PACKAGING and PANDEMICS

Which type of bread would most consumers choose? Artisanal or packaged? The answer would depend on when we ask the question. The responses and reasons would differ dramatically 150 years, 50 years, 150 days or 50 days into the past. Investment analysts at Credit Suisse recently predicted a resurgence in packaged food sales during the current coronavirus pandemic. How can the history of the food industry explain this?

The rise of manufactured food

Numerous major food and beverage brands were founded during the late nineteenth century including Budweiser, Campbell’s, Coca-Cola, Coors, Heineken, Heinz, Hershey, Hormel, Nabisco, Nestlé, Pepsi-Cola, Pillsbury, Post, Quaker Oats, Smucker’s and Wrigley. If we extend the timeline a mere ten years, we can also include Kellogg’s and Kraft. The rise of the packaged food industry was certainly enabled by supply factors during the late stages of the Industrial Revolution such as access to capital, technological innovation, systems of mass production, distribution networks including railroads, and the development of promotional techniques. But why was there consumer demand?

The first reason was safety. A leading cause of early death circa 1850 was a collection of illnesses related to poor water or food. This will surprise many readers who take for granted the modern systems that deliver safe water and food on a huge scale. Back then, fresh food was often anything but fresh. Food handling, preservation, distribution and retailing were primitive in comparison to the practices and systems used today. Spoilage and contamination were frequent problems for raw meats, fruits and vegetables. Processed foods were not much better. They were often adulterated with inappropriate or harmful ingredients, prepared in facilities with questionable practices for the safety of the food and the workers, and packaged in opaque containers.

Nancy Koehn at Harvard Business School has demonstrated that the strategic position of the nascent Heinz brand was based on the idea of purity. Henry Heinz was successful because he was scrupulous about the quality of his products and processes. He used clear glass packaging that allowed consumers to inspect the product before purchase and he opened his factories for public tours. Heinz realized that a properly designed and managed facility could not only deliver inexpensive products, but also ensure low levels of contamination and spoilage. He specialized in recipes based on vinegar due to its preservative effects and created a line of condiments that improved the flavor of food, thereby reducing preparation complexity and improving outcomes for home cooks with limited time or expertise. As consumers realized that his products were reliable and tasty, they developed trust in the Heinz brand and sales increased exponentially.

The second reason was availability. Two centuries ago, the American economy was predominantly agrarian. As the Industrial Revolution unfolded, there was a pronounced surge in the demand for labor. Aspiring young workers left their farms and moved near factories. The opportunities were so plentiful and lucrative that huge numbers of workers also immigrated to the United States from other countries. The result was urbanization and the rapid growth of population centers such as Pittsburgh, which were geographically removed from the sources of food. Obtaining a sufficient quantity of nutritious and affordable food was suddenly a problem, both for individuals and for the larger society.

The market solution to the problems of safety and access was a vast system of food manufacturers and retailers. Only a move toward industrialized agriculture, production and distribution could satisfy the immense and growing demand at regional and national levels. Packaging offered a system for preservation, which also had important benefits for the supply chain by increasing shelf life and reducing damage during shipping.

During the twentieth century, Americans increasingly relied upon packaged foods. The traditional shelf-stable formats were expanded to include frozen foods and eventually chilled products, which had better flavor and texture profiles than canned foods. The value propositions were improved safety, longer storage, lower price and increased convenience of preparation.

Altruistic motives and beneficial effects

Henry Heinz was an ambitious capitalist, but he was also a pioneering idealist who envisioned an industry that could improve the quality of life for vast numbers of average people. There are numerous other examples of altruistic motives and beneficial effects throughout the history of packaged food and beverage.

For thousands of years, humans have consumed a variety of preserved foods including pickles and beer. The latter may seem like a discretionary product with negative social and nutritional side effects, but beer was an important element of European diets during the medieval period, when water was unsafe and caloric intake was often insufficient.

During the eighteenth century, Jacob Schweppes developed a method to manufacture artificially carbonated mineral water, which was recommended for a variety of medical conditions. He was followed by numerous entrepreneurs in the soft drink industry including John Pemberton, a pharmacist who developed a tonic to ease stomach ailments that was subsequently named Coca-Cola.

During the nineteenth century, Henri Nestlé was a pharmacist who developed an artificial baby formula to reduce mortality among infants who would not breast feed. John Kellogg was a physician operating an innovative but peculiar health clinic, when he and his brother developed new approaches for breakfast cereal and peanut butter.

Higher order problems

Over the past several decades, there has been growing resistance to packaged foods of any type. Some concerns are similar to those a century ago, but they manifest differently today. The notion of freshness now means recently harvested and unprocessed, rather than unadulterated or spoiled. The concept of nutrition has been enlarged to include medical and scientific research about longevity, fitness, diabetes, and brain health. Consumers have become more concerned about the harmful effects of artificial ingredients and additives. And as the restaurant industry expanded into upscale segments, consumers have become accustomed to more exotic flavors and more sophisticated preparation techniques.

Other concerns about packaged food have developed more recently. As people became more interested in environmental sustainability, they began to question the legitimacy of industrial farming methods and transportation systems that generated high carbon outputs. As the ideological view of younger consumers gradually turned from unbridled capitalism toward elements of socialism, they became increasingly skeptical of large corporations. As a new generation was inundated by media, Americans increasingly resisted the messaging of ubiquitous brands.

Meanwhile on the supply side, many food manufacturers were mishandling their legacy brands. In a relentless march toward operational efficiency and financial optimization, companies were reducing the size and quality of their products, while simultaneously decreasing expenditures on advertising and brand promotion. At a time when packaged foods were under attack from social critics and facing competition from progressive entrepreneurs awash in private equity funding, the major food manufacturers were undermining their own products. Worse yet, these historic companies had lost their sense of purpose. They had forgotten how and why their brands became successful in the first place. And they had surrendered the narrative to competitors and substitutes.

A century ago, the food system was energized by notions of progress and technology. Today the fashionable paradigm for food is regressive. A social movement signified by slogans such as ‘farm to fork’ or ‘eat local’ has increasingly convinced consumers to purchase or prepare food that has been minimally handled and processed at every phase of the value chain. This has been taken to the extreme by activists who promote the consumption of unpasteurized milk for its health benefits, despite the risk of bacterial infection and the resurgence of brucellosis.

It should be noted that concerns about environmental sustainability or the nutraceutical effects of food are higher order problems that can be indulged by an affluent society with low levels of disruption and uncertainty. This statement is not intended to trivialize any related concerns or alternatives, but rather to emphasize the idea that social movements occur within particular contexts of natural conditions and economic development. Could food be healthier and more sustainable without abandoning the benefits obtained from industrialization? Probably yes and that is a goal worth pursuing. But it is also worth remembering that basic problems must be solved before giving priority to secondary concerns, even if there are interactive effects. To paraphrase Abraham Maslow, nobody worries about health benefits decades hence if they are starving today.

Remembering our past

This brings us back to the question that started my article. Which type of bread would most consumers choose? Artisanal or packaged? 150 years ago, consumers did not have a choice. 50 years ago, many Americans were choosing the packaged bread due to its consistency, reliability, safety, availability and price. 150 days ago, regardless of their actual choice, many consumers would have stated a preference for artisanal bread that was handmade by local bakers using organic flour. 50 days ago, consumers were worried about finding any bread at all. And if they were given an alternative, they might choose the packaged bread because it has a longer shelf life, is minimally handled at the factory, and is protected by impermeable plastic packaging. What a difference a crisis makes.

The favorable outlook for packaged food given by the investment analysts at Credit Suisse derives solely from the current context of the coronavirus pandemic. Consumers are expected to purchase a greater proportion of their food at retailers versus restaurants, be more concerned about shelf life, be more attentive to contamination, and be more cautious about unknown providers. All of these factors favor processed and packaged food from manufacturers with trusted brands.

This historical explanation reveals an opportunity for the future. The current pandemic will subside and the world economy will probably return to its normal state before the outbreak. At that point, one of two things will happen in the food system. The first possibility is that consumers will continue to purchase manufactured foods with frequency and quantity that is permanently increased. The other possibility is that prior trends will resume and processed foods will continue to decline over the long term.

Food manufacturers can influence the outcome in their favor. Instead of accepting the prevailing narrative scripted by detractors that focuses on weaknesses, the packaged food industry should promote a counter narrative that focuses on strengths. These are unquestionably consistency, reliability, availability, and safety from contamination.

Such claims can be justified and promoted in three different ways. The first approach involves explaining and promoting the features and benefits of the product, with a focus on technological progress in processing and packaging. People are often fascinated when they actually see complex manufacturing facilities in operation. The second approach involves subtly exploiting the current pandemic by promoting the practical medical and epidemiological benefits of centralized manufacturing and impermeable packaging. The social and economic disruption caused by the coronavirus will be remembered long after it has abated, which means such messaging would likely have value over the long term.

The third approach involves crafting a narrative that connects existing events to a favorable historical context. The last time that Americans faced serious problems with the safety and availability of food was the nineteenth century. Henry Heinz and others solved that problem with manufactured food. Although the current situation is not as severe, consumers are nonetheless starting to worry about such issues. Once again, packaged foods are part of the solution.

Bruce Weindruch of the History Factory has suggested that the history of a company or industry can provide clues and inspiration for its positioning, product development and communications in the future. In other words, sometimes the best way forward is actually to look back.

The American food manufacturing industry has an authentic claim to providing unprecedented economic and health benefits for humanity. That story needs to be remembered and told.

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Bradford Hudson is Associate Professor of the Practice of Marketing in the Carroll School of Management at Boston College. He holds a Ph.D. in business history and specializes in brand heritage. He is a former strategy and marketing consultant to numerous multinational corporations including Cadbury Schweppes and Nestlé.

This article is re-published with permission from Brand Heritage Review.