Why Kraft Decided to Ban
Some Food Ads to Children
To Head Off Critics, Company
Took Cue From Tobacco;
Growing Rates of Obesity
Clifford's Out, But Dora Stays
By SARAH ELLISON
Staff Reporter of THE WALL STREET JOURNAL
October 31, 2005; Page A1
Since J. L. Kraft started a cheese business in
1903, Kraft Foods Inc. has shaped an image as
family-oriented as the Oscar Mayer hot dogs
and Jell-O it sells. But last year, executives
at the Northfield, Ill.-based food giant
surveyed a troubling landscape. A major
government-commissioned study found
advertising contributes to childhood obesity.
Two bills in Congress proposed regulation of
Kraft, the nation's biggest food company,
which spends about $90 million advertising
directly to children every year, suddenly
risked being depicted as a corporate villain.
What happened next says a lot about how
quickly companies can be forced into dramatic
action when confronted with a challenge to
their reputation. In January, Kraft announced
it would quit advertising certain products to
kids under 12.
The move surprised the food industry and put
Kraft at odds with competitors. It presented
the risk of losing market share and millions
of dollars in sales. Yet the strategy seems to
be scoring points with policy makers.
Democratic Sen. Tom Harkin, of Iowa, has
praised Kraft's decision. Kraft was the only
food manufacturer on California Gov. Arnold
Schwarzenegger's recent "Honor Roll" for its
policies to combat obesity.
Critics say the policy gives Kraft too much
discretion in deciding what's healthy and what
isn't. They note the company still reaches
young children through cartoon characters on
its packaging. And in any case, the company
continues marketing all of its products to the
But Kraft is betting the strategy will work.
It learned it from its sister company, Philip
For years, Philip Morris, which, like Kraft,
is owned by Altria Group Inc., disputed a
growing body of evidence that showed a link
between tobacco and cancer. After the tobacco
industry agreed to pay more than $200 billion
in 1998 to settle lawsuits with 46 states,
Philip Morris broke ranks with other tobacco
firms to push for government regulation of the
Kraft executives, some of whom used to work
for Altria, are trying to avoid Philip
Morris's initial mistakes. Kraft is taking
control of the discussion about marketing to
children in a way that Philip Morris didn't do
with cigarettes for years.
"It's important to align with society and
engage our critics," Roger Deromedi, Kraft's
chief executive officer, said in an interview.
"And we have learned that from Altria."
Kraft felt inaction might invite a greater
threat. The government could impose
restrictions on children's advertising, not to
mention the risk of bad publicity or potential
lawsuits. "If the tobacco industry could go
back 20 or 30 years, reform their marketing,
disarm their critics, and sacrifice a couple
of hundred million in profits, knowing what
they know today, don't you think they'd take
that deal in a heartbeat?" asked Michael Mudd,
an architect of Kraft's obesity strategy and a
former executive vice president, in a
September speech at a conference at
Northeastern University School of Law in
Boston. "We have that deal in front of us
Still, coming to its current position was a
difficult process for Kraft. At a meeting in
May 2003, Betsy Holden, then co-chief
executive officer of Kraft presented 10
proposals the company could adopt to combat
obesity. Kraft agreed to all but one: to stop
marketing to children under 12.
"It was just too scary," says one executive
who was at the meeting. "We didn't want to
give up the power of marketing to kids."
But as concern over the role of food marketing
in childhood obesity gained steam, the company
Between the 1960s and the 1980s, the
percentage of overweight children in the U.S.
hovered around 6%, according to government
data. Since 1980, however, the rate of obesity
in children aged six to 11 has more than
doubled, and the rate in adolescents has
tripled to 16%.
In March 2004, Kraft executives met with the
company's newly-formed advisory council, a
group of paid outside nutritional and media
experts. One member of Kraft's council, Ellen
Wartella, dean of the College of
Communications at the University of Texas at
Austin, had complained several times to
executives that Kraft hadn't adequately
addressed the issue of marketing to kids.
At the meeting at Kraft's headquarters, a
company marketing executive showed the council
reels of ads for Chips Ahoy! cookies,
Lunchables and Kool-Aid drinks. The council
watched demonstrations of online games on
Kraft Web sites, where children could search
for Barney Rubble and his Fruity Pebbles, and
a counting game with Oreos. The executive
showed Kraft packaging featuring characters
such as Shrek and Dora the Explorer, a cartoon
character who stars in a show aimed at
After the presentation, Dr. Wartella told
Kraft executives the company's online
marketing was "indefensible." She said such
tactics got around a company policy, already
in place since the mid-1980s, banning
advertising on television, radio or in print
to children under six. Pointing to Kraft
packages and licensing deals, she said the
idea Kraft wasn't advertising to children
under six was "at best disingenuous and at
worst a downright lie," according to Dr.
Wartella and several people who were there.
Some executives were shaken by the comments,
and felt Dr. Wartella crossed a line. "I
thought they were going to throw me off the
council at one point," says Dr. Wartella, who
remains on the council.
In the spring of 2004, executives came up with
a compromise: Kraft would stop advertising
some products to children under 12, but still
market "healthier" food to kids between six
While the idea may seem unremarkable, it was
explosive within the industry. It violated one
of the long-held tenets of the food industry:
there are no "bad" foods.
Kraft doesn't use negative terms to describe
any of its products. But just admitting that
certain foods were "healthier" than others was
seen as revolutionary. To some, it was akin to
a move by tobacco firms years earlier, when
they finally agreed that "there is no such
thing as a safe cigarette."
Kraft has tried to shy away from discussions
about the causes of obesity and the legal
risks to food companies. "This is not about
complying with our legal obligations or
disputing the science," says Mark Berlind,
Kraft's executive vice president of corporate
and government affairs, and a former Altria
executive. "We're formulating our response
based on what our consumers are telling us,
and parents are most concerned about ads
directed at younger children."
The decision was important in another respect:
Kraft, not government regulators, would be in
control of defining which of its products were
"healthier." Still, "the commercial units were
very concerned," says Lance Friedmann, Kraft's
senior vice president of health and wellness.
"It was taking a big step."
Managers for cereal brands such as Fruity
Pebbles and Honeycomb were particularly
worried. Of all the businesses at Kraft,
cereal was the biggest advertiser to kids. And
unlike Kraft macaroni and cheese and other
products -- which are also advertised to
adults -- these cereals always advertised
directly to children, not parents.
By summer 2004, Mr. Deromedi, the CEO, sat
down with Kraft's advisory council and
discussed the proposed guidelines. Kraft wrote
its own standards, which the company says are
based on government recommendations.
But executives drew and redrew the lines on
how much sugar, fat and calories foods could
contain and still advertise on children's
media. This led to what several executives and
critics referred to as "nutritional
Even as the company was putting the final
touches on its advertising policy, it sent a
$25,000 check to join a lobbying group devoted
to defending the food industry's right to
advertise to children. "We need to keep a seat
at the table," says Mr. Berlind.
At the time it announced the new policy in
January, Kraft had been advertising dozens of
products on children's television shows,
including various kinds of Chips Ahoy! and
Oreo cookies, as well as Lunchables,
pre-packaged meals which come in 40 varieties.
By Kraft's own definition of what is healthy
enough to advertise directly to children, only
five of its products qualified.
Three of the products on that list were
drinks: Sugar-Free Kool-Aid, and two kinds of
Capri-Sun drinks. Only two food items met the
company's own criteria as being healthy enough
to advertise to kids: Lunchables Fun Pack
Chicken Dunks and 1/2 the Sugar Fruity Pebbles
Since then, Kraft has introduced other
products that meet its definition of what is
healthy enough to advertise to children,
including a reformulated version of macaroni
and cheese, with pasta that comes in shapes of
characters from SpongeBob Squarepants and
Under Kraft's new policy, any product
advertised on a TV show where more than 50% of
the audience is under 12 (as measured by
Nielsen Media Research) has to meet the
nutritional standards set by the company.
However, the company will still advertise on
TV shows that young children may see, as long
as more than 50% of the audience is over 12.
It will also continue to advertise in certain
magazines that kids read, and on Web sites.
The company still holds contests for children
as young as seven, such as the chance to be
one of "The Cheesiest Kids in America," and
get their picture on a box of macaroni and
Kraft's limits on advertising pitted the
company against competitors, who worry the
move is a tacit admission of a link between
food advertising and obesity. "I know the wave
of panic that went through the industry when
we first made our announcement," said Mr. Mudd
in his speech last month.
A major competitor, General Mills Inc., maker
of Trix, Lucky Charms and other cereals, this
summer began its largest-ever ad campaign to
children, touting the benefits of breakfast
cereal. "We've launched a vigorous defense of
cereal, and we're sticking to it," says Tom
Forsythe, a General Mills vice president.
Kraft's nutritional guidelines weighed the
impact on profits at its individual business
units. Most estimates of an initial impact
hovered at around $75 million in lost profits,
according to current and former Kraft
employees, though estimates changed several
The company has made exceptions to its own
guidelines. For instance, Kraft's Capri-Sun
Sport drink has more sugar and calories than
the standard that the company set for
"refreshment drinks." But Kraft still
advertises the product to children. That's
because Kraft says the drink has a "clinically
proven superior hydration benefit compared to
Kraft bases that benefit on a study it funded
of 29 children between the ages of nine and
12. The children exercised and on breaks were
allowed to take a drink. On average, the kids
drank more Capri-Sun Sport than water,
according to the study, done by the Medical
College of Georgia in Augusta. Kraft
determined its drink had a nutritional benefit
because kids drank more Capri-Sun than water.
Some say the claim is misleading. "It will
come in very handy when dehydration becomes a
public health menace," cracks David Ludwig,
director of the obesity program at Children's
Hospital in Boston. Kraft says the claim is
Kraft won't comment on whether the change in
its advertising has had any impact on sales.
But Kraft says its Chicken Dunks Lunchables,
which fit its new criteria, are its
fastest-growing product in that line.
And Kraft has maintained its ability to market
some products to children. The company
continues to use SpongeBob Squarepants and
Dora the Explorer on packages of Honeycomb
cereal and Teddy Grahams cookies, products it
no longer advertises on children's TV shows.
"We know that discussion around licensed
characters will continue and we think that's a
good thing," says Mr. Berlind. Kraft recently
declined to renew its license to use Clifford
the Big Red Dog on packaging
This article is copyrighted material, the use of
which has not been specifically authorized by the copyright owner. We
are making such material available in our efforts to advance
understanding of environmental, political, human rights, economic,
democracy, scientific, and social justice issues, etc. We believe this
constitutes a 'fair use' of any such copyrighted material as provided
for in section 107 of the US Copyright Law. In accordance with Title 17
U.S.C. Section 107, the material on this site is distributed without
profit to those who have expressed a prior interest in receiving the
included information for research and educational purposes. For more
information go to:
you wish to use copyrighted material from this site for purposes of your
own that go beyond fair use, you must obtain permission from the