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Acknowledging "We have just completed an extraordinarily polarized election," the Consumer Brands Association (CBA), the trade group representing food, beverage and other makers of consumer packaged goods (CPG), today sent a letter to its members analyzing what a Biden administration means for the CPG industry and the opportunities it presents.
Its 1,200 words long, so we cant do it justice here, but the original, signed by CBA CEO Geoff Freeman can be read here. Its major points:
"An incoming Biden administration, coupled with a smaller Democrat House majority and a likely Republican Senate (Georgia runoff in January), points to clear policy shifts in regulation and the federal response to COVID-19, but tremendous uncertainty on the legislative front.
"Conventional wisdom suggests that federal agencies will be more aggressive, and Congress will be gridlocked. Yet the picture is far more complex. While there will be new challenges, the CPG industry can also seize opportunities that will arise as Democrats attempt to advance their policy agenda, roll back Trump initiatives and seek opportunities for bipartisan cooperation on selecive issues."
Addressing the "current realities" that will continue to play a major role in shaping the near-term future of the CPG industry:
Political Polarization Deepens, Raising Expectations for Corporate America: Americans are losing confidence in Washingtons ability to solve the nations problems. In this environment, many Americans increasingly expect corporations—who have earned substantially greater trust throughout the COVID crisis—to drive social change through their culture, values and investments.
States Flexing Regulatory Muscle: Influential states, such as New York, Washington and California, have used their regulatory regimes to aggressively shape the behavior of industries operating beyond their borders. This activism, combined with a need for revenue given COVID-19s crushing blow to state budgets, paves the way for a host of new policies designed to change human behavior and extract money from business. Patchwork regulation is likely to increase and will have significant implications for our industry.
Powerful Consumers as Chief Regulators: Consumers are increasingly using their buying power and social activism to demand change from business, acting as de facto regulators. From on-pack labeling to digital disclosure, consumers expect transparency about what they buy and access to information on-demand. Consumers and non-governmental organizations are likely to become even more vocal, and industry even more responsive, in the years ahead.
Addressing "opportunities in the new environment," CBA notes, "While we must be vigilant and play defense wher necessary, our greatest opportunity is seizing areas wher we align with the new political reality. We see five substantial opportunities for the CPG industry:
Leverage Federal Actions to Protect Consumers: From Big Tech antitrust enforcement to ingredient disclosure, we expect the federal government to take a far more active role in promoting what it believes to be in the best interest of consumers. We have a strong point of view on the shape smart regulation should take—namely that consumers should be empowered to make informed decisions.
Advance Solutions on Packaging Sustainability: Concern over plastics and Americas failed recycling system is a bipartisan issue tailor-made for action in a divided Congress. The CPG industry embraces its responsibility and is dedicated to advancing solutions that work for consumers and the environment.
Contribute to COVID-19 Post-Mortem Analysis: The new administration is certain to assess what went wrong in our nations initial response. The COVID-19 post-mortem is likely to include risks and opportunities. For example, new workforce protections and restricting certain products or ingredients in the name of protecting public health are both likely to be encouraged by activists. On the other hand, a damning review of the federal governments failure to provide clear, consistent guidance to industry and consumers alike creates an opening for the industry to provide a thoughtful assessment of what essential industries of scale need from the federal government in order to provide for the American consumer.
Help Americans Get Back on their Feet: Many of the worst effects of COVID-19—increasing economic uncertainty, rising unemployment, growing socio-economic divide—may be ahead of us. In the months ahead, we will articulate the industrys vital role in driving Americas economic revival and position CPG as a champion of restaurants, hotels, live events and other service sectors that will determine the strength of our recovery.
Shape "Made in America" Policy: Skepticism over global trade agreements crosses party lines. As the largest segment of the manufacturing sector, consumer packaged goods must have a strong voice on policies that impact our ability to deliver the products Americans want at the time and price point they want them. We must assess our supply chains to determine the upsides and downsides of greater domestic sourcing and offer an informed perspective on reasonable changes that could advance consumer interests in the years ahead.
Finally, "While Washington will not change as dramatically as many polls predicted, substantial uncertainty remains. We look forward to meeting new challenges and capitalizing on new opportunities as a united industry."
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