As President Trump accepts a transition should begin for President-elect Biden to take office, just-food’s US columnist Victor Martino looks at what the new administration could mean for the country’s food sector.
Former Vice President and six-term US Senator Joe Biden will take the oath of office on 20 January 2021 and become the next President of the United States. You can take it to the bank.
With this inevitability in mind, what should consumer packaged food companies and the food industry as a whole expect from President Biden and his administration over the next four years?
First and foremost, President Biden will enter office under circumstances unprecedented in modern times. Covid-19 and the economic fallout to follow is going to consume the majority of the new administration’s focus, time and efforts in 2021 and probably 2022.
When it comes to the pandemic, the new president and his team must focus like a laser beam on multiple fronts – prevention measures, figuring out which vaccines to deploy and how to pay for and distribute them, devising an economic aid package and getting it through Congress and more – hitting the ground fast and furiously on 20 January. Covid-19 has hit record levels here in the US and it isn’t slowing down. There is no time to waste because the virus won’t wait.
In terms of food policy, there are three major areas I suggest the Biden administration will focus on over the next four years.
Climate change and sustainability
President Trump has pursued a policy that ignores the realities of global climate change, taking the US out of the Paris Agreement and, while not denying that climate change exists, he has chosen to downplay it, instead focusing on the politics of promoting fossil fuel exploration.
His successor will rejoin the Paris Agreement and put a major focus domestically on climate change, along with becoming one of the leaders globally.
This should not worry the industry. Climate change is real and affects us all. Key for the industry, though, is to be proactive with the new administration rather than reactive. Food industry leaders need to engage with the administration, make industry concerns clear when it comes to policies and be a part of the solution rather than an adversary. There will be differences between the industry and the administration but, in politics and policy as in life and business, neither side ever gets a full loaf. But participating in the baking process is always superior to reacting when the bread gets burned.
In July, Biden said if elected president he planned to introduce a US$2trn climate change strategy to be completed over the course of four years. The broad-reaching agenda focuses on diverse areas, including the food and agriculture sector. He has also said he plans to work towards net-zero total US greenhouse gas emissions by 2050. It’s the opinion of this correspondent that this initiative will be put on the backburner because of the immediate focus and spending needs – expect an at least $3trn aid package to be introduced in January – on the coronavirus pandemic and resulting economic fallout.
Sustainability hasn’t been on the radar for President Trump. In fact, many big packaged foods giants like Unilever, Danone and others have been more aggressive on this front than the president and his administration. Sustainability, though, will be on the Biden team’s agenda. President-elect Biden, as mainstream of a Democratic centrist as they come, is a known quantity to corporate America in general, though, so the industry should not worry about him doing anything its leaders think is too radical. In fact, sustainability matters to consumers, albeit the pandemic is putting most other concerns on the backburner.
The industry should, in my opinion, engage immediately with the Biden Administration on sustainability and work with it on sustainability. Biden’s Chief of Staff, Ron Klain, a centrist as well, is well-known to business and industry, and will welcome participation from company and industry leaders if approached in a spirit of cooperation. The Chief of Staff is the gatekeeper to the President. Developing a relationship with him will be key for packaged food companies and industry representatives.
Nutrition and health
Unlike the Trump Administration, Biden’s will place a much greater effort on consumer health and nutrition. Expect Vice President Kamala Harris to play a role in this initiative as well. This shouldn’t be a surprise to the food industry. Obesity and food-related diseases like diabetes and high blood pressure, for example, are at an all-time high in the US and elsewhere in the western world. In fact, scientists have found a correlation between obesity and Covid-19. Across the pond, UK Prime Minister Boris Johnson, a conservative who contracted Covid-19, has put increased policy emphasis on obesity, including regulation and legislation aimed at the food industry as a way to tackle the condition.
It’s hard to predict what particular policies President Biden will propose – and he must get any legislation through both houses of Congress – but we can look to possible changes like taxes on sugary drinks, more stringent food labelling and increased spending on nutrition education. Again, it is to the industry’s advantage to proactively get involved with the administration starting on day one in order to be part of the process rather than reacting to any new legislation. Obesity is a serious problem in the US and the industry needs to be part of its solution. Biden understands business and like all presidents he wants a good economy on his watch. The industry needs to advocate its interests in this regard while at the same time helping to solve this vexing condition.
Also look for Biden to introduce legislation, with support of Democrats in the House and Senate, to roll back restrictions President Trump has put on SNAP and WIC food assistance programmes, along with increasing the budget and reducing eligibility guidelines for these schemes. This is a net positive for the food industry because any food companies and retailers benefit economically from food stamps and WIC.
Global trade policy
President Trump has pursued an aggressive, retaliatory trade policy with the world when it comes to food and agriculture, comprising trade wars and protectionism. In the main, it hasn’t worked, although the policies pursued by the previous two presidents, a Democrat, Obama, and a Republican, Bush, had much to be desired as well.
Biden will take a radically different approach to trade when it comes to food and agricultural policy. He’s a globalist and will work to end the trade wars with China and our Atlantic allies. Since the packaged foods industry is a global one – many of the leading food companies doing business in the US are foreign-headquartered, for example – this will be a net positive for the industry.
The world is flat and there’s no going back to a non-global paradigm when it comes to the food industry, although one thing the pandemic has taught us is that we do need to increase food sovereignty in the US and, even more importantly, we need to shorten our supply chain in order to be better prepared for this and future pandemics.
Trade is an area in which global packaged food companies and the industry as a whole can perhaps play the biggest role and have the most impact regarding the new administration. Biden is for stability globally, as are global food companies and the industry. Taking a proactive approach on trade policy with the new president and his trade team can result in a favorable outcome for the industry. There must be negotiation and give and take. But a new era of global trade and stability offers a favorable rather than negative outcome for the food industry and agribusiness.
In a letter to food industry leaders last week, Geoff Freeman, president and chief executive officer of the Consumer Brands Association, said the election of Biden, a smaller Democratic majority in the House of Representatives and Senate control up for grabs (amid the upcoming run-off in Georgia) will likely mean there will be “clear policy shifts in regulation and the federal response to Covid-19, but tremendous uncertainty on the legislative front.”
Freeman further said in the letter, “While we must be vigilant and play defence when necessary, our greatest opportunity is seizing areas where we align with the new political reality,” adding he expects the Biden administration to take an active role in promoting what it believes to be in the best interests of consumers.
“We have an opportunity to use our expertise to ensure government policies truly reflect consumers’ needs,” Freeman wrote. “We can start by identifying consumer protection policies that consumer packaged goods manufacturers can support, such as advancing digital disclosure and regulating CBD, and encouraging the government to be a stronger partner when it comes to enforcing pro-consumer safeguards and statutes.”
This is a pretty good approach to take, keeping top-of-mind the importance of being proactive and willing to compromise. After all, as former New Jersey Governor and Trump ally Chris Christie said over the weekend in calling for the President to concede: “Elections do have consequences.”
Biden, who’s spent his entire adult life as a politician and in public office, will become the 46th President of the United States on in January. He will set a new agenda for the country, focusing first and foremost on the coronavirus pandemic and its economic consequences.
The food industry can help set its own agenda by working proactively with the new president and his administration. It can also play an important role in easing the pain the pandemic has brought because it is an essential and critical industry that’s vital to everything America stands for at home and globally.
just-food columnist Victor Martino is a California-based strategic marketing and business development consultant, analyst, entrepreneur and writer, specialising in the food and grocery industry. He is available for consultation at: firstname.lastname@example.org and https://twitter.com/VictorMartino01.