Maryland Senator Ben Cardin joins us to talk about the youth movement against gun violence, Russian sanctions, and more. D.C. Councilmember Mary Cheh shares her thoughts on relief for high water bills and news that D.C. Public Schools is taking over an all girls charter school.
PepsiCo, the largest food-and-beverage company in the country, says it is on a mission to produce healthier snack foods. It’s pouring money into researching and developing new products, but whether “drinkable oats” and coconut milk can compete with chips and soda is a separate question. We talk with the New Yorker’s John Seabrook, who recently toured PepsiCo’s headquarters, about the company’s vision.
- John Seabrook Staff Writer, The New Yorker
MR. KOJO NNAMDIAmerica is in the business of snacking. And by business, we're talking about eating habits that fuel some of the largest and most successful food and beverage companies in the food. Consider PepsiCo, the empire behind everything from Tostitos to Mountain Dew, a company with revenues larger than the gross domestic products of some countries.
MR. KOJO NNAMDIBut PepsiCo is trying to make its nutrition business a bigger part of its kingdom, a scientific mission to develop new, good-for-you products like drinkable oats and coconut water and retrofit old products like potato chips with re-engineered salt crystals that preserve taste while reducing sodium.
MR. KOJO NNAMDIBut does it make business sense for a company built on soda and snack foods to target the good-for-you market? And just how much influence can a company like PepsiCo have on our eating habits and our health?
MR. KOJO NNAMDIJoining us to discuss all of this from studios in New York is John Seabrook. He writes for The New Yorker. His piece "Snacks For a Flat Planet" appeared in the May 16th issue. John Seabrook, thank you for joining us.
MR. JOHN SEABROOKThanks for having me.
NNAMDIThe snack is big business. The products made by people like PepsiCo are in our lunch boxes, they're in our convenience stores, our vending machines. You know that if PepsiCo were a country the size of its economy would fit somewhere between Ecuador and Croatia, about 66th in the world. What fuels this business?
SEABROOKIt's basically soda. Soda's by far Pepsi's biggest and most profitable product because they've been making it for so long that they can basically remove the cost of making it and charge a lot of money and reap extraordinary profit. So soda and then potato chips is the other biggest product of Pepsi's.
SEABROOKLays potato chips -- it's interesting, people think of Pepsi as being sort of second to Coke. And that's true on the beverage side, but Pepsi is, by far, the largest snack food company in the world, 10 times larger than the next largest snack food company in the U.S.
NNAMDIIt makes so many products and manages so many brands that it's easy to lose track of them all. What sense can you give us for the scope of what this company does?
NNAMDIIt's worldwide. It's massive. It's -- the distribution of Pepsi is basically -- you can go to almost any country in the world, the most remote place and you'll see a bag of Fritos or a bag of Lays or a Pepsi. It's just a remarkable American company that has been around for more than a 100 years. And, you know, as I say, unlike Coke and a lot of the other beverage companies or unlike -- on the other hand, the food companies, Pepsi is a beverage and a food company and that makes it kind of unique.
NNAMDIDespite all of this, you write that PepsiCo's empire is built on shifting sands. What do you mean by that?
SEABROOKWell, the growth of markets in soda has stopped -- the market has stopped growing in the U.S. It stopped growing about 10 years ago. People are sort of slowly drinking less soda, probably because they're sort of -- some of them at least -- they're wising up to the fact that drinking a lot of soda is just no way good for you.
SEABROOKAnd also the potato chip side of things has stopped growing in the U.S. so -- and then the third part of that is, and this is more the political side, is that many people point to soda and chips as one of the main drivers for the obesity crisis. And insofar as Pepsi makes a lot of soda and a lot of chips, they could be seen as being responsible for the obesity crisis. And one could imagine scenarios in which, like the tobacco companies, Pepsi is forced to pay for some of the healthcare costs that it's products have caused and regulation, taxation, you know, not marketing to kids, lots of things could cut into Pepsi's markets. So that's the sense that I meant it's built on shifting sands.
NNAMDIWe're talking with John Seabrook. He writes for The New Yorker. His piece, "Snacks For A Fat Planet," appeared in the May 16th issue of the magazine. We're inviting your calls at 800-433-8850. What kind of influence do you think a company like PepsiCo, a company that makes everything from Mountain Dew to Rold Gold Pretzels has over our eating habits?
NNAMDICall us at 800-433-8850. On the other hand, what potential do you think a major snack food company like PepsiCo has to put a dent into the obesity epidemic taking place in the United States? That number again, 800-433-8850 or send us a tweet at kojoshow, an email to firstname.lastname@example.org or go to our website, kojoshow.org, join the conversation there.
NNAMDIJohn, you spent a good amount of time with PepsiCo CEO, Indra Nooyi, who says that her vision for the company is to become a good company, to transcend selling sodas and snacks and get into the good-for-you business, too, something she calls performance with purpose. What's that vision all about to you?
SEABROOKYes, Indra Nooyi's an interesting woman. She's not a salesperson as many of her predecessors in the CEO job were and she's not an operations person. She's been a corporate strategist throughout her career. So her job is sort of long-range vision rather than short-range and her task and her challenge is she's got this company that in the short-term is turning over a fantastic profits in soda and chips, but in the long-term, would be better served by being in products that are better for you, if not good for you.
SEABROOKAnd so it's getting from here to there and getting there without damaging the business here that is her great challenge and I think it's an open question as to whether she can accomplish that. In the last year, Pepsi lost ground to Coke, insofar as Pepsi is still fighting the cola war, which they sort have been doing for a long time.
SEABROOKPepsi would appear to be losing them, but that may be because in the long run, Pepsi's going to win the war. And the cola war is really just a little skirmish and the bigger war is in this sort of healthier products, which Coke doesn't seem to be particularly interested in moving into. So that's kind of Indra's challenge.
NNAMDI800-433-8850, where do snacks and sodas fit into your daily diet? Does your daily routine include a pack of potato chips at lunch or a soda at your desk? Call us, 800-433-8850. John, Nooyi's story is a story unto itself. She's a female CEO born outside the United States, a Hindu vegetarian leading an empire in the snack food business.
SEABROOKI know. It's remarkable isn't it? A vegetarian, who would've thought? And yes, the first woman to lead the company. But really, it's a credit to Pepsi. PepsiCo's a very sophisticated company. They actually have a quite distinguished record of hiring -- they were the first company in the U.S. to hire a black man as vice president -- to appoint a black man to a position of vice president and they have a distinguished record of African-American hiring.
SEABROOKThey also -- actually, Indra's not by any means the only person born outside the U.S. who is in a big job at Pepsi. So, you know, I think that it's to Pepsi's credit that they can do that. And she's also a very gifted communicator. She really has this sort of belief in her eyes when she talks about what she wants Pepsi to be and she's very persuasive. And yes, she believes that Pepsi has to do more than just do well. Pepsi has to do good.
SEABROOKBecause Pepsi is more than just a business, Pepsi is a way of life and she wants -- she talks about how she wants her employees to come bring their whole person to work. So it's not just their business side to work, but their role as a father or as a member of the community. She wants that in the company, too.
NNAMDIWell, how does she make the sell for this vision of developing the nutrition side of the business or is it more of a brand image thing, like when BP tried to push the Beyond Petroleum brand?
SEABROOKRight. It's always a tough question because, of course, there is image building here and, of course, they're sort of trying to -- insofar as Pepsi is in danger of being regulated, it's better to show that they're dealing with their own problems.
SEABROOKBut basically, it's science. She's invested a lot of money and hired a lot of top scientists from the pharmaceutical industry and also from the public health side of food matters and so -- and she's got two things that they've already done.
SEABROOKOne is a new salt, designer salt. They studied a lot of people eating their potato chips and they realized that we only taste about 20 percent of the salt that's on the potato chips and the rest we swallow. But in order to get that sensation of salt in the mouth, that tingling feeling along the tip of your tongue and the sides of your mouth, you need to have a lot of salt.
SEABROOKEven though you don't ultimately end up tasting it all, it has to be there for that kind of rush. So could they design a salt that produced that same, what they call a taste curve, without using as much salt? And in fact, they were able to.
NNAMDIThey deputized a former endocrinologist from the Mayo Clinic and you tasted the chips yourself after they'd come out of something called a salt shower. What is that and how did they taste?
SEABROOKYes, they -- I compared the new salt, which is called 15 Micron Salt because it's 15 microns in size, it's smaller, with the old salt. And in fact, I couldn't tell the difference. And that new salt is going to be on most of Pepsi's salty snacks by the end of 2012.
SEABROOKAnd it will mean that we ingest 40 percent less sodium every time we eat a bag of potato chips, which, you know, when you multiple that by how many bags of potato chips Pepsi makes, that's a significant reduction of the amount of salt, not only in the U.S. diet, but in the diet worldwide.
SEABROOKSo that's one thing they've done. And then, the other thing, which is perhaps even more significant, is they're about to launch a new product, which is a Pepsi that tastes exactly like regular Pepsi, but uses 60 percent less calories in it. And the way they've done that is they've used these things called sweetness enhancers, which are not sweet in and of themselves, but which work with sugar or corn syrup, in the case of Pepsi, and make it taste sweeter than it would so they can use less sugar and...
NNAMDIWell, the fascinating thing about that is because you write that PepsiCo actually has a robot equipped with human taste buds that it's using to develop the Holy Grail of zero calorie sweeteners. What's the story behind the robot?
SEABROOKIt's pretty neat. They took human cells and also some animal cells and they grew them and they inserted the DNA sequence for -- you know, humans have five different taste buds in their mouth and they inserted the code for those and they wired it up to a computer. And what they do is they have these trekkers, they call them.
SEABROOKThey go all around the world. Wherever a Pepsi can go, they can go and they, you know, particularly to the places -- centers of diversity in China and, you know, Central Asia. And they collect material that is not sugared, but is naturally sweet and they send it all back to the lab and they feed to this robot. And the robot, you know, rejects almost all of it because it has, you know, a bitter taste or it doesn't taste sweet or, you know, whatever else.
SEABROOKBut it occasionally finds something that fits the parameters that Pepsi's looking for and then they refine that and then they sort of put it on some of their products and then they start tasting it on humans. So the robot -- before, humans had to taste all this stuff and it took a long time. And it wasn't always very pleasant and sometimes I guess it was a little dangerous because you didn't really know exactly what some of the stuff was. But now, the robot can taste it all.
NNAMDIYou can call -- you can join this conversation at 800-433-8850. Do you think a major snack food company like PepsiCo has the potential to put a dent in the obesity epidemic taking place in the United States? Call us now 800-433-8850. I asked that question, John Seabrook, because on the one hand, we have the academic and food author, Marion Nestle, who said the best thing that PepsiCo could do for worldwide obesity would be to go out of business.
NNAMDIBut on the other hand, it's one thing to develop these products and another thing to advertise them and convince people that they want them. Another analyst, Ali Dibadj, who is with Sanford Bernstein, told the Financial Times in March that PepsiCo has to realize that at its core, they are a sugary fatty cola company and people like that. Could you tell us what you were told about that part of the strategy, whether it's about soda or chips? How do they get people to like the stuff?
SEABROOKWell, I don't think -- they've seen to have done a pretty good job getting people to like that stuff. But in terms of getting people to like the new stuff...
NNAMDIThe new stuff I'm talking about.
SEABROOKYeah. It's a very tricky problem because a lot of people, you -- you can test people in focus groups. You can ask them would you choose the product that said, you know, um, no artificial flavoring or -- or, you know, 50 percent less salt, or would you choose the old product? And most people who are -- put that question in a focus group will say, oh, well, I'll choose the healthier product, but they don't always really mean it.
SEABROOKAnd, in fact, Pepsi has done MRI studies on some of the people who are in these focus groups and has discovered that, you know, what they say and what they really mean are not always the same thing. Also, then you've got this sort of what they call the heavy users, which are the people that eat a lot of chips and are basically your core customer. And those people are definitely not interested in -- they want their Cheetos. They want their Cheetos the way they are.
SEABROOKThey don't want some, you know, light Cheeto. So, you know, whatever you do, you can't alienate those people because, you know, they're your best customer. So it's a very difficult thing, and you can add to that the fact that a lot of what we taste when we taste a snack food or a -- or drink a cola, is not what's really what's in the product, but it's the brand and it's the marketing, and it's the associations you make with that taste. And that goes back maybe to your youth, you know, family time...
NNAMDII'm glad you brought that up because we got an email from Jessica in Gaithersburg who writes, "I'm eating my lunch. I'm washing down a Diet Pepsi with a bag of Rolled Gold pretzels. I had a Naked Juice smoothie for breakfast."
SEABROOKSo did I.
NNAMDI"I had Quaker Oats yesterday. Apparently, I've outsourced my diet to the Pepsi Company." Do you have brand loyalty to a snack or soda? Call us. 800-433-8850. Do you consider yourself to be a Coke person or a Pepsi Person and what pray tell is the reason for that loyalty? 800-433-8850. Send us a tweet @kojoshow, email to email@example.com, or go to our website, kojoshow.org. Ask a question or make a comment there.
NNAMDIIt's a Food Wednesday conversation on snacking and the science of snacking, and the involvement of PepsiCo in your snacks. I'm Kojo Nnamdi.
NNAMDIWelcome back to this Food Wednesday conversation on the science of snacking or what PepsiCo might have to do with your snacks. We're talking with John Seabrook. He writes for The New Yorker. His piece, "Snacks for a Fat Planet," appeared in the May 16 issue of the magazine. We're also inviting your calls at 800-433-8850. Where do snacks and sodas fit into your daily diet? Does the routine include a pack of potato chips at lunch, or a soda at your desk? Call us 800-433-8850.
NNAMDIJohn Seabrook, Pepsi took a lot of heat for its refresh marketing campaign when it promised money for people with ideas that can, quoting here, "change the world." What happened with that campaign?
SEABROOKVery interesting thing to study. Pepsi, the -- the refresh campaign was basically an online play -- a social media play. It invited people to go online and vote for -- choose from among a number of different products that people had come up with, all of which had this common theme, making the world better. And the winners, in terms of the voting, were given grants by Pepsi between five and up to $150,000. And it was very successful as a social media play.
SEABROOKIt got a lot of votes. It got a lot of Facebook likes. But what it didn't do was sell Pepsi, and that may be because people who are -- care about making the world a better place may not be the same kind of people who drink a lot of soda. Or it may just be something like -- simpler than that, that what you need to sell soda, which Coke does very well, is you need to hear the sound of it kind of pouring out of the opening and the little bubbles, and the pictures of the stuff.
SEABROOKAll that stuff they call the brand intrinsics that makes you kind of just want to go out and drink one. And this sort of intellectual idea of Pepsi as being kind of, you know, good and Indra Nooyi's vision of a good company and making the world a better place, may make you like the company more, but it doesn't seem to make you want to go out and drink a Pepsi. So that was the lesson learned, I think, from the Pepsi Refresh campaign.
SEABROOKAnd I think they're going in the other direction pretty strongly. They're sponsoring this new Simon Cowell, you know, "American Idol"-like spinoff. You know how they -- "American Idol" had Coke always? Well...
SEABROOK...this new one is gonna be Pepsi, and they're gonna have a Pepsi sitting in front of everybody during the show. So we'll see how that goes.
NNAMDIHere is Marisol in Leesburg, Va. Marisol, you're on the air. Go ahead, please.
MARISOLThank you, Kojo. And I am -- this is -- I'm delighted to be in the show, and this is a subject matter very dear to my heart. I own an organic manufacturing company that produces a snack called Totes. It's a nutrient-rich product and extremely healthy. And we find it very hard to compete in the industry with the conglomerates, with the advertising, with the distribution, and we would like to see some formal initiative being developed that gives us a bit of a -- of a reach out.
NNAMDIWell, ironically, John Seabrook, if in fact the PepsiCo initiative that is being contemplated and worked on by the CEO does go forward, that should provide an opening for companies like Marisol's, should it not?
SEABROOKIt might. Or it might mean that they're getting into their business as a competitor, or maybe Pepsi will buy Marisol's business. That's certainly what they did with Naked Juice and, you know, Sobe Life Water and a lot of these brands that are on the kind of nutrition side were independent companies that Pepsi bought.
SEABROOKI think what I'd say to Marisol, and this is an interesting kind of larger theme, is what I gather from talking to Pepsi is that some people think that what we -- what we want from snacks is going to change. That the idea of just kind of mindlessly eating something that fills you up temporarily and is tasty is going to fade, and people are going to want what they call function or performance from their snack.
SEABROOKThey're gonna want it to do something like in the way that Gatorade you drink after working out and it replaces your electrolytes, that model is a very important model for Pepsi, and I think they're trying to kind of expand and integrate that into a lot of other foods. And to the extent that they're going to kind of promote this idea of using snacks in a new way, I think that could help a lot of the people out there that are making healthier snacks.
MARISOLWell, I mean, I would -- I really -- this is exactly what we have always believed, that we provide a functional food that makes eating efficient.
NNAMDIWell, Marisol, a lot of people might not realize that the Naked Juice product they see at the store is actually a PepsiCo product. And John Seabrook writes that PepsiCo is working on everything from coconut water to drinkable oats. John, can you tell us, and tell Marisol, what are some of the other products that American consumers can expect to see coming down the pike?
SEABROOKYeah. A big theme of Indra Nooyi's presentation to me at least, was this idea of what she called snackified drinks and drinkified snacks, and that's this kind of blending of food and beverages basically. I mean, you can see the smoothie as maybe the beginning of that, and the way in which smoothies have become so popular. It's almost -- they're so thick sometimes, it's almost like eating something. And so what they're talking about is taking, for example, oats.
SEABROOKThey have a new product that they're going to introduce next year. It's going to start in Mexico and then come here, and yeah, it's a drinkable oats product. It combines oats, dairy and some fruit flavoring. And you squeeze it, and, you know, it's -- I liked it. It was pretty tasty. I don't know if it's gonna be a big seller. They're also doing a lot with soups, American -- cold soups, which has never been a big draw for Americans. But they think they can educate Americans to eat more, you know, gazpacho and vichyssoise, and that these could be snacks that are healthy.
NNAMDIYou liked them, didn't you?
SEABROOKI loved them. I thought the gazpacho was great, really tasty. I'm not -- I mean, I like gazpacho anyways, but, you know, those are two products. They also have another product out now which is called Tropolis, which is like sort of squeezable fruit thing that, you know, supposedly is pretty good for you. It has a fair amount of sugar in it, I think, but then again, a lot of these things do. But, you know, it's kind of a drink -- or snackified drink, I guess you'd say.
SEABROOKSo anyway, that's -- this a whole new category that they're talking about.
NNAMDIMarisol, thank you for your call. We move onto David in Rockville. David, you're on the air. Go ahead, please.
DAVIDHi. Good afternoon, Kojo. Great show. And I just had a quick question about a sugar substitute. Stevia has been around a long time. There's some new brands or new kind of formulations of it that are less bitter and actually taste very much like sugar, and I'm pretty much a junk food addict. So I appreciate this, and I wonder have you looked into that, the kind of latest versions of Stevia for use in your products?
SEABROOKYeah. Yeah. They're -- I tasted quite a bit of products with Stevia. Stevia, for people, is -- comes from a plant, and it has zero calories, I believe. But, yeah, the taste is the issue. It's never tasted exactly like sugar, and Pepsi is certainly working on it, and they're using it in a number of their products. And I don't think they've totally cracked it yet. I do think there's still that kind of -- I think it's a slightly -- it's that diet taste to me.
SEABROOKIt's a little bit that aftertaste, slightly metallic taste, but, you know, I think they're still going forward with it and they have high hopes for it. So we'll just have to see.
NNAMDIThank you for your call, David. Here's Maggie in Calvert County, Md. Hi, Maggie.
MAGGIEHi, Kojo. Good to hear your show.
MAGGIEI just wanted to say I really like the idea of the 60 percent less sugar in soda. I think that's a great idea, or 60 percent less calories, I believe, is what the gentleman was saying.
MAGGIEAnd I don't know. I always look at things like soda and chips and things of that nature as fun foods, like the all-American picnic-type foods and beverages. And I'm one of those kind of moms -- I have children that if I want my kid to eat healthy, you know, I put all -- I give them healthy, but I always give them a choice. And I think -- I don't know if Pepsi and Coca-Cola and all these companies have really contributed to the big -- that we've become such an obese nation. I think it's just sort of lifestyles, and I think people are getting better about it.
MAGGIEAnyway, I'll listen for your comments.
NNAMDIWell, I gotta tell you that John Seabrooks writes that from the perspective of dietary guidelines, PepsiCo's director of Global Health Policy, Derek Yach, seems to have been a lot more successful there than he was at his old job at the World Health Organization. How so, John?
SEABROOKYeah. It's interesting. Derek Yach is one of the people in the piece. Derek Yach had a big job at the WHO and in the early 2000s he tried to put forward some guidelines about, you know, sugar and salt in people's diets, and was defeated by -- basically by the food industry that didn't want to particularly limit sugar in what people ate. But -- and then Indra Nooyi hired him, and she said, well, look, you're frustrated.
SEABROOKMaybe you can do exactly what you were doing at WHO, but you won't have to worry about, you know, the political problems that you dealt with there because it's up to me. If I tell you I want less sugar and less salt, we're gonna have less sugar and less salt. And in fact, Derek has been the architect for these new products that have less sugar and salt, and has been much more successful than he was at WHO. I mean, it's interesting.
SEABROOKI think a lot of people, given the choice, will choose a less caloric soda, but a lot of people are still kind of worried about diet drinks. They just, you know, they decided they don't like diet drinks. It's been shown that people who eventually sort of do drink diet drinks ended up drinking them and liking them, but it's hard to get people kind of over that hurdle. So this new drink is not going to be marketed as a diet drink. It's just basically a different kind of Pepsi that happens to have less calories in it.
SEABROOKAnd they may not even market the fact that it has less calories in it. I mean, that's certainly what they're doing with the salt. This is called stealth health. That it's more effective to just go ahead and make the products healthier, but don't market it as a healthier alternative because a lot of people won't eat it if they think it has, you know, less salt or less sugar, because they like what they like. But, you know, if you give it to them and they can't tell the difference, then you've effectively, you know, done your -- what you set out to do health wise, and you don't have a marketing problem.
NNAMDIMaggie, thank you for your call. We only have about 45 seconds left, John. But we had a conversation a few months ago about moves Wal-Mart has made to put healthier food on its shelves. Big box stores like Wal-Mart account for a lot of the groceries that Americans buy. What sense did you get from your time at PepsiCo about the kind of influence a food and beverage company like PepsiCo can have on the health of the country? You know have about 45 seconds.
SEABROOKYeah. I would -- I mean, look at what Michele Obama is doing with Let's Move, and it was Mrs. Obama that stood up there with the executives from Wal-Mart and promoted this -- making fruit and vegetables more accessible among other things. And I do think that, you know, with someone like that, someone incredibly charismatic like Michele leading and making that the centerpiece of her time in the White House, you really sense that maybe there is this kind of sea change that's beginning to happen, and that the more enlightened companies are beginning to get it.
SEABROOKAnd I think the other companies are sort of sitting on the sidelines and saying, okay, well, let's see how it shakes out in the market before we commit. But I think we're gonna see real change in the next few years and, you know, I think we have Mrs. Obama to thank for that more than anybody else.
NNAMDIJohn Seabrook writes for The New Yorker. His piece, "Snacks for a Fat Planet," appeared in the May 16 issue. John, thank you for joining us.
SEABROOKThanks, Kojo. It was fun.
NNAMDIAnd thank you all for listening. I'm Kojo Nnamdi.
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