The Defenseless American Corporation
You are not at the mercy of corporations. Corporations are at the mercy of you
According to their critics on the left and the populist right, American corporations are soulless psychopaths that grind up the environment, defenseless consumers, their own employees and even flop-eared puppies in their relentless pursuit of ever-greater profits for the greedy 1 percent.
There is some truth to this—as anyone who has been following, say, the Wells Fargo scandal can tell you. Corporations can lie and steal and cheat with the best of them.
But this is a different claim than the broader indictment—which holds that corporations are our dark overlords, driving the public to do their evil bidding despite the best interests and plain desires of The People. Anyone laboring under that misapprehension should take a look at the recent Wall Street Journal article "PepsiCo Wants to Sell Health Food, Consumers Want Chips."
For several years now PepsiCo has been trying to push "good for you" foods on the American public. Its CEO, Indra Nooyi, considers doing so (The Journal's words) an "ethical imperative." So the company has rolled out healthy product after healthy product: Init, a fruit and nut bar. Sproutzels, pretzels made from sprouted grains. Veggie chips. Probiotic drinks. And so on.
But the public just isn't that into them.
And there's no great mystery as to why: They don't taste as good as traditional potato chips, cheese puffs, and soda. "Taste is the biggest factor in a snack purchase, according to 66 percent of Baby Boomers and 53 percent of millennials in a March survey by consultancy Aleix Partners."
Pepsi has failed to meet budget targets for its healthy-snack foods, the story adds. "But buoyed by less-healthy snack brands such as Doritos chips and Cheetos puffs, PepsiCo's sales and volumes are on the rise and its profit margins have expanded in 15 quarters straight."
The healthy snacks are not a total flop: Some—Naked juice, for instance—have succeeded. But they succeed on a comparatively small scale. Healthy snacks make up less than one-tenth of all snack sales in the country. "The world's biggest food companies have been trying to ramp up healthier offerings for years, but consumers haven't give up their love for all things sweet and salty," The Journal says.
If corporations truly were the malignant oppressors they are made out to be in nine out of 10 Hollywood movies, then your break-room vending machine would be filled with tofu sticks and carrot juice. But it isn't, for the simple reason that the brief against corporate America has it largely backward: You are not at the mercy of corporations. Corporations are at the mercy of you.
The New York Times Magazine conceded as much—albeit very unintentionally—three years ago in a lengths to which the food industry goes to try to please the public: "In the process of product optimization, food engineers alter a litany of variables with the sole intent of finding the most perfect version (or versions) of a product. Ordinary consumers are paid to spend hours sitting in rooms where they touch, feel, sip, smell, swirl and taste whatever product is in question. Their opinions are dumped into a computer, and the data are sifted and sorted through a statistical method called conjoint analysis, which determines what features will be most attractive to consumers."
If we're all at the mercy of Acme Conglomerate, then why does it go to such lengths? Why doesn't Acme just stock the shelves with dried beets at $12.99 a pound and tell the consumer to like it or lump it? The answer is obvious: It can't, or it would go out of business by nightfall. Acme is stuck trying to make you happy.
Granted, corporations do have one tool—one very powerful tool—at their disposal, to make you buy things you don't want to buy: government. Ford Motor Co. can't put a gun to your head and make you drive a Ford instead of a Nissan. (Not without painful consequences, anyway—see Wells Fargo.) But the government can impose tariffs that raise the price of a Nissan so high you will go with a Ford instead. (A certain U.S. politician who recently won election to high office thinks this is a swell way to conduct American commerce.) Government can force you to buy health insurance, as Obamacare does through the individual mandate. And the government can outright ban the purchase of certain consumer goods, much as the FDA banned the diet supplement ephedra in 2004.
Of course, corporations can't meet every single consumer preference. For example: I have been nursing a resentment against Nabisco and its parent company, Mondelez International, over the disappearance from area grocery shelves of Mint Oreo Fudge Cremes, which are to die for. Why doesn't Nabisco cater to my whim?
Because my resentment is misplaced; my real beef is with my fellow consumers in central Virginia, who apparently have not been buying Mint Oreo Fudge Cremes in sufficient quantity to make it worth Nabisco's while. This could easily be fixed with suitably punitive legislation. How about it, Congress?
This article originally appeared in the Richmond Times Dispatch.