From the Executive Director: November and December 2002

From the Executive Director

Do you want fries with that?

Recognize that phrase? Unless you have been living in solitary confinement for the last 10 years, this phrase should be instantly recognized by anyone who has frequented a fast-food restaurant. Over 50% of the money spent for food in the United States is now spent on food prepared outside the home. This is a massive business. Some of the world’s largest corporations are those involved in the food service industry.

As large global corporations, these food service companies are driven by financial goals. What’s wrong with that? Aren’t we all motivated to some degree by financial goals? So what makes these large corporations different from the average person?

I propose that there are two major differences. First, these are extremely large, publicly-held corporations. As such, they are driven by the goal of maximizing the value of the company to its shareholders. This is the first thing you learn in college-level finance courses. Second, a large corporation, although considered a "legal person" for tax and legal purposes, lacks innate morals and ethics.

I will acknowledge that there are certainly individuals with morals and ethics employed by these corporations. I also acknowledge that if there are enough individuals with similar attributes and beliefs, their collective presence can effectively guide a corporation to "do the right thing." This is especially true in smaller corporations. However, the fact remains that, ultimately, the corporation answers to its shareholders and board of directors. In addition, the sheer size of these huge enterprises dilutes the impact of individuals. We certainly see evidence of the lack of morals and ethics demonstrated in the recent financial scandals rocking corporate America.

The more I interact with the food service companies and their trade associations, the more I am convinced that they are driven solely by a financial plan to maximize stock value, and little else. This leaves little room for morals and ethics (let alone science!) as marketing is allowed to become the "soul" of the corporation. The strategy is to do whatever it takes to sell more burgers. The restaurant chains make decisions based on the desire to appear to be doing what is right, because any negative publicity might mean that fewer burgers will be sold. It is the fear of getting caught that motivates the corporation to at least appear to be doing the "right thing."

"Do you want fries with that?" is an example of a tactic resulting from the goal of maximizing value for the shareholder. It is not a tactic that holds any value or benefit for the restaurant customer (unless your desire is to gain weight and raise your cholesterol level). It is a proven psychological technique used in sales and marketing to sell more fries. Impulse buying of more fries means higher sales and more profits, leading to a higher stock value.

As consumers, we make our own choices on where we dine and what we eat. We have the free will to resist or to surrender to the "spin" of marketing. Unfortunately, the same exercise of free will may not be available for the suppliers to the large food service companies. The danger to suppliers, including the pork industry, is created when marketing strategy moves backwards into the supply chain.

Don’t get me wrong: I do believe that suppliers must listen to their customers. The problem, however, arises when the needs of the customers are filtered through the marketing departments of large restaurant chains. In addition, the perceptions offered to the companies may be tainted and inordinately biased by those with an agenda to advance animal rights or meat-free diets. A significant impact on suppliers occurs when demands become costly, unreasonable, and not truly based on customer needs or wants.

Nearly every major fast food restaurant chain in the United States is considering the development and adoption of guidelines for livestock production. The guidelines for pork producers will likely cover the use of antibiotics, gestation housing, and other common production practices. The restaurant chains hide behind their contention that these are "societal issues" that transcend the need for scientific or objective examination. You can be sure that these corporations wish to expeditiously put these issues behind them so that they can go back to selling more burgers. Problems will arise, however, when the costs of meeting the guidelines are dumped on the producers with no incentive other than maintaining access to that particular market.

It is time for those of us in the pork industry to express our opinions to the food service corporations. As I said before, consumers can exercise free will in choosing where we eat and what we eat. Send a letter to your favorite restaurant chain and ask that science be used to balance emotion in production guidelines. Take it one step further and boycott those restaurant chains that are unreasonable in their demands on suppliers. (If you do boycott a restaurant, be sure to write and tell them why.) Assert your right to advance your own activist agenda. You may be sure that our opposition is doing just that.

Perhaps one day in the future, the lead story on the nightly news will be that pork producers and veterinarians were protesting a restaurant chain’s policy on pork production. Can you imagine the image of filling the parking lot of a fast-food restaurant with tractors, vet trucks, and picketers protesting unfair treatment? An idle daydream or the product of corporate reality? We may not have a choice!

–Tom Burkgren