Felipe Senisterra

The Silhouette

Don’t expect pop and chips to be served in Pepsi’s boardroom for much longer.

In recent weeks, more and more headlines have emerged regarding a dispute between Pepsico and many of its American workers over a $50 monthly charge on employees with certain lifestyle habits and health conditions.

Obesity has been the most highly-publicized in this issue due to its relation to the identity many attribute to the company’s products. Boasting a broad arsenal of soft drinks, chips and other snack foods that have delighted consumers, infuriated health experts and provided increasing dividends to shareholders, Pepsi has implemented marketing strategies that have built a strong brand identity for the company and increased its profitability over the past few years.

Increased criticism has been directed at brands like Pepsi for the health consequences provided by many of their products, the company’s image currently finds itself at odds with a human resources policy rolled out four years ago. The policy charges employees who have detrimental lifestyle habits, unless they attend classes and workshops providing suggestions on how to increase their physical well being.

Logically, such a strategy may make sense to Pepsi from a financial standpoint, as health issues can not only harm a company’s productivity but increase health benefit costs significantly as well. Similarly, from a human resources standpoint, the ability to afford health benefits for employees and provide them with opportunities to maximize their quality of life can help a company attract top talent.

What is less easy to understand, however, is why such a direct and explicit mandate was deemed feasible by the company, when the ensuing media backlash was highly predictable. In any case, the next few weeks will give us a better idea of how the brand is affected by the debacle.

However, to focus primarily on Pepsi’s possible inconsistency is to detract from an issue underlying in this scenario which is far more pressing: that of health compensation, and where a majority of society wishes to place a responsibility for its costs. A recent survey by Towers Watson and the National Business Group on Health indicated that the number of U.S. companies adding incentives or penalties to influence healthy lifestyles increased by 50 per cent from 2009 to 2011; the fact that even a company which depends on the sale of less-healthy items has also signed on for such a mandate further indicates an increasingly firm stance among corporations when it cialis canadian pharmacy comes to health costs.

What’s left to determine is where policymakers and society choose to place the responsibility for coverage of these expenditures, and it has already been an increasingly-heated debate in both Canada and the U.S. in the past few years. While the ongoing Pepsi dispute is currently focused primarily in the United States, and health policies in general are far different south of the border, we bear many more similarities with our American neighbors than we’d often like to admit, both in terms of increasing rates of obesity and increasing costs of health provisions – albeit, not always to the same degree.

Issues such as these will hopefully force corporations, governments, insurance companies and society as a whole to continue reflecting on where they stand on healthcare provisions; this will also depict how much responsibility they wish to attribute to each other for a healthy population and how much they’re willing and able to pay for it when it’s needed – simply ignoring the increasing costs will not make them go away. If not, at the very least, the Pepsi debate will make for an excellent case study for marketing and Human Resources students.

 


 

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