The case against listening to customers

The case against listening to customers

Crumpled-up, discarded customer survey
Shutterstockalexskopje
Customers are full of opinions — not always well-informed ones. Do we need them to tell us our business?

Big Food is battling an army of public-relations demons. Avian flu. GMOs. High-fructose corn syrup. Gestation crates on hog farms. Battery cages for laying hens. Cameras in slaughterhouses. Contaminated food. The list goes on.

An ever-increasing roster of companies — such as Chipotle, Denny’s, Safeway, Subway, Trader Joe’s, Whole Foods, even McDonald’s — are doing what their customers want, which is acknowledging people care about these issues and creating or abiding by policies designed to make change for the better. But there’s a much longer list of Big Food companies that have instead doubled down, locking themselves in their bunkers and insisting on everything from keeping high-fructose corn syrup in their ingredient list to serving the cheapest, most inhumanely raised meat.

In doing so, they’re using the “best defense is a strong offense” strategy: Flat out telling customers they’re wrong and that they just don’t understand how food is produced, while hiding unpopular practices from public view or even trying to make it illegal to expose them.

It’s a losing battle. As far back as 2007, nine out of ten Americans said the phrase “conscious consumer” described them … in a report sponsored by the Food Marketing Institute (PDF), not exactly known as a progressive bastion. The newest FMI report (PDF) says that “when it comes to attributes beyond those that render personal benefits, shoppers prioritize animal welfare second only to employment practices.” Survey after survey after survey shows that consumers care a lot about where their food comes from and want to know more about how it got to their plates.

This is what customers want, and they are increasingly vocal about it. So why aren’t all Big Food companies getting on board? Let’s look at the case against listening to your customers. It’s a surprisingly solid one.

tankers full of high-fructose corn syrup
Flickr Rob Swatski
</p><p></p><p></p><p></p><p></p><p>Tanker cars of high-fructose corn syrup chug across the country. Switching to cane sugar would be a big infrastructure change.</p>

The cost of change

For starters, there are practical issues, mostly economic ones. For instance, if you’ve included high-fructose corn syrup in your soda recipe for the last 45 years, outsiders might think it’s simple to just say “switch to cane sugar.” But that represents a huge capital investment — we’re talking tens of millions — to change virtually every aspect of your current supply chain and production process to go from a liquid sweetener to a powdered one.

In order to get rid of gestation crates (solitary confinement stalls for pregnant sows that are too tiny for them to even turn around), pork producers have to reconfigure their entire physical plants. The pork industry asserts that it’s more efficient and “better for the animals” to have these breeding hogs in the factory stand frozen in place, facing their food supply 24/7 for the entire four months they are pregnant, instead of in small groups where they can move freely. While a two-and-a-half year study by Iowa State University refuted this and found that it’s economically more feasible in the long-term to eschew gestation crates, making the switch admittedly carries a very considerable estimated short-term cost: $3.3 billion, to be exact.

So, one could say it makes economic sense to spend millions on lobbyists and maintain the status quo in the face of differing consumer sentiment, as many processed food companies are doing to defeat GMO labeling. However, economics are not the sole driver of this corporate selective deafness: Human nature also plays a role. No one likes to be told what to do by “outsiders.”

Over and over in my 20-plus-year food industry career, I’ve heard from meat producers that those who call for humane treatment of food animals are actually trying to eliminate eating them altogether. This is not empty talk. Many industry people seem truly convinced that Americans are being actively misinformed — even tricked — by activists who are interested not in public health or improving animal welfare in food production, but in shutting meat producers down.

So think about it: If you believe a group is trying to eliminate your entire sector, you’re not going to jump at incorporating their feedback into your business practices. You’re going to fight back. That’s why Big Food spends kazillions on reframing things like high fructose corn syrup as “corn sugar” and gestation crates as “maternity pens,” or battling to keep the term “natural” as vague as possible.

The spending doesn’t stop there. Big Food keeps trying to hide, literally, how the sausage is made — lobbying hard for “Ag Gag” laws designed to hide how animals are raised and slaughtered or eggs are laid.

Tesla Model S
Tesla Motors
</p><p></p><p></p><p></p><p>If older car makers had started making fuel-efficient or electric cars sooner, would they be dealing with Tesla Motors today?</p>

What’s worth fighting for?

They can keep fighting, but the tide is turning in this country. The short-term cost of heeding the sea changes occurring at the consumer level is far cheaper than the long-term cost of ignoring them. You don’t want to be Detroit in the 1970’s, ignoring customer demand for fuel-efficiency while clinging to the status quo. We know how that turned out.

Look, I know from personal experience that making meaningful change in a big corporation is hard, and it doesn’t happen overnight. But you can’t ignore the rattling of pitchforks in the distance forever; eventually they’ll be at your gates.

That’s why it’s important to listen closely to your customers. Imagine if Detroit hadn’t doubled-down on gas guzzlers, paving the way for foreign manufacturers to take away market share forever and innovative electric-car companies to spring up elsewhere. Imagine if Taco Bell had offered more sustainable meat choices sooner than Chipotle. Or if a large supermarket chain like Safeway had gotten into featuring local produce and organic take-home salads ahead of Whole Foods. Would Tesla Motors, Chipotle and Whole Foods even exist?

I rest my case.