- The Consumer Brands Association, the largest trade association in the CPG industry, outlined three political realities that will continue to shape the industry under the new presidential administration: companies taking a larger role in driving social change, states independently enacting patchwork regulation and consumers demanding more transparency through on-pack labeling and digital disclosure.
- The trade group also anticipates that since there may be a divided government, there will likely be methodical changes on the regulatory front, while legislative action may move slower. CBA will be pushing for bipartisan legislative and regulatory action, including promoting a functioning recycling system.
- Food policy is shaped by the presidential administration. Under President Trump, trade wars and tariffs transformed into a looming concern for a variety of producers and manufacturers. The Obama administration implemented policy that pushed for healthier food choices.
After a polarizing election, CBA CEO Geoff Freeman wrote to its members that a Biden administration will lead to "clear policy shifts in regulation and the federal response to COVID-19, but tremendous uncertainty on the legislative front."
While there is uncertainty, the next four years may represent a period of more stability for the CPG industry. After years of mixed signals from the White House, new tariffs announced in tweets and trade agreements hanging in the balance, the food and beverage industry has raced to keep up with the pace of change experienced under Trump.
These rapid changes in policy also coincided with a general shift toward companies and consumers taking change into their own hands — a trend that accelerated as a result of the pandemic, and could change under Biden.
Sean McBride, a D.C. food and beverage industry veteran, wrote in a recent opinion piece the differentiating factor between the outgoing administration and the incoming one is viewpoint on responsibility for government to regulate corporate behavior. McBride said the Trump administration "believes in individual responsibility and the power of free markets to govern corporate behavior," whereas Biden has previously shown he thinks behavioral change will not occur "without heavy government intervention."
Despite the expectation of more measured oversight, consumers are still predicted to have power. This shift toward consumers driving the evolution of the food and beverage industry through their wallets is something CBA anticipates to continue going forward and paints this trend as an opportunity for the industry. The trade association said the Trump administration limited disclosure of some technologies and ingredients. Under Biden, the trade group hopes to bolster use of its SmartLabel and Facts Up Front platforms to increase the transparency consumers demand.
Additionally, the more independent operation of corporations has prompted an analysis of supply chains as companies battled tariffs and the pandemic, as well as import restrictions resulting from severed trade agreements. Under the new administration, Freeman wrote trade group members can apply these experiences as an opportunity to enhance domestic sourcing, create jobs for Americans and provide consumers with more insight into the products they purchase.
The independence that many of these companies learned under the Trump administration may become beneficial as they distance themselves from political ties over fears that connection to politicians in a bitterly divided country may adversely affect their bottom lines. This summer, Goya was boycotted after CEO Robert Unanue praised President Trump in a speech at the White House. Two months later, Oatly came under fire from activists and consumers threatened boycotts after the company sold a $200 million stake to funders including private equity firm Blackstone Growth, which is headed by a major Trump donor.
While there is unlikely to be a major shakeup in policy with a government that lacks a majority party with which to easily enact legislation, there will be plenty of small changes on the horizon, both on Capitol Hill and from a shifting culture where expectations for food and beverage companies are changing. While CBA painted a picture of an industry ready to rise to the challenge, it is likely that companies will be searching for some direction following the uncertainty that dominated the last four years, which was only amplified by the ongoing pandemic.