2012-01-31

Co.Exist

Corporations That Don't Practice Social Responsibility Can't Hide Anymore

Kashi: so delicious, so healthy, so … owned by a huge multinational conglomerate? A new study has found that people aren’t fooled by sustainable sub-brands of giant corporations, and they’re doing more digging to find out where their products come from. Time for everyone to stop hiding and come clean.

A feel-good brand won’t gain much respect (or sales) from consumers these days if it’s owned by a not-so-feel-good corporate parent. That’s the message from a new survey showing that consumers are no longer easily fooled by complex corporate structures; they’re increasingly doing detective work to discover the real companies behind their products.

The survey, conducted by Weber Shandwick and KRC Research, spans four countries (China, Brazil, U.S., U.K.), 1,375 consumers, and 575 senior executives from major corporations. The survey found that 70% of respondents said that they stay away from a product if they don’t like the parent company, 67% check product labels to find the parent company, and 56% would think twice about buying a product if they couldn’t find information about the corporation behind it. In the U.S., one out of six consumers will stop buying a product altogether if they discover that they don’t like the parent company.

Consumers and executives all agreed on important communication points: how employees are treated, environmental responsibility, customer service, and good deeds are among some of the most discussed topics. But executives still don’t seem to understand that discordant messages between a brand and a corporation do plenty of harm.

Take, for example, Kashi, a generally beloved brand that likes to talk about how wholesome and "real" its cereals, crackers, and bars are. But Kashi suffers from a problem: It’s owned by Kellogg, which produces cereals that are anything but wholesome. As MoneyWatch points out, one of the ingredients in Kellogg’s FiberPlus Berry Yogurt Crunch--the preservative BHT--gets a thumbs-down from Kashi’s Ingredient Decoder tool. This is just a small example of the corporate cognitive dissonance that consumers--and shareholders--will no longer take.

Umair Haque sums it up well in his new book Betterness: Economics for Humans: "The bigger picture of twenty-first-century competition is richer, more nuanced and complex. Companies are beginning to be judged against a whole new set of criteria by customers, governments, communities, employees, and investors. They’re already saying, so you made a profit. Yawn. Did you actually have an impact? Did what you do have a positive, lasting consequence that was meaningful in human terms?" A responsible brand can no longer hide behind a company that doesn’t factor in this new set of criteria.

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6 Comments

  • Yul Dorotheo

    Tobacco companies, by virtue of the harm to society that they promote through their products, cannot do genuine corporate social responsibility. For them, it is nothing more than a publicity gimmick and a lobbying tool. 

  • Richard Lock

    It makes good business sense to be socially responsible. It is possible to create 'everybody wins' solutions,yet it can fall into the 'it seems too good to be true' trap. Companies that develop good socially responsible values and strategies will also benefit from a more engaged workforce, as well as more engaged customers - the business benefits of this are well established. Could it even become a virtuous circle?

  • kevinmoss

    Ariel, thanks for sharing the survey results and conclusions.  I agree companies need to come clean. But we should be supportive of companies that demonstrate positive action.   If consumers respond to healthy products by buying more of them, companies will have the additional drivers to shift their portfolios. A brand should be judged on the merit of the brand and the perceived intent of the parent company. If that intent is continual improvement we should support it as consumers.

    I would lean towards applauding Kellogg for being willing to support a tool marked with one of their brands that does not shirk from making transparent a downside in another of their brands.  If Kashi is inherently good we should buy more and support continued portfolio shift in a healthy direction.

    In the interests of full disclosure I should state that I am a CSR practitioner in a corporation as well as a consumer and a shareholder.

    www.csrperspective.com

  • JohnRichardBell

    This is particularly an issue when multi-nationals want to enter niche and or specialty categories by way of an acquisition - craft brewers are a good example. It would be far better for the parent to publicly state the mandate of the subsidiary and their quasi-independence. Closer to home, 20 years ago I was the CEO of one of Canada's largest coffee companies. It was bought by Kraft who closed the factory, termnated most of the employees and assigned the brand to corporate headquarters. Now they are selling and positioning the brand as if it were a free-standing coffee company. Obviously, no reference to Kraft. Need I say why?