BUSINESS WATCH

Watching the business of the world and minding the world's business.

Monday, April 30, 2007

Food Is Going to the Dogs

A staple of nonprofit fundraising appeals for years has been the amount of money Americans spend on pet food compared to the notably smaller amount one is asked to contribute to said cause.

Americans love their pets. They spend money on their pets as if they were kids. Pet food alone is a $14 billion a year industry. In fact, "For the baby boomers, the pets have now become the kids, because people are treating them that way," according to a story in the Boston Herald. "We've seen this huge amount of money being spent on their pets."

So, it's not surprising that a major story has emerged of pet food from China that killed furry loved ones in homes across America.

Add a sense of helplessness and fear (American Food Supply at Risk -- April 29) after the toxic food becomes human (Tainted Pet Food Linked to Ind. Chickens – April 30), mix in a touch of greed to the scandal (Pet Food Officer Sold Stock Before Recall -- April 11), and the makings for a major story are in place, the kind of a story that most any reader can relate to.

This story taps into the dark and deeply personal memory of losing a pet that any pet lover has experienced, probably in the course of their formative childhood years.

China’s sheer lack of quality control and corruption is of course the main story here. Consider the huge trade surplus involved – China had about a $150 billion surplus with the U.S. and replaced it as the largest exporter in the world in 2006. The sheer volume of products from China that enter the United States at every level of the supply chain promises that the pet food scandal is a story, dare I say … with legs.


Saturday, February 17, 2007

Green is the New Black

Climate change has gone mainstream. How to tell?

#1 “Let’s Talk About Climate Change” full page ads have been appearing in the Washington Post by…Exxon. When THE BIGGEST climate change denier nonchalantly changes tact to engage the issue on its own terms rather than insisting it doesn’t exist, they have conceded the fight. The vice president for public affairs of the world's largest publicly traded oil company, Kenneth P. Cohen (no relation), said that, the company has never denied the existence of climate change. No, they have only heavily funded those that do.

#2 Bush mentioned it for “the first time” in six years in office in a State of the Union address.

#3 Lawmakers in the U.S. finally seem poised to pass legislation, which business groups may support out of fear of a patchwork of regulations in the absence of a uniform national approach. Also, a group of global lawmakers signed a resolution Thursday urging a new agreement limiting greenhouse gas emissions.

And in other cultural indicators:

#4 International benefit concerts with a cause that once covered famine aid for Africa, farmers, and poverty, now will tackle climate change. "Save Our Selves" -- SOS will be held "on 7/7/07 across all seven continents" aiming to trigger an international movement to combat global warming – with proceeds going to Gore’s foundation, btw.

#5 The main classic rock station in the Washington DC area, 94.7 FM, has banked that green is good, to paraphrase Gordon Gekko in the movie Wall Street, with a new name – The Globe, and mission: “We want to be a part of the solution.” Their web site lists the following among their top 12 priorities:

1. THE GLOBE - We All share and have a vested interest in The Globe.

3. THINK GLOBALLY, ACT LOCALLY - As a Local Radio Station, we'll support our community...because we live here too.

Of course, they also hawk global positioning gadgets with the pitch that you can find the nearest place to recycle your garbage.

Sunday, February 04, 2007

Exxon Mobil Posts Largest U.S. Profit Ever -- Again

Does a company with the largest annual profit ever by a U.S. company -- $39.5 billion in 2006, which exceeded its own previous record of $36.13 billion set in 2005, really need a tax break?

Tuesday, January 30, 2007

Trans Fat Is On A Roll


McDonald’s the Latest to Fry Trans Fats

A Top Ten (largely) Trans Fat Free List:

The LARGEST: The poster child for fast food fat, McDonald’s, announced January 29 that it will follow the lead of other big chains that are also removing trans fat from cooking oils. The biggest fast food chain has been under the gun after revealing that its French fries contain a third more trans fats than it previously knew, and breaking its 2002 commitment to eliminate artificial trans fat from its cooking oil.

2nd LARGEST restaurant chain: KFC pledged to largely eliminate trans fat from most of their foods by next spring

4th LARGEST restaurant chain: Pizza Hut “claims it’s working on getting rid of trans fat (it’s nearly there, partly because pizzas have little or none)”

5th LARGEST restaurant chain: Wendy’s switched to trans-free frying oils earlier this year

6th LARGEST restaurant chain: "Subway never had much to begin with, but got trans fat out of its cookies this year"

7th LARGEST restaurant chain: Taco Bell pledged to largely eliminate trans fat from most of their foods by next spring

8th LARGEST restaurant chain: Domino’s Pizza is mostly trans-fat-free, “though a ‘garlic dipping sauce’ with seven grams of trans fat is made with partially hydrogenated oil”

9th LARGEST restaurant chain: "Starbucks removed trans fat from the one drink that had it and has announced that trans fat will be kept out of seasonal baked goods, though it remains—in high amounts—in some pastries in many stores. Starbucks uses regional bakers whose recipes may vary"

Other large restaurant chains that have switched or are switching to trans-fat-free vegetable oil for deep frying: Arby’s, Chili’s, Denny’s, Red Lobster, Olive Garden, Ruby Tuesday and the Macaroni Grill.

Restaurants did not have labeling as an incentive to change, according to the Center for Science in the Public Interest, so they’ve needed other incentives, such as “a lawsuit here, a municipal phase-out proposal there.”

BIG Cities:

Los Angeles: Meanwhile today, LA officials reached agreement today with the LA chapter of the California Restaurant Association to voluntarily phase out the substance within 18 months, after a failed attempt to ban it altogether. The association only has a few thousand members out of more than 34,000 restaurants in the county, so its full impact remains to be seen.

New York City: History was made on December 5th when the suddenly healthy sounding Big Apple became the first U.S. jurisdiction to ban artificial trans fat from restaurants by July 1, 2008. Support for the ban came from numerous radical groups, such as the American Medical Association, American College of Cardiology, American Cancer Society, American Diabetes Association, American Academy of Pediatrics, Columbia University Medical Center, Harvard University, and New York University.

Calgary: The head of the Calgary Health Region, Jack Davis, told the Calgary Sun newspaper the region is planning to chop trans fat from city menus, which would make it the first Canadian city to ban the processed substance.

Lest you think the U.S. is leading on this count, Denmark virtually banned artificial trans fat two years ago.


Sunday, December 31, 2006

In Case You Missed It in 2006

For those getting nostalgic about the past year, here’s a sampling of some of the big stories, which include:

Russia: 15 years – almost to the day -- after the fall of the Soviet Union, Russia and Vladimir Putin strong-armed Royal Dutch Shell into giving up control of that country’s single largest foreign investment, the Sakhalin-2 natural gas and oil project to the state natural gas monopoly Gazprom on December 22. Other partners in the project, Mitsui and Mitsubishi, acceded to halving their control in the project. Vice President Dick Cheney leveled the harshest criticism of the Kremlin by a world leader back in May when he accused it of using oil and gas as “tools of intimidation or blackmail.”

Food:

The U.S. Food and Drug Administration approved milk and meat from cloned animals for consumption by consumers, although it did not approve labeling of such food, with which surveys show more than 60 percent of consumers are uncomfortable. Interestingly, a key opponent of such foods, which would take some years to get into the commercial food supply, is a coalition of powerful food companies, led by the International Dairy Foods Association, which represents such large, brand-sensitive companies as Kraft Foods, Dannon, General Mills and Nestlé USA, who are concerned that the public will reject Dolly-the-Lamb chops (the Washington Post's line, not mine).

Trans-Fat: New York City adopted the nation’s first major municipal ban on the use of artificial trans fats in restaurant cooking on December 5, which the New York Times calls "a move that would radically transform the way food is prepared in thousands of restaurants, from McDonald’s to fashionable bistros to Chinese take-outs." Such moves were seen elsewhere across the country as Darden Restaurants, for example, switched to trans-far-free frying oil at all of its Red Lobster and Olive Garden chain restaurants.

Advertising (AKA Food Part 2):

The Walt Disney company announced on October 17 that “it plans to change its policy and use its (film and television) characters to market foods to children only for products that meet certain nutritional guidelines,” i.e. foods in which fat does not exceed 30 percent of calories in main dishes, saturated fat doesn’t exceed 10 percent of calories, and added sugar doesn’t exceed 10 percent of calories for main and side dishes and 25 percent for snacks.” This covers 60 percent of Disney-licensed products, although it does not include “special-occasion sweets such as birthday cakes and seasonal candy.” “Disney is also changing children's meals at its theme parks by including water or low-fat, 100 percent fruit juice with side dishes such as applesauce or carrots in place of soft drinks and french fries. Parents who want soda or fries will have to request them.” Interestingly, “Disney test-marketed 20,000 of the more healthful meals and found that as many as 90 percent of parents stuck with the more nutritious option.” The new initiative evidently did not include radio or television advertising on its corporate sister company the ABC television cable networks.

The William J. Clinton Foundation and the American Heart Association announced a voluntary agreement to follow guidelines for snacks and side items sold in schools with five major junk food manufacturers, Campbell Soup Company, Dannon, Kraft Foods, Mars and PepsiCo, on October 9 that calls for promoting “nutrient-rich foods, fat-free and low-fat dairy products and place limits on calories, fat, saturated fat, trans fat, sugar and sodium,” with details not clearly spelled out.

From the Do It for the Kids File, The R.J. Reynolds Tobacco Company and the Attorneys General of 38 states agreed to a domestic ban on its line of flavored cigarettes, which entailed a stop to cigarette names that allude to candy, fruit, desserts or alcoholic beverages, and avoid using scented promotional material, including scratch-and-sniff samples.

Renewable Energy: New York University announced the largest purchase of wind power, 118,000,000 kilowatt-hours, by any U.S. college or university, according to the Environmental Protection Agency’s Green Power Partnership Program. It will also be the largest purchase of wind power by any institution in NYC and the 11th largest purchase nationally, according to The Villager newspaper.

HP Surveillance: See blog post on October 2, Paranoid: Spying, the Hot New Trend

BP's Long Fall: See blog post on September 11, When A "Good" Company Goes Bad

Monday, October 02, 2006

Paranoid: Spying, the Hot New Trend

HP, or Hardly Private, makes one wonder what’s going on inside of the boardroom these days. “After reading of the lengths to which board Chairwoman Patricia Dunn and her squad of investigators went to find the source of board leaks who hasn't thought twice about what they say on the phone or in an e-mail—or asked, am I being watched?” Business Week asks in an Oct. 2 article cleverly entitled: Spy vs. Spy: Corporate Espionage

Radical NGOs are afoot – prepare for them before they prepare for you (“Keeping Ahead of Activists is a Dog-Eat-Dog World”), says the new Oct. 2 issue of PR News.

The IRS could be watching, as Glaxo SmithKline found out when they copped to the BIGGEST U.S. tax settlement ever of $3.4 BILLION on Sept. 11.

Even judges are not immune, as their previously secret corporate sponsored junkets have been changed by the Judicial Conference as of Sept. 19 (“New Rules Mean Shift Toward Accountability for Judiciary") According to the new rules judges are now “barred from accepting reimbursement for seminars hosted by organizations that do not publicly disclose their funding sources, speakers' names, and other information,” and “judges will have to publicly disclose their attendance (on junkets) on their court's Web site within 30 days.”

And you too could join in on the fun, albeit in a wholesome all-American way. Although not usually known for leading trends, the federal government of course has led the pack in this department as recent legislation suggests that I won’t get into here, but I’m actually talking about the new web site listing fed grants greater than $25G – the vegetarian-friendly Pork Tracker, which is required by the Federal Funding Accountability & Transparency Act of Sept. 26, 2006.

Follow the money trail in the comfort of your own home, without pretexting even.

Monday, September 11, 2006

When A "Good" Company Goes Bad


How much rope does a company with a good Corporate Social Responsibility (CSR) record get when they screw up?


Specifically, how much leeway does BP get for its atrocious record recently (See Timeline below) because of its groundbreaking role as the first oil company to publicly acknowledge global warming and the role of fossil fuels in it?

Do Exxon Mobil, Chevron, and Petronas get a free pass because they have not made the same effort? Or in fact actively fought such efforts, as in the case of the former (See Bloomberg, May 16, “Exxon-Funded Group to Run TV Ads Questioning Climate Change”)?

Is it possible for a non-governmental organization (NGO) to criticize one aspect of a transnational corporation’s conduct and at the same time praise another … without losing mission focus or support?

When a company promises to be socially responsible and violates that promise -- as with Google admitting censorship of searches for terms antithetical to the Chinese government violated its slogan Don’t Be Evil, it engenders greater disappointment than if it had not made the promise at all. BP is experiencing this, which brings new meaning to the term Googled.

PERSONAL ANECDOTE:
The first multi-stakeholder event I ever organized with NGOs, business, the U.S. and the United Nations took place in 1997 around the Kyoto Climate Change Conference and featured BP’s then-Vice President for External Affairs. The U.S. had not taken a leadership role at that point, while BP was out in front, having publicly left the deniers in the industry AstroTurf* front group named the Global Climate Coalition. During the Q&A, a lefty NGO commented “I never thought I would say this, but BP’s position is more progressive than the U.S. government’s.” It was true at the time.

BP TIMELINE:

September 2006 – BP executives get excoriated by elected officials and apologize during an appearance before a Congressional Committee hearing under oath, with one taking the 5th amendment against self-incrimination

August 2006 - Shut down the largest oil field in the United States, Prudhoe Bay, and its 400,000 barrels a day of production

June 2006 - U.S. Commodity Futures Trading Commission brings charges of price-fixing

April 2006 - U.S. Labor Department fined BP $2.4 million for safety violations at its Ohio refinery

March 2006 – BP’s Exploration Alaska subsidiary spilled more than 200,000 gallons of crude oil near Prudhoe Bay, the largest North Slope spill ever.

September 2005 - OSHA Fines BP Products North America More Than $21 Million Following Texas City Explosion

March 2005 - Explosion at its Texas City, Texas, plant claimed the lives of 15 workers and injured more than 170 others


*AstroTurf: A warm and fuzzy sounding nonprofit front group for industry that sounds like it has grassroots support for an environmental cause, i.e. the now disbanded Global Climate Coalition, which represented oil companies and campaigned against the validity of climate change.