Discussion on Marketing to Children 14 September 2009 Classified - Internal use Marketing to Children 2008 ICBA commits to not place any marketing communication in any paid, third-party media whose audience consists of 50% or more of children under the age of 12. This covers broadcast (TV and radio), print and digital media (including internet and phone messaging) as well cinema (including product placement). The scope of this commitment includes all non-alcoholic beverages other than water (mineral, source and purified), fruit juice, dairy-based beverages and products specifically formulated to address critical nutritional deficiencies. ICBA also states that it recognizes the need to review other forms of marketing practices (including licensed characters, sponsorships and other forms of marketing communications) in channels which are predominantly related to children under 12 (e.g. primary schools). This work is to be completed by 2009 2009 Marketing to Children policies in place at The Coca-Cola Company and PepsiCo Independent global monitoring by Accenture confirms compliance with respective policies The Coca-Cola Company and PepsiCo have completed internal reviews on marketing practices and school sales. Classified - Internal use Accenture Monitoring Results Accenture Marketing Sciences independently monitored 12 markets for TV and Print marketing, and 6 markets for internet. To ensure full transparency, Accenture selected all markets to be monitored after the media buys had already been made by the advertisers. No advertiser knew which markets were being monitored. Accenture conducted the monitoring exercise as a random sample of the companies’ global media buying practices In order to present a global snapshot, Accenture selected the following markets for TV and print monitoring (those in red also included online): • Argentina, Canada, China (Shanghai), India, Indonesia, Mexico, New Zealand, Russia, South Africa, Thailand, Ukraine and USA. Classified - Internal use Classified - Internal use International Food & Beverage Alliance Since the launch of the WHO’s Global Strategy on Diet, Physical Activity and Health in 2004, companies have made substantial individual progress in addressing health and wellness concerns. In 2008, IFBA was formed in order to provide further impetus to the global food and beverage industry to work together in a number of key areas, recognized by the WHO and others as crucial to implementing the 2004 Global Strategy. IFBA companies represent 92% of global food and nonalcoholic beverage ad spend Classified - Internal use IFBA’s Five Commitments In a letter signed by the CEOs of each of the IFBA companies, we committed in 2008 to a set of five actions over the next five years intended to extend on a global basis the work which is already underway in different parts of the world. Five Commitments in Five Years: We will continue and increase our efforts to: 1. Reformulate products and develop new products that support the goals of improving diets 2. Provide easily-understandable nutrition information to all consumers 3. Extend our responsible advertising and marketing to children initiatives globally 4. Raise awareness on balanced diets and increased levels of physical activity 5. Actively support public-private partnerships that support the WHO’s Global Strategy Classified - Internal use WHO Working Paper Content 1) Approach – self-regulatory, regulatory or something in between a. The Working Paper can be interpreted as making a case for a regulatory or statutory scheme. 2) Criteria a) Definition of a child – research indicates that, for the purpose of marketing, the age of a child is “under 12”; however, the Working Paper leaves open the option of up to 18. b) Daytime threshold – restricting advertising between 6am and 9pm c) Audience profile – IFBA and ICBA policies restrict advertising in mediums where 50% of the audience is under 12; however, the Working Paper includes a range that goes to 5%. d) Power vs. Exposure – for the purposes of advertising to children, which is more important, “power” (creative content) or “exposure” (what children are actually viewing)? Classified - Internal use WHO Process May 2007 WHO Member States ask the WHO Secretariat to develop recommendations on marketing to children June – August 2009 A working paper was distributed to Member States and regional WHO offices soliciting their input and feedback on suggested approaches August 31, 2009 Industry Dialogue with the WHO to discuss our input and feedback on the Working Paper. NGOs had their Dialogue on September 1 September – November 2009 WHO Secretariat will draft a suggested recommendation document January 2010 The WHO Executive Board will consider the recommendations as an annex to the Noncommunicable Diseases agenda item May 2010 Recommendations to be voted on at the World Health Assembly Classified - Internal use Local Pledges 2006 Union of European Beverages Association (UNESDA) Australian Beverage Industry The U.S. Children’s Food and Beverage Advertising Initiative (15 companies) Canadian Children’s Food and Beverage Advertising Initiative 2007 (18 companies) The EU Pledge (11 companies) 2008 Thailand Children’s Food and Beverage Advertising Initiative (7 companies) The Responsible Children’s Marketing Initiative of the Australian Food and Beverage Industry (16 companies) South Africa Pledge on Marketing to Children 2009 (24 companies) Romanian Ethical Code for Food Products Advertising Targeting Children (9 companies) Brazil Public Commitment on Food and Beverage Advertising to Children (24 companies) Classified - Internal use Local Pledges Russia Switzerland Turkey India UAE Peru Chile Classified - Internal use Philippines Partnerships As an Industry we continue to explore partnerships with credible NGOs and institutions Ongoing discussions with the World Heart Federation who has asked us to consider a global school sales policy. Classified - Internal use WHF Engagement 1) Dr. Pekka Puska, WHF Board President, attends WEF in Davos 2) In March, Dr. Puska writes to Mr. Kent and Ms. Nooyi to continue the dialogue on partnering for a global school availability policy with the hopes of an agreement by September 2009 3) Mr. Kent and Ms. Nooyi respond indicating our willingness to engage with the WHF 4) In late June, Dr. Puska writes to Mr. Kent and Ms. Nooyi hoping to come to an agreement by December 2009 5) ICBA responds on behalf of KO and PEP stating we can only commit to a dialogue on direct sales to primary schools and that we’re willing to explore the idea of test markets 6) Stephen Kehoe and Jorge Casimiro meet with Helen Alderson, CEO of WHF, in Geneva Classified - Internal use WHF Meeting with Helen Alderson 1) Encourages both PepsiCo and The Coca-Cola Company to engage in test markets on a global school sales policy • WHF will not partner with us on a test market program; however, we can engage them for assistance locally 2) WHF made it clear that they will only partner with us if we include both primary and secondary schools from the outset 3) WHF is willing to consider an approach whereby certain beverages are allowed in primary and secondary schools (as opposed to outright restriction on all beverages) • We challenged her to think about the portfolio mix that would be appropriate – let’s focus on what we should sell versus what we can’t sell 4) Compliance monitoring is necessary Classified - Internal use WHF Next Steps 1) PepsiCo and The Coca-Cola Company will continue to explore the idea of test markets and identify appropriate test markets 2) Continue to engage with WHF on appropriate product mix 3) Determine if only including primary schools might be amenable to the WHF Classified - Internal use