Consumers are key to a K Street icon’s revival
Grocery manufacturers group looks to transform itself as Consumer Brands.
The Grocery Manufacturers Association, a century-old lobbying group, was on the cusp of its demise. It had lost some of its biggest, best-known member companies, was bleeding revenue and its then-chief, Pamela Bailey, was on her way out.
That was two years ago. Now, a new president and CEO, Geoff Freeman, has officially peeled off the grocery label and has embarked on a transformation of the newly christened and slimmed-down Consumer Brands Association. Even by his own estimation, he has limited time to resuscitate the struggling trade association, which represents “consumer packaged goods” and includes members such as Colgate-Palmolive and Clorox.
“There’s no doubt the finances are under pressure,” said Freeman, who left a gig atop the American Gaming Association in 2018. “We’ve got to have this place turned around within two years, it’s that simple.”
The Consumer Brands Association’s budget for this year is about $20 million, down considerably from just five years ago when it was close to $40 million. The shortfall is largely a reflection of the high-profile exits of dues-paying companies such as Nestlé, Mars, Tyson Foods, Hershey and Kraft, among others who left amid policy disputes over food labeling for genetically modified organisms, climate change and other matters. The group’s staff is down to less than 40 employees, from a previous high of more than 65.
Despite Freeman’s overtures to those departed members, none has returned. Some of the former members, including Nestlé and Mars, launched a new effort, the Sustainable Food Policy Alliance, which Mars lobbyist Brad Figel says has gone well. Figel said he wishes Consumer Brands “great success,” but his company isn’t looking to rejoin.
So, in an effort to boost revenue, Freeman reached out to newcomers. He has wooed Beam Suntory, which owns Jim Beam and Maker’s Mark bourbons, and Recess, a beverage-maker that features hemp extract among its ingredients. The accounting firm PricewaterhouseCoopers has also partnered with the association, “paying to have a degree of exclusivity” to CBA’s members, Freeman said. So has Coyote Logistics, a supply chain and freight company.
“Bringing on new members is a process. It’s a lengthier process than I wish it was,” Freeman said.
The old Grocery Manufacturers Association, in Freeman’s diagnosis of its problems, aimed to influence regulatory agencies and Congress. But that didn’t take into account a radical shift in consumer behavior.
“The consumer regulates the industry long before Washington ever gets around to it,” Freeman said during an interview in the group’s offices in Arlington, Va.
He has an oft-repeated story to illustrate what he means by that. If his wife sends him to the grocery store for ketchup, and he returns with ketchup with high-fructose corn syrup among the ingredients, he will face a question.
“She’s going to say to me, ‘Why did you get that?’” he said. “And I’m going to say, ‘Why didn’t I get that?’ … There’s no government warning on high-fructose corn syrup. But she read a blog from her cousin’s uncle’s brother-in-law that said we shouldn’t have high-fructose corn syrup, and there you go, it’s done.”
The old GMA’s approach, he added, was something along the line of “you’ll eat high-fructose corn syrup, and you’ll like it,” when many of the member companies were heading in a different direction.
“That power of the consumer is what is regulating the industry today and forcing the industry to try to skate to where the consumer is going,” Freeman said.
Advocacy, though not just federal lobbying, is a top priority of the group, according to Freeman. Some of the policy issues include setting standards for recycling and packaging as well as transportation matters.
Jeffrey Harmening, CEO of General Mills, who chairs the Consumer Brands board, said Freeman and his team, which includes executive vice president of public affairs Bryan Zumwalt, are taking the group in the right direction.
“They’ve really re-centered us on the consumer,” Harmening said. “It sounds like a small thing, but in today’s environment, the consumer has a lot of sway.”
The group is making inroads on Capitol Hill, too, he added.
“We’re getting interest from a lot of members of Congress, in the House and Senate, for the agenda we have,” Harmening said. “It’s clear to me we’re making progress.”
Freeman said he sees a niche for his group between the big business organizations, such as the U.S. Chamber of Commerce, and the sector-specific trade groups, such as the American Beverage Association.
“Advocacy has to be the bedrock of the organization,” he said. “As we rebuild this, we have to become the greatest advocates for the industry, a powerhouse in advocating for the industry. So we have doubled down.”
The group disclosed spending almost $2.3 million on federal lobbying, up from 2018 when it spent just shy of $2 million but down from its high points of $14.3 million in 2013 and $8.5 million in 2015. Freeman said not all of what he considers advocacy, including public relations and economic data research, counts as federal lobbying for the purposes of public disclosures.
The group’s members — including Del Monte Foods, PepsiCo and Coca-Cola Co., Conagra Brands and Sunny Delight Beverages Co., among others — have common issues: packaging, recycling, labeling, transportation and logistics.
“Whether they’re selling peanut butter, cereal, detergent or some other form of household product, they tend to look at the industry the same way,” Freeman said. “The commonalities between Procter & Gamble and Coca-Cola, between General Mills and Clorox, are far greater than we ever acknowledged as an association.”
Recycling standards and rules vary city by city, so the Consumer Brands group is pushing for national standards, for example, aiming for offense instead of defense, Freeman said.
“We have a lot of work to do,” he added.