CBA sees opportunities for CPG industry under Biden Administration, roll back of Trump initiatives
At the same time, corporate America – including the food and beverage industry – likely will face increased pressure to drive social change by consumers seeking a workaround for bipartisan disagreements, which likely also will spur states to take more independent actions, creating a patchwork of regulations that complicate industry compliance, predicts Geoff Freeman, president and CEO of Consumer Brands Association.
In a letter sent to CPG industry leaders Nov. 9, Freeman predicts that an incoming Biden administration paired with a divided Congress “suggests federal agencies will be more aggressive, and Congress will be gridlocked,” which “dampens hope for major bipartisan progress.” Failure to act at the national level on issues could spur states to introduce policies “designed to change human behavior and extract money from business,” resulting in patchwork regulations, he adds.
However, Freeman also strikes an optimistic note, saying “the CPG industry can also seize opportunities that will arise as Democrats attempt to advance their policy agenda, roll back Trump initiatives and seek opportunities for bipartisan cooperation on selective issues. “
CBD regulations needed
Among the areas where he sees the most potential for industry’s proactive influence is around consumer protections and bolstering public health, which he argues also is ripe for legislative fragmentation if industry sits on the sidelines.
“We have an opportunity to ensure government policy changes truly reflect consumers’ needs. We can start by identifying consumer protection policies that CPG manufacturers can support,” he said.
For example, industry would benefit from consistent nationwide regulation of the burgeoning cannabidiol market, which CBA describes as a “wild west marketplace with no clear guidelines on testing, dosage or product safety requirements.” Without these, CBA adds, leading consumer brands are forced to the sidelines while consumers buy products that they erroneously believe are federally regulated.
Rebooting international trade partnerships?
GlobalData consumer analyst Jim Toy echoes Freeman’s assessment that the Biden administration and incoming legislators will place greater emphasis on public health and consumer protections, which he too sees as an opportunity for industry – specifically the US meat sector.
He explains that the Biden administration’s expected stepped-up focus on curbing COVID-19 could help reboot the US’ international trade partnerships, which have suffered due to food contamination concerns.
“COVID-19 has garnered serious concern regarding food contamination, and, with forecasting almost impossible in the worst-hit states due to infection rate uncertainty, international meat processing manufacturers may be looking away from large manufacturers based in these areas – such as Tyson Foods,” he explains in a statement.
“Recovering markets such as China translate to big business for US meat manufacturers,” he adds, noting, “The global meat sector stood at $1.267 trillion in 2019, according to GlobalData, with Asia-Pacific holding the largest value share of 45.8%. US meat processors, such as Tyson, show long-term export potential, but plant closures and high on-sight infection rates this year have several damaged the global reputation of these firms.”
If the Biden administration installs and enforces “harsher regulations in food safety,” it would “play well with both Chinese and US consumers,” who often select meat products based in part on the trust-worthiness of the manufacturer, Toy adds.
Made in America
Freeman also predicts the new administration will reshape global trade agreements, and urges CPG players beyond the meat industry to proactively get involved to ensure supply chains are secure for the long-term future.
“As the largest segment of the manufacturing sector, consumer packaged goods must have a strong voice on policies that impact our ability to deliver the products Americans want at the time and price point they want,” Freeman says. “We must assess our supply chains to determine the upsides and downsides of greater domestic sourcing and offer an informed perspective on reasonable changes that could advance consumer interest in years ahead.”
Engaging at this level also could boost the CPG industry’s influence on America’s economic recovery – a point that Freeman says CBA will outline in further detail in coming months.
Ultimately, Freeman says that while a lot of uncertainty remains about America’s near future, the association in 2021 will strive to “firmly establish the CPG industry as a force for good.”
He explained: “We will reinvest resources in state government relations. And we will explore new ways to meet consumers where they’re going, including bolstering our disclosure platforms (SmartLabel and Facts Up Front) and our industry’s ability to understand and communicate the origin of products and ingredients.”
