TIME Consumers

5 Times Big Business Actually Bowed to Pressure from Consumers

McDonald's golden arches signs
Kristoffer Tripplaar—Alamy

Elephants at the circus are only the latest in a string of victories

Given the power enjoyed by American corporations, it might seem impossible that ordinary people can effect change other than via government force, a.k.a. legislation or the courts. But when sufficient organized pressure from consumers (otherwise known as citizens) is brought to bear, corporations can, and often do, change their ways. That’s especially true when, as in many of these cases, business isn’t great. Here are five recent examples of consumer pressure forcing big business to change its ways:


This week, McDonald’s announced that it would phase out the use of chickens raised with antibiotics that are used in human medicine—a practiced that has resulted in the rise of drug-resistant “super-bugs.” Meatpacking companies had already been cutting back on the use of the agents, but McDonald’s move is seen as a major step toward ending their use altogether. On Friday, Reuters reported that Costco is, according to Craig Wilson, vice president of food safety, “working towards” ending the sale of meat treated with such “shared use” antibiotics.


The Ringling Bros. and Barnum & Bailey Circus this week said it would stop using elephants in its shows. Animal-rights groups have complained for decades about what they have described as abuse. While the Feld family, which owns the circus, says Ringling Bros. isn’t reacting to critics, that seems like a bit of spin—if it weren’t for those critics, few people would realize how badly elephants are often handled by circuses, such as the use of “bull hooks” to tow them around. And without the critics, fewer laws would have been passed restricting the use of elephants—Los Angeles has prohibited the use of bull-hooks, for example. Such laws have made incorporating elephants into circuses cost-prohibitive.

Artificial ingredients

Nestle last month announced that it would remove artificial colors and flavors from Nestle Crunch and Butterfinger candy bars in the United States. This is a case not so much of pressure from organized groups, but pressure from consumer behavior. U.S. consumers are increasingly buying “natural” and organic products, and Nestle is simply responding to that demand trend. Nestle competitor Mars is also considering removing artificial food dyes from M&Ms. All these products will still be loaded with sugar and fat, but it will be all-“natural” sugar and fat (well, if you consider high fructose corn syrup to be “natural”—but see the next item).

High Fructose Corn Syrup

Despite the fact that there’s no solid indication that high fructose corn syrup is any worse for you than sugar (which is to say, not good for you at all), the substance is a favorite bugaboo of many food activists, some of whom go so far as to call it “poison.” And Big Food has responded, replacing HFCS with “real sugar” in many products. Sometimes, consumer pressure provides companies with new marketing opportunities, and doesn’t really solve any problems.


Genetically modified crops present a similar case of possibly misdirected pressure. The GMO issue is far more complicated than HFCS (with GMOs, there are real concerns about seed patents, and how much market power they accrue to corporations like Monsanto, further supporting our highly problematic industrial food system), but the anti-GMO movement, which is partly driven by the unproven assertion that GMOs present direct health risks, has similarly created marketing opportunities for big food companies. Unilever, Chipotle, General Mills, and scores of other companies have begun selling some products based on their being “GMO free.”


Western Companies Hope For a Bonanza in Iran

An Iranian worker assembles a Peugeot 206 at the state-run Iran-Khodro automobile manufacturing plant near Tehran, Iran, Oct. 11, 2014.
Ebrahim Noroozi—AP An Iranian worker assembles a Peugeot 206 at the state-run Iran-Khodro automobile manufacturing plant near Tehran, Iran, Oct. 11, 2014.

With only weeks to go until a November 24 deadline for a deal between Iran and the West over Tehran's nuclear program, Iranian and Western investors have their fingers crossed

If you just looked at the numbers, the deal revealed last week by the aerospace and defense giant Boeing seemed insignificant: $120,000, for some data, aircraft manuals and navigation charts. But symbolically, the sale to Iran Air, revealed on Oct. 22 was a big deal—the first time that an American aerospace company had done business with Iran since the U.S. began its sanctions there in 1979.

The Boeing sale, which was sanctioned by the U.S. Office of Foreign Assets Control under a temporary sanctions relief deal that began in January, is just one sign that Iran might soon be open for business with the West for the first time since the Islamic Revolution. As the clock ticks down towards November 24, the deadline for a deal between Iran and the West over Tehran’s nuclear program, both Iranian and Western business communities are hoping for a gold rush. Tehran throngs with Europeans jockeying for business, such as this winter’s planned visit to Iran of a hundred French executives, or the Italians, Chinese and Germans browsing the Tehran construction and mining trade show in August. Many international companies, from Samsung to Renault are already in Iran, trading in sectors permitted under the sanctions, such as food, cars and pharmaceuticals. In 2013, E.U. countries made 5.4 billion Euros ($6.8 billion) worth of exports to Iran. Emerging market experts make breathless comparisons to Russia just after the Berlin Wall’s fall. “Iran,” said Charles Robertson, global chief economist at Renaissance Capital, “is the biggest opportunity of the next 10 years.”

It’s easy to see why it could be. New markets of nearly 80 million people are rare indeed. Rarer still are emerging markets with oil and gas, educated work-forces and lively stock-markets — all humming with pent-up potential from Iran’s thirty-five years as an economic pariah. Iranian boosters reject comparisons with Vietnam and Burma, other newly open economies.”We like to think of it as Turkey on steroids,” quipped an Iranian investor at the Europe-Iran Forum, a recent London conference that brought together European investors and Iranian businessmen.

But challenges remain. If the Forum was designed to showcase Iran’s possibilities, it also underscored the hurdles in tapping them. Few business conferences ban “negotiation, deal-making, or commercial transactions,” but this one did, mindful of the Obama’s promise to “come down like a ton of bricks” on anyone breaking sanctions. The former foreign ministers of Britain and France delivered speeches — even as the British Foreign Office reiterated to Reuters that its policy remained “not to encourage trade with Iran.” Sir Martin Sorrell, CEO of the world’s largest marketing group, WPP, gave the keynote — though some pro-Israel groups had petitioned him not to, citing Iran’s human rights record, support for terrorism and anti-Semitism. On the first day of the Forum, there were protesters outside filming participants on their way into the venue.

Inside, European business people listened to presentations on sectors from oil to healthcare to consumer goods. But even the most bullish Iran-watchers admitted that a November 24th deal over the country’s nuclear program, should one be agreed, would just mark the first hurdle. One unintended effect of sanctions has been what’s amounted to a de facto boycott of Iran; companies are reluctant to do business with Iran even if it’s technically legal, in areas such as food or humanitarian aid. “The spirit of the law is even more burdensome than the letter of it,” said Esfandyar Batmanghelidj, a founding partner of the Europe-Iran Forum. “The effect on banks has undermined the idea that sanctions aren’t meant to hurt the Iranian people.” This June’s record $8.9 billion fine on BNP Paribas for breaking U.S. sanctions on Iran and other countries spooked banks anew, and Iranian investors realize that even if sanctions are lifted, Iran needs to rebuild its relationships with the international banking community. “Any number of good political outcomes may occur by November 24,” said Amir Ali Amiri of investment company ACL, “but even then, in the parallel universe of business, if European banks continue to lack confidence in putting together a letter of credit for Iran, they’re not going to touch the opportunity.”

Both within Iran and outside of it, there are vested interests who stand to lose if sanctions lift. China has benefitted from Iran’s sanctions, which delivered “the Iranian market to the Chinese on a silver platter,” notes Ali Fathollah-Nejad, a political science fellow at the German Orient Institute. Iran could rival Russia as a major supplier of oil and gas if it is allowed to export freely. Then there are the Revolutionary Guards, Iran’s ideological protectors of the Islamic Revolution, who have emerged as pivotal economic players. An open Iran would challenge their position, notes Fathollah-Nejad, “But the Supreme Leader Khamenei’s decision to go for a deal with the West signals that he’s been able to keep those guys at bay.” Not all commentators agree that Khamenei is certain to support a deal.

With around three weeks till the deadline, it’s not just oil and gas executives and sanctions-weary Iranians hoping for a deal. In a speech last week, the U.S. chief negotiator Wendy Sherman urged Iran to “finish the job,” while U.S. officials say President Obama may try and bypass a vote on suspending sanctions in Congress, where support for Israel is strongest, the New York Times recently reported. Congress, however, may not allow the President to bypass it.

“It’s the last large untapped market in the world,” says Ramin Rabii, of Iranian investment firm Turquoise Partners. “The future is very exciting.” The only question that remains — at least until November 24th — is whether all the hurdles can be overcome.

MONEY Shopping

If You’re Average, You’ll Spend $98 Today

Daily consumer spending averaged $98 in May, the highest it has been in six years -- an indication that the economy is heading in the right direction.

If you’re like most consumers, according to a recent Gallup poll, you reported spending an average of $98 in May. That’s $10 higher than April, and the highest monthly average seen since early 2008.

Historically, consumer spending in May tends to be higher than in most other months, as people pile up expenses related to the start of summer—yard work, spring cleaning, barbecues, etc. December is usually a close second, what with holiday parties and gift shopping. Sure enough, the most recent three-day average high for spending was measured over Memorial Day weekend (daily spending: $134), followed by a trio of days right before Christmas 2013 (daily spending: $129).

Since 2009, when consumer spending in May was measured at just $63, there’s been a consistent increase, rising to $90 in May 2013 before hitting $98 this year. In the big picture, the trend may be viewed as an indication of an economy on the upswing—especially when other data, including improving confidence among small and big businesses alike, are factored in.

Another interesting indicator is that the national birth rate, which has fallen over the course of five years and has been viewed as a sign of larger economic strife and uncertainty, appears to have hit bottom. Births were up slightly in 2013 compared to the year before, an indicator that people have been feeling (slightly) better about bringing a baby into the world lately, even with all of the costs and responsibilities of being a parent.

MONEY big business

CEO Pay Breaks $10 Million

The median pay package for chief executives at the nation's largest companies amounts to 257 times the average worker's salary.

Your browser is out of date. Please update your browser at http://update.microsoft.com