade group are actively working to kill. And she was back to pose choices to the largest U.S. food and beverage corporation. (View and read her full statement here).
“The ‘Choice of a New Generation’ was Pepsi’s slogan in the mid-80’s. The corporation spared no expense, featuring the purposeful selection of mega-stars like Michael Jackson and Tina Turner, to raise up the next generation of soda drinkers, particularly young people of color. Flash forward nearly 40 years later, the slogan may have changed but the pursuit of our black and brown communities and the collateral damage from this targeted marketing has not.
Coming out of this pandemic, we have to make choices for this generation. As one of the largest food and beverage corporations in the world, PepsiCo, needs to make different choices. That begins with choosing to level with shareholders about the inordinate cost to public health, and, frankly, the health of global democracy, of your products and practices. The choice not to underwrite the American Beverage Association and its crass tactics to undermine local taxes that would help communities of color recoup at least some of the overwhelming health costs Pepsi and its competitors have saddled us with. The choice not to be a member of the International Life Sciences Institute, a known propagator of junk science. The choice not to target-market sugar water to children of color as the corporation claims to ‘lift up Black communities and representation.’ The choice to disavow and forever defund the legislators behind the current push for Jim Crow 2.0 voting laws across a growing number of states. The choice to sever ties with the trade group most actively opposed to expanding voting rights, the U.S. Chamber.”
And similar to the Coca-Cola meeting two weeks prior, investors listened. A shareholder resolution demanding the corporation issue an independent and authoritative report on the impacts of Pepsi’s business in sugar-saturated products on public health received a growing vote tally from last year to this year’s meeting.
CEO Laguarta attempted to explain the board’s opposition to the measure, arguing that the report was duplicative of ones already written. Never mind that the reports cited were already a few years old…different in scope…and pointed to the need for the report Dr. Hancock, Harrington Investments, and other resolution advocates like Corporate Accountability were calling for.
For instance, the Access to Nutrition Index (ATNI), that both Coca-Cola and Pepsi have held up as an analog to the requested report, reports that Pepsi only scores 5.1/10 overall after evaluating the corporation in areas like corporate governance of its nutrition strategy, management, reporting, & responsible marketing policies.
What’s more, the ATNI found Pepsi lacks comprehensive lobbying disclosures, does not publish results from independent evaluations, and lacks commitments in certain areas of responsible marketing and reformulation.
In layman’s terms: Pepsi needs to level with investors about its costs to public health, which is exactly what a second resolution (see pg. 88) similarly advocated. In response to that parallel call for Pepsi to do some true cost accounting: Laguarta claimed that it would be too difficult.
That should tell shareholders about all they need to know. The public health costs this corporation is foisting on the public are so large, so immeasurable, investors should instead focus on…smiles.
And as Dr. Hancock pointed out in her statement, the dichotomy between Pepsi’s rhetoric and its practices are not isolated to public health. When it comes to racial justice and voting rights, Pepsi is similarly hypocritical.
Not only has Pepsi committed to “uplifting Black communities and representation,” while perpetuating health inequities in these communities. It has paid lip service to the right to vote as “the cornerstone of American democracy” as it maintains membership in the U.S. Chamber of Commerce, the centrifuge of Corporate America’s opposition to voting rights expansion. Pepsi has also failed to disavow any of the hundreds of GOP legislators behind today’s push for Jim Crow 2.0 voting laws. To take but one example, all three co-sponsors of a proposed voter suppression bill in North Carolina received contributions from both Pepsi and the state’s Chamber of Commerce, which Pepsi is a member to.
The corporation’s inaction is all the more confounding given the very public concerns raised by one of its own board members, Darren Walker (who is also President of the Ford Foundation). In a recent New York Times piece, Walker lamented Corporate America’s lack of urgency as a bill restricting voting rights in Georgia worked its way through the legislative process.
More than 360 voting bills with restrictive provisions have been proposed in 47 states just this year. And according to a recent Public Citizen report, corporations and their trade groups have given more than $85 million to lawmakers supporting voter suppression bills.
As Dr. Hancock made clear, “Pepsi has choices. Choices, a new generation will judge it by.”
To help compel the corporation to make the right choices, you can sign the petition here calling on Pepsi to #StopJimCrow2. Check back with us in the weeks ahead for updates and analysis.