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Advertising and Marketing to Children and School Sales


Advertising and Marketing Why It Matters

Approach

At PepsiCo, we believe children are a special kind of audience. When communicating about our products, we take particular care to support the role of parents or others responsible for guiding children’s diet and lifestyle choices. Our marketers follow PepsiCo’s Global Policy on Responsible Advertising and Marketing to Children, as well as any relevant industry pledge programs, laws, and regulations. We also restrict direct sales of certain products to schools.

In the event there are conflicts between our global policy, pledge programs, and/or any relevant laws and regulations, PepsiCo applies the strictest requirement.

PepsiCo’s Global Policy on Responsible Advertising and Marketing to Children

In 2021, the International Food and Beverage Alliance (IFBA) updated their Global Responsible Marketing Policy to include strengthened parameters for the definition of "marketing to children" and a new set of global Common Nutrition Criteria, that will limit what products can be marketed to children. Accordingly, as of January 1, 2022, our updated Global Policy on Responsible Advertising and Marketing to Children will provide that:

  • We do not advertise any products to children who are under the age of 6, regardless of nutritional content; and
  • We only advertise products to children under age 13 if they meet certain nutritional requirements (current policy applies to children under the age of 12).

This includes marketing on television programs when 35 percent of the audience is under the age of 13 (current policy applies to audiences comprised of more than 35 percent children). Media covered under the policy include TV, radio, print, cinema, online (including company-owned websites and social media), DVD, direct marketing, product placement, interactive games, outdoor marketing, mobile, and short message service marketing. When marketing our products, we also adhere to all relevant laws and regulations within the countries in which we operate.

While PepsiCo previously relied on its internally-developed Global Nutrition Criteria for Advertising to Children, we will now adopt the IFBA Common Nutrition Criteria when determining which products may be marketed to children ages 6-12. PepsiCo has begun to implement these new provisions and expects to be fully compliant by January 1, 2022, the effective date of the IFBA policy. Additionall, consistent with the International Council of Beverages Associations (ICBA) Marketing to Children Guidelines, within our beverage portfolio we will continue to only market plain water, fruit or vegetable juice, and dairy-based beverages to children.

This policy revision is the most recent example of continual enhancements we’ve made to our policy over the years to include additional restrictions, and adapt to a changing media environment and consumer expectations. We previously adopted certain marketing restrictions within school environments, and extended our policy to cover certain marketing communications primarily directed to children that use licensed characters (excluding company-owned, brand equity characters), celebrities (including influencers), and movie tie-ins.

Global, Regional, and National Pledge Programs

PepsiCo’s global policy is based on the principles of the IFBA Global Responsible Marketing Policy and the ICBA Marketing to Children Guidelines. These joint policies set a common standard for how the major global food and beverage manufacturers market their products to children around the world. In addition, we have signed on to industry-led voluntary pledge programs that engage industry within a given market, including those that operate at the national or regional level.

Local Pledge Programs may go beyond IFBA and ICBA commitments, and also often provide guidance for marketers on how the policies should be implemented within the local context.

Marketing to all consumers

In addition to our Global Policy on Responsible Advertising and Marketing to Children, our marketing practices and communications to all consumers are guided by the International Chamber of Commerce (ICC) Code of Advertising and Marketing Communication Practice (10th Revision 2018) and the ICC Framework for Responsible Food and Beverage Communications (2019). Together the ICC Code and Framework help ensure our marketing provides legal, honest, decent, and truthful information about our products. This includes:

  • Accurately representing our products and not misleading consumers about benefits of products;
  • Showing proper serving and portion sizes, as well as proper consumption; and
  • Taking special care when communicating with children so as to not create a sense of urgency, or inappropriate price minimization.
Sales of our Products to Schools

In 2006, in the United States, PepsiCo was proud to take a leadership role as the only company to sign voluntary agreements with the Alliance for a Healthier Generation – at the time, a joint initiative of the William J. Clinton Foundation and the American Heart Association to limit sales of both beverages and foods in K-12 schools. These agreements represented break-through steps to adopt a practical policy in the U.S. that provided a sensible solution for students, parents, and educators. The beverage agreement led to the removal of full calorie soft drinks in all K-12 schools and limiting offerings to juice and water in elementary schools and lower calorie and smaller portion options for older students. The foods agreement introduced nutrition standards (e.g. limits on sugar, salt, and fat) and limited portion sizes. These agreements also served as a precursor to the current “Smart Snacks” national nutrition standards for foods and beverages sold in schools established by the U.S. Department of Agriculture.

Outside of the U.S., PepsiCo’s global policy for beverage sales in schools focuses on providing water, juice, milk, and low-calorie beverages for students. It should be noted that because our policies alone cannot determine the actions of businesses outside our operational control, our products sometimes may be sold in schools by independent third parties. However, we view our policy as an opportunity to engage our industry peers and local authorities in adopting similar policies. It will ultimately take a collaborative, industry-wide effort to ensure consistently more nutritious options in schools.

Progress


Around the world, each division and region within PepsiCo has a process for reviewing and approving marketing campaign materials to, among other things, drive compliance with our global policy and pledge programs. While these processes may vary, they all typically require cross-functional review, consultation and approval prior to the release of any content. This review is aimed at ensuring our campaigns are in compliance with relevant laws and regulations, clear and truthful, not misleading, in line with our Values and Global Code of Conduct, and appropriately handle sensitive topics.

PepsiCo monitors and reports compliance with our global policy through many of our pledge programs around the globe. For example, consistently throughout the years, and including the most recent reporting period of 2019, we were compliant with our United States and Canada Advertising to Children Pledges, as verified by the Children’s Food & Beverage Advertising Initiative in the U.S. and by Advertising Standards in Canada.

In 2020, as part of the EU Pledge monitoring program, the European Advertising Standards Alliance evaluated companies' compliance with the EU Pledge commitments across digital media in Belgium, France, Germany, Greece, Italy, Romania, Spain, and Sweden. This evaluation found that 80 percent of company-owned websites were compliant, in addition to 100 percent of social media pages and brand-affiliated influencer profiles.

What's Next

As social media continues to evolve, we are striving to update the ways in which we market our products while maintaining our responsible marketing practices. We face new challenges in applying our policy to emerging application technology and the availability of audience data. We are engaging with partners and external organizations, such as advertising agencies, media vendors, and organizations like the World Federation of Advertisers (WFA), to understand the continuously evolving marketing landscape and adapt accordingly. We have also been rolling out training programs so marketers understand the implications of applying our policy to the digital space and discuss with them how new technologies might help us to adapt our policies going forward.

We remain committed to ensuring more nutritious options are provided in schools, and will continue to work with our third party operators and peer companies to advocate toward this goal.

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