Where the dollars go: Lobbying a big business for large food and beverage CPGs

The top food and beverage companies are opening their pocketbooks in a big way to strengthen and maintain their influence in Washington, D.C., as they fight to protect their businesses with billions of dollars in revenue at stake.

A review of 30 food and beverage companies who spent the most on lobbying in 2020 showed they collectively doled out $38.2 million, roughly inline with their average during the past six years, according to data provided to Food Dive by the Center for Responsive Politics.

Coca-Cola has been the biggest spender when it comes to money targeted annually for lobbying since 2015, and last year was no exception. The world’s largest nonalcoholic beverage company spent $5.83 million last year on 24 lobbyists. While substantial, this is below its mean of $7.04 million during the past six years. 

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“Lobbying is sort of like insurance in that you just do it. Because as the old adage goes, if you’re not at the table, you might be on the menu.” 

Clare Brock

Assistant professor of American politics and public policy, Texas Woman’s University

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AB InBev spent the second largest amount in 2020 with $5.61 million on 53 lobbyists, compared to its recent average of $4.55 million. While AB InBev spent less money than Coca-Cola in 2020 and lobbied on the same number of topics, it addressed more specific issues within many categories such as taxes, the beverage industry and trade — a potential explanation as to why it used more than twice as many lobbyists.

Snack and beverage manufacturer PepsiCo was third at $3.69 million for 24 lobbyists, versus an average of $3.52 million in recent years. The next 10 companies have averaged between $1 million and $3 million on lobbying since 2015, the data showed.

“Lobbying is sort of like insurance in that you just do it. Because as the old adage goes, if you’re not at the table, you might be on the menu,” said Clare Brock, an assistant professor of American politics and public policy at Texas Woman’s University.

While average spending among the biggest companies was largely flat from 2015 to 2020, money targeted by the 10 biggest trade groups for lobbying has fallen precipitously during that same time. In 2015, $21.9 million went to lobbying before declining to just over $15 million in 2019 and 2020. 

Much of the decline was tied to a sharp decrease from the Consumer Brands Association, which represents CPG companies responsible for manufacturing a diverse mix of products including food and beverage offerings. It spent $2.3 million last year compared to $8.5 million in 2015, when it was known as the Grocery Manufacturers Association.

The trade group attributed the reduction to an adoption of a “pro-consumer agenda” and the decision to focus on issues that unite the industry — as opposed to GMA’s focus on food-specific topics — that allow for a more efficient use of its dollars behind CEO Geoff Freeman.

Every issue is in play

The food and beverage industry’s lobbying efforts encompass a wide swath of issues.

An analysis of topics lobbied on by the largest food and beverage companies found taxes and trade routinely rose to the top. In 2020, both of these issues ranked among the top two for seven of the top 10 companies, with the remaining three CPGs prioritizing at least one of them. Agriculture, transportation, the environment, federal budget/appropriations and labor/antitrust issues also have been priorities in recent years.   

“They lobby about anything that’s going to affect their business, no matter how remote,” said Marion Nestle, a former professor of nutrition, food studies and public health at New York University, who has researched lobbying in the soda industry. “I can’t think of a single area of food or nutrition policy that isn’t subjected to lobbying.”

Most of the food and beverage companies contacted by Food Dive, including Mondelēz International, Tyson Foods, PepsiCo and AB InBev, either declined to discuss their lobbying efforts or pointed to their industry trade group.  

Coca-Cola directed inquiries about its contributions to its website, where it notes that lobbying is a way for companies to ensure that their views get heard, or at least considered. “The list of things we focus on day-to-day is practically endless given the size and scope of our business,” Coca-Cola said.

Still, the world’s largest nonalcoholic beverage maker noted that much of its discussion with policymakers deals with environmental policy, health and wellness, and taxes — the latter being the issue the company has lobbied on most since at least 2015. Coca-Cola is mired in a multiyear tax dispute with the U.S. government over how it reports income from some overseas markets that potentially could cost the soda maker billions of dollars if it doesn’t prevail.

General Mills, the Minneapolis-based maker of Cheerios, Nature Valley bars and Progresso soup, said the company has “a long history of engagement in public policy” with regards to “core business concerns” like trade and taxes as well as sustainability, nutrition and food safety, among other issues.

Lee Anderson, vice president of government relations for General Mills, said in an email “that engagement in the public policymaking process protects our ability to make food the world loves.” He added that “it’s our job to bring the expertise of this company to those officials to help them make informed decisions.”

A spokesperson with General Mills pointed to the company’s support for the Food Safety Modernization Act and regenerative agriculture as issues where it is actively engaged with lawmakers.  

Lobbying behind the scenes

Critics argue that lobbying unfairly benefits large corporations whose deep pockets and connections get them special access to lawmakers, regulators and other influential officials.

The connections create invaluable relationships and make it more likely that companies can mount a defense to quash potential legislation. For example, they could argue that a proposed bill would lead to job losses in a congressional district or a tax increase might force a business to move.

“Anybody that has opposite viewpoints or different viewpoints doesn’t have the same kind of access,” Nestle said. “There’s plenty of evidence that companies have dozens and dozens and dozens of lobbyists and they visit every congressional representative every year, maybe more than once, depending on what’s being considered, and they’re really good at what they do.”

Critics have long argued that lobbyists frequently play a major role in influencing the outcomes of major polices being crafted by regulatory agencies or departments, or being considered through legislation by lawmakers on Capitol Hill — oftentimes behind the scenes.

A 2015 New York Times article combed emails obtained through open records to show how Monsanto and other companies recruited academic researchers to help promote their cases. Senate lawmakers at the time were preparing to take up industry-backed legislation that would ban states from adopting laws requiring the disclosure of food produced with genetically modified ingredients. 

The lobbying efforts put forth by many large food and beverge makers at the time ultimately fell short. A year later, President Barack Obama signed legislation requiring companies to notify consumers about detectable GMO ingredients in their products. The legislation also overruled any state laws regarding GMO labeling.

Another investigation by the Project On Government Oversight, a nonpartisan, independent watchdog that investigates and exposes waste, corruption and abuse of power, reported three years ago that a former snack food and corn syrup lobbyist picked by the Trump Administration to set food policy at the USDA was is in contact with her former employers on major and wide-ranging nutrition policies.

Emails obtained by POGO through a Freedom of Information Act request also showed lobbyists proposing names of potential members for a federal advisory committee on sodium, producing talking points for then-Agriculture Secretary Sonny Perdue and seeking intelligence on agency policy decisions.

Brock, who conducts research on food politics, said lobbying is even more important today with the polarization in Congress and a greater stronghold by leadership over the pathway forward for any potential legislation. The sheer volume of issues lobbyists need to focus on, coupled with these mounting political challenges, increases the amount of work they need to do to make sure their clients’ interests are represented.

“Lobbying is becoming more important, more expensive and more difficult because the political process is becoming slower and more contentious and gridlocked,” Brock said. 

Beyond the dollars and cents

Much of lobbying today is focused on top-of-mind issues. But arguably an equally important part of the process comes in keeping up with what’s happening in Congress or at a regulatory agency while at the same time maintaining and building relationships for when something does eventually happen. 

“You’re trying to get out in front of the regulation, and be seen as a company that cares about [an] issue,” Brock said. “There’s a lot of money at stake, and when regulation passes they’re gonna say, ‘Actually, we were at the forefront of passing this legislation. We advocated for this legislation. We wanted this.’ “

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“They lobby about anything that’s going to affect their business, no matter how remote. I can’t think of a single area of food or nutrition policy that isn’t subjected to lobbying.”

Marion Nestle

Former professor of nutrition, food studies and public health, New York University

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Those who follow food companies’ impact on the political process point out that their influence goes beyond the Open Secrets data. They argue the information provided by the nonprofit, while valuable, is just one small part of the broader picture.

Companies are regularly donating money to trade groups or nonprofits who work on their behalf. Their CEOs and top executives are making phone calls or holding meetings, and in some cases there are questions whether a particular get-together actually qualifies as lobbying. At the same time, lobbyists routinely transition from Congress, the Federal Trade Commission, the FDA or the USDA to work on behalf of a company or trade group — bringing with them their close connections and insight.

“There’s a lot more facets to how corporations influence politics than you can capture just through data like this,” said Max Moran, research director for the revolving door project at the Center for Economic and Policy Research, a Washington, D.C., think tank specializing in economic policy. “It’s a very good way of helping to shine a light on some things, but there are also vast parts of the of the system, which are sort of hidden from view.”

Companies continue to spend large sums of money each year because the net payout later on can be immense. 

Moran said lobbying helps businesses not only kill or respond to legislation, but it also could also save them billions of dollars if they are able to save a potential acquisition under antitrust scrutiny or thwart a threatened breakup of their business. The Center for Economic and Policy Research pointed to lobbying’s influence in allowing Bayer’s purchase of Monsanto, the approval of Amazon’s purchase of Whole Foods and getting antitrust precedents overturned in the 1980s to allow more meatpacking mergers.

“It is an enormous amount of money that’s being spent by firms of all types on lobbying — which is perverse in itself — but they spend that money because it works,” Moran said. “They get an incredible return on their investment for it.”

Mike Gruber, vice president of regulatory and government affairs at the CBA, agreed lobbying is expensive and time consuming, with much of his team’s hours spent discussing policy with state and congressional officials. The trade group also devotes significant amounts of time conversing with subject matter experts at many of its more than 70 member companies, which may disagree on an issue, or on which matters to prioritize.

“I do think [lobbying is] worth it. It’s important. It comes back to do you want smart policy?” Gruber said. “It doesn’t take much to have a worthy idea become a really bad policy.”

Alex Davidson, director of media relations at the Beer Institute, which represents the largest beer companies, said its lobbying efforts routinely focus on underscoring to lawmakers the impact the sector has on the U.S. economy and the effect of issues like taxes and aluminum tariffs on its members.

With 2 million people across multiple industries — from farmers who grow the ingredients to those who brew and transport the finished product — having ties to beer in some way, he said the trade group has a multiple ways it can point to the impact beer has in the U.S. economy. 

Lobbying in Congress played a big part in lowering federal excise taxes on beer four years ago, Davidson said, and now the Beer Institute is working vigorously to make sure the reduced levels remain in place. 

But even when topics impacting the industry aren’t at the forefront of the legislative agenda in Congress, the Beer Institute is spending time building and maintaining connections and educating legislators and their staff — a task made easier by the public’s affinity for the beverage and the fact that nearly every district has a brewery or jobs tied to the industry. 

“The first time you go to someone, you shouldn’t be asking for something. You need to make relationships and build relationships and cultivate relationships,” Davidson said. “A lot of our job is making sure that people understand the economic impact of [our industry] in the United States.”

Nestle, the former New York University professor, said lobbying has long been ingrained in the fabric of the United States since its founding when the practice was referenced by Alexander Hamilton, James Madison and John Jay in the Federalist Papers. Nearly 250 years later, Nestle said lobbying is a “normal course of doing business” and an effective one for large mult-national CPGs that is unlikely to abate anytime soon.

“Food companies are not social service agencies or public health agencies. They are businesses like any other business, and they operate exactly the same way businesses operate,” Nestle said. “They do everything they can to maximize sales and profits because they’ve got stockholders to please.”