KO Coca Cola Company

By Mike Esterl 

To watch the heat rising on the soda industry, take a look at San Antonio.

Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group Inc. have been pouring millions of dollars into fitness and health programs in the Texas city, where about two thirds of adults are overweight or obese and the diabetes rate is roughly twice the national average. Their message: Good health is about exercise, not just fewer calories.

Those efforts, begun in 2012, paid a big dividend last year when San Antonio's city council balked at a public-education campaign proposed by the city's health director that aimed to reduce soda consumption. Several council members argued soda was being singled out unfairly; some said the effort smacked of a "nanny state."

Then, after it looked like the issue was going away, Bexar County--which includes and surrounds San Antonio--started to issue its own warnings about soda. The countywide campaign--called "Is Your Drink Sugar-Packed?"--has launched a website and distributed more than 5,000 posters and fliers since June. Three digital billboards began running the slogan last week and organizers plan to advertise on television. "You wouldn't eat 16 teaspoons of sugar. So why drink them?" says a campaign pamphlet, referring to the amount of sugar in a 20-ounce soda bottle.

The reversal highlights one of the soft drink industry's biggest challenges: constantly fighting the perception that soda is really bad for you. No matter how much money it spends on research or argues that exercise lowers obesity, the industry is playing a never-ending game of Whac-A-Mole. When it beats down critics in one place, they pop right back up in another.

Chicago has received millions of industry dollars for health and fitness programs in recent years, but that didn't stop the chairman of the city council's health committee from proposing a penny-per-ounce tax on sugary drinks in July. In Minneapolis, another past recipient of grants, the city's health department launched a "Rethink Your Drink" campaign this summer. San Francisco officials voted in June to require health warnings on sugary drink advertisements, months after the industry spent heavily to defeat a special tax.

William Dermody, vice president of policy at the American Beverage Association, said the industry opposes campaigns "not supported by science" and that "no single food or beverage uniquely causes obesity." Coke spokesman Dan Schafer said the industry "consistently opposes efforts that target one product or one category or that attack our products in sensational ways."

Yet when beverage companies try to defend soda "there's inherent skepticism because they're not an impartial actor," said Stephen Powers, a beverage-industry analyst at UBS.

Meanwhile, negative soda studies and pronouncements are piling up. In July the Food and Drug Administration proposed that nutrition labels list added sugar amounts and a recommended maximum daily sugar intake of 200 calories--40 fewer calories than a 20-ounce Coke. The American Heart Association, a partner in the Bexar County campaign, recommends that adults limit sugar-sweetened beverages to 36 ounces a week.

"There is a robust body of evidence linking high intakes of sugary drinks to obesity," said Rachel Johnson, a heart association spokeswoman and professor of nutrition at the University of Vermont. Exercise is important, but a person needs to walk about 1 mile to burn off 100 calories, she added.

San Antonio became a jump ball in this debate in 2010. That year the city removed sugary drinks from city employee vending machines as part of a broader health-and-wellness push. That year, the city also was awarded a $15.6 million federal grant to tackle obesity.

Two years later, the American Beverage Association, an industry umbrella group, announced a $5 million grant for a "wellness competition" between city employees in San Antonio and Chicago. The partnership "puts the spotlight on ways to do things collaboratively," Susan Neely, the beverage association president, said at the time.

Then in 2013, Coke announced $1.5 million in new grants "to get San Antonians moving" by bankrolling programs that included distributing bicycles to community centers and military-style exercise classes called Coca-Cola Troops for Fitness.

A government survey showed progress. It estimated San Antonio's adult obesity rate dropped to 29% from 35% between 2010 and 2012. It also found the percentage of residents who drank soda daily fell to 64% from 71%, suggesting the trends were linked.

Last year, Thomas Schlenker, then director of the San Antonio Metropolitan Health District, proposed the anti-soda campaign to drive still-high obesity even lower with a poster of a Rosie the Riveter look-alike that read: "Soda? No, thank you!"

Several council members opposed the effort, arguing the city should focus on fitness initiatives instead of telling people what to eat. "Once you start going down that road, there's an unlimited number of things you could regulate" including steak, said councilman Joe Krier in an interview.

Mr. Schlenker said the beverage industry also was given veto rights over campaign specifics in working committee meetings attended by a Coke official. Coke said its employee attended as an industry representative but didn't have veto rights. By January, the campaign was dead, and in July, Mr. Schlenker was fired.

He believes he was fired because of his tough stance on soft drinks. In a statement, City Manager Sheryl Sculley said the reason was "increasing dissatisfaction with his lack of leadership, continued disregard for direction and repeated instances of unprofessional conduct." City officials said the beverage industry didn't exert undue influence on the campaign.

County officials stepped in after hearing the campaign had died in San Antonio. "It's not a Big Brother thing telling [residents] you might drink more sugar than you think," said Bexar County Judge Nelson Wolff, head of the county's governing body.

Their campaign is backed by a coalition of about 20 organizations including the county's public hospital, the San Antonio Independent School District, South Texas Academy of Nutrition & Dietetics and American Diabetes Association.

The website www.sugar-packed.com warns of the dangers of sugary drinks and helps visitors calculate how much sugar they're consuming when they grab a soda, energy drink, sweet tea or orange fruit beverage. A video on the website shows a man sitting at a diner emptying one packet of sugar after another into his mouth while the woman next to him drinks a cola. "Why would you drink that much in added sugars?" it asks.

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(END) Dow Jones Newswires

September 03, 2015 05:44 ET (09:44 GMT)

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