In an earlier post, "The Salt Hath Lost His Savour," I commented negatively on Mayor Bloomberg's plans to pressure restaurants and food processors to reduce salt content. Campbell Soup and Progresso have demonstrated that markets react to consumer demand, and that government leaders continue to arrogantly overvalue their role.
The Food Business Review Soup reports in "Campbell to reduce sodium levels in some soups," quotes Douglas Conant, Campbell's CEO as stating,
Campbell continues to expand our lower sodium soups and in the process we are lifting the entire category to new heights. Our innovations in soup are making a food that is already nourishing even better for consumers and more compelling for customers. This is especially important now as consumers are equally focused on eating well while trying to stretch their food budgets.
Mr. Conant is discrete, avoiding mention of competition with Progresso and other soup processors. Peter Van Allen, writing for the Minneapolis St. Paul Business Journal, in "Progresso’s, Campbell's soup war reaches boiling point," describes the two food processors' competition for consumers.
“The ‘soup battle’ is a long standing one. MSG is the ‘villain’ these days as the public has become more aware. But Progresso and Campbell have been duking it out for years,” said industry consultant Lonny Strum, president of Strum Consulting Group Inc. Strum was a management representative on the Campbell account at advertising giant BBDO in the early 1980s...
The stakes are high: Sales of soups, sauces and beverages totaled $3.674 billion in the fiscal year ended Aug. 3, a 5 percent gain. Campbell’s overall sales last year were $7.9 billion.
“The back of the label is the new focus for an increasing number of people,” Michael Barkley, a Campbell’s vice president of marketing, said at the time.
Businesses expend considerable effort to satisfy their consumers. If consumers want healthy products, they will get it, if they want unhealthy products, they'll get that too. If they do not provide goods and services their consumers' desire, their competition will. Government's role as an intermediary for consumers is very small.
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Despite the small size of government's role, it is still an important role. Without government regulations, there is no guarentee that the food we get would be healthy. Let's say there is a company whose cookies are extremely delicious; people would respond by demanding more of the cookies. But let's say these cookies contained lead in them and the government did not have regulations for the company--the consumers would be demanding something that they did not know was harmful. So even if it seems like the government sometimes goes overboard with control, some control truly is necessary for the consumers' safety.
ReplyDeleteI saw an article in the paper today that talked about how the government is changing restrictions on photos being taken of the coffins of soldiers. The label of "Nanny state" on this blog reminded me of it because a speaker in the article stated that the relatives of soldiers should have the right to decide if they want pictures taken or not; this goes along with your belief that the government should not tell us what to do, which is why I mentioned it, even though it isn't directly related to economics...