Consequentialist Analysis of SunChips


Ethics is a part of every company.  Whether or not they actively think about the ethics of their decisions, each company’s decisions have societal and ethical implications.  However, SunChips is a company that prides itself on its ethical beliefs and tries to make decisions based on their ethical impact.  The company has strong values that they try to implement in every part of their business.  But, in 2010 SunChips acted in a way that did not take into account the ethical impact on society.  SunChips released a new 100% compostable bag, the first of its kinda, in 2010, which seemed to be a big step in sustainability and leading the way for ethically responsible behavior.  However, due to complaints about the bags, SunChips recalled the them.  While normally a very ethical company, SunChips seemed to make a decisions that was out of character.  In this paper I will provide and overview of the SunChips company and its behaviors, including the packaging incident, and provide an ethical analysis using the ideas of the ethical theory of consequentialism.

SunChips brand was launched by Frito-Lay in 1991.  SunChips is a multigrain chip that has been positioned as one of Frito-Lay’s healthier snack options.  When it was first launched, this snack become very popular and was big success for Frito-Lay.  In 2009, SunChips year ending sales was $307,534,115 (Borden).  Frito-Lay realized that the market for healthier snack options was growing and so was the interest in being environmentally friendly.  SunChips was the perfect brand to capitalize on these trends.  Although, maybe a little head of its time in 1991 when it was first launched, this chart below shows the results of a survey conducted in 2009 showing consumers’ increased interesting in being sustainable.

 

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According to this study, 82% of the 1,204 people surveyed responded that they are more concerned about the environment now that they were five years ago.  This put SunChips in a great position to keep expanding its sustainable platform as they continued to grow.

However, SunChips does not only focus on being environmental friendly.  Frito-Lay has three types of sustainability at the core of its business.  Frito-Lay is a branch of the larger company PepsiCo.  The CEO of PepsiCo, Indra Nooyi, implements the idea of performance with purpose and keeps it at the root of all of the branches of PepsiCo.  Performance with purpose has three main elements: talent sustainability, human sustainability, and environmental sustainability.  The SunChips brand abides by all three of these elements.

First, SunChips follows the ideas of talent sustainability that the company promotes.  For SunChips, talent sustainability means “…providing a safe and inclusive workplace globally and respecting, supporting and investing in the local communities where we operate” (PepsiCO.com).  Frito-Lay takes a lot of pride in its plants and its employees. For example in 2009 Frito-Lay won an award for being one of Dallas Business Journal’s “Best Places to Work” in Dallas-Fort Worth (FritoLay.com).  This award demonstrates Frito-Lay’s commitment toward treating their employees well, thus following the ideals of talent sustainability.

However, SunChips brand emphasizes it efforts in human sustainability and environmental sustainability to a greater extent.  SunChips has a big focus on human sustainability.  The PepsiCo defines human sustainability as, “… providing a wide range of foods and beverages, from treats to healthy eats” (PepsiCO.com).  The website further expands to state that their goal is to help “… people lead healthier lives.  We are focused on providing new offerings that meet consumer needs for both nutrition as well as convenience” (PepsiCo.com).  As one of Frito-Lay’s healthier snack options, there is no question that SunChips embraces human sustainability.  SunChips is providing a healthier snack, which people can purchase conveniently at most food distributors.  There are many health factors in SunChips that are not present in most snack foods.  For example, SunChips has 0 grams of trans fats, is made with Sunflower oil, has 30% less fat than regular potato chips, and provides 18 grams of whole grains (“Frito-Lay’s SunChips Brand and National Geographic Join Forces to Launch the ‘Green Effect’”).  SunChips also places a great amount of effort on environmental sustainability.  According to PepsiCo, this means, “…finding innovative ways to cut costs and minimize our impact on the environment through energy and water conservation as well as reduced use of packaging material” (PepsiCo.com).  Since, SunChips primarily focuses on these two types of sustainability, the company’s mission is to “create the perfect snack – good for me and the planet” (Oh).  Emphasizing SunChips dedication towards human and environmental sustainability.

In a talk in 2009, Thomas Oh, Chief Marketing Officer of SunChips, discussed three main environmental initiatives that SunChips had been focusing on.  The first of which is solar energy.  SunChips wanted to reduce its carbon footprint and decided to build solar powered SunChips plants.  In 2008 on Earth Day, SunChips unveiled its first solar powered plant in Modesto, California (“SunChips Marketing Campaign Brings Light to its Solar Energy Efforts”).  This plant is one of seven plants that manufactures SunChips. Because of this solar powered initiative, this plant is able to product 145,000 SunChip bags a day using solar power (Oh). However, for SunChips, one solar powered plant was not enough.  In 2011, SunChips transformed a second plant into a solar powered plant in Casa Grande, Arizona, which can produce about 700,000 SunChips bags using solar power to further reduce the companies carbon footprint and environmental impact (SunChips.com).

 

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Solar Panels in Modesto, California (source)

 

The second environmental initiative that Thomas Oh spoke about was what he called “humanizing green” (Oh).  This means that SunChips want to motivate people to act in a green way.  This has been implemented in multiple ways, but most notably, in 2008  SunChips partnered with National Geographic to develop a campaign called the “Green Effect”.  The green effect is “… a national initiative that encourages consumers to take their own small steps toward helping the planet” stating that “consumers can submit their ideas on how to maker their communities greener, for the chance to win one of five $20,000 grants that will help turn their green ideas into reality” (“Frito-Lay’s SunChips Brand and National Geographic Join Forces to Launch the ‘Green Effect’”).  SunChips is strong believer that every small step counts when trying to help the environment.

 

(Nationalgeographic.com)

The third environmental initiative that Thomas Oh discusses is SunChips efforts to make environmentally friendly packaging for their chips.  Specifically, SunChips had a goal of creating a bag that is 100% compostable.  This invention had never made by any other chips company. The idea behind compostable packaging is that all the materials used in making the packaging will be returned to the environment in the form of organic matter.  In 2009, their idea of creating a 100% compostable started to become a reality.  Chips bags are made up of three layers, an outer layer which contains the graphics, an inside layer that protect the integrity and freshness of the chips, and a middle layer that connects the outer and inner layer (“Frito-Lay’s SunChips Brand Changing the Future of Snack Food Packaging”).  In 2009, SunChips created and released a SunChips package that was 33.33% compostable, because SunChips was able to make outer layer out of 100% plant based materials.  After creating this technology, SunChips announced they would unveil a 100% compostable packaging by Earth Day of 2010 (Oh).  This new packaging is made from plant-based renewable material, polylactic acid (PLA), which allows it to decompose within 14 weeks in the proper composting environment (“Frito-Lay’s SunChips Brand Changing the Future of Snack Food Packaging”).  Because many people are not aware of how to properly compost or why it is important, SunChips planed to accompany their new packaging with a plan to educate consumers about composting.  Below is a advertisement that SunChips released showing the process of a bag of SunChips decomposing and returning to the ground.

 

 

According Thomas Oh, this advertisement only aired once. However after just one airing SunChips received 115,000,000 online impressions discussing SunChips new compostable initiative.  It seemed as though everyone was very impressed with SunChips efforts to help the environment.  SunChips new packaging address the growing awareness and interest in being environmentally friendly, and the new technology was enough to catch people attention.  A guaranteed success, right? Wrong.

Shortly after SunChips put the new 100% compostable packing in stores, customers began to complain. Because of the plant based materials, the bag was much louder that other chip bags.  One customer went as far as measuring the decibels of sound that was released from the new SunChips packaging in comparison to traditional bags.  They found that the SunChips packaging released about 95 decibels of sounds, compared to a regular chips bag that released about 77 (VanHemert).  In a press release by Frito-Lay discussing the environmental progress of the new packaging, Gannon Jones, vice president of market for Frito-Lay North America said, “True progress, however, will require not just corporate leadership, but the actions of millions of individuals” (Frito-Lay).  Unfortunately for Frito-Lay the actions of the millions of individuals did not align with the actions of the company.  Instead of embracing the new packaging because  of the environmental benefits, consumers took the the internet and complained about the noise.  Eighteen month after the packaging was put into stores, there was a Facebook group titled “Sorry But I Can’t Hear You Over This SunChips bag” that had accumulated more than 44,000 followers (Horovitz).  Even more unfortunate for Frito-Lay, consumers unhappiness with the noise level of the biodegradable packaging lead to a 11% decrease in sales in 52 weeks (Horovitz).  As a result, SunChips decided to recall most of the sustainable packaging that they had developed from the shelves, leaving the biodegradable packing on only one of the six flavors of SunChips until that were able to create a quieter package.  Eventually, they did create a less noisy package by adding a rubbery adhesive to the middle layer, but still only implemented it in one flavor in the 10.5 oz bags.  This recall of the packaging seemingly goes against SunChips ethics and mission to try to help the environment. They had the ability to make a positive impact on the environment and be a leader in sustainable packaging, however because of the backlash of the consumers, SunChips turned its back on their big advancement.

Overall, I believe most people would agree that SunChips operates in an ethical fashion. By using the ethical theory of consequentialism, it seems that majority of their business decisions would be ethical by this standard.  SunChips mainly focuses on sustainability, and many different types.  I believe sustainability fundamentally follows the theory of consequentialism.  Consequentialism is an ethical theory that uses the outcomes of actions to determine the moral rightness for that action. Sustainability by nature is about outcomes.  People hope that their actions will have outcomes that impact the world in a positive way so it can continue to flourish. Consequentialism argues that  “an act is morally right if and only if that act causes ‘the greatest happiness for the greatest number’” (mine 1). In the case of SunChips, many of their practices aim to do this.  By implementing talent sustainability, they are acting in was to make sure their employees are happy.  By implementing human sustainability, they are providing people with healthier and convenient food, which will make people happier because they can be healthier and not be hungry.  By implementing environmental sustainability, SunChips is taking care of the world that we live in, which in the long run can keep people healthier and make them happier to have a clean environment to live in.  However, the decision to recall the biodegradable packaging that SunChips developed creates an ethical issue.

Consequentialism focuses on the majority of people, instead of the happiness of only a few.  For example, “The ‘best’ ethical decision would be the one that yielded the greatest net benefits for society, and the ‘worst’ decision would be the one that yielded the greatest net harms for society” (CO p90).  In respect to the issue with the biodegradable packaging, SunChips decision to recall the packaging seems to go against this ethical idea.  While there were a large number of people who were vocal about their concerns with the new packaging, by looking at the impact to society, their concerns does not seem to compare to the impact of the greater society.  The bags had the ability to have a positive impact on the world by reducing waste.  Additionally, if compostable bags became a industry standard, the positive outcome would be even greater.  On the other hand, by removing the compostable packing from the industry SunChips is causing harm to society because they are voluntarily withholding a product and technology that is beneficial because some people find it unpleasant.

Also, another crucial element of consequentialism is that ethical rightness is not based on the actor, but solely on the consequences.  For example, SunChips act to recall their compostable packaging is not morally wrong because they went back on their commitment or they broke a promise, but “according to classic utilitarianism [an branch of consequentialism], what makes it morally wrong to break the promise is its effect on those other people rather than the fact that the agent promised in the past” (mine 2).  It is not unethical for SunChips to promise the new packaging and then take it back, it is the consequence on society of taking them back that is unethical.

Furthermore, consequentialism helps people think more broadly about the implications of their decisions. It is true that, “… almost every large-scale policy choice will result in costs to some and benefits to others” (Hiller 28).  However, since consequentialism focuses on what will cause the most happiness it aids in making these choices easier.  “One helpful feature of the consequentialist approach to value is that it asks us to abstract away from our own personal attachments and consider what would be good more generally.  This is useful as a way of counteracting the human tendency toward moral nearsightedness” (Hiller 28). In the case of SunChips, they did not act in an abstract way, but instead in their own nearsightedness and self-interest.  The SunChips brand knew that their product was improving the environmental impact of society, however they were more focused on their profits and the bad press that SunChips was receiving.

However, in majority of situation SunChips does act in an ethically right way according to consequentialism.  In consequentialism “… the ultimate aim is to make the world a better place, and the consequentialist can start by asking the large-scale question of which policies would do that, on the whole, over the long term” (Hiller 28).  All of SunChips actions since when they were first launched in 1991 demonstrate this goal, with the exception of recalling their decomposable packaging.  They make policies that ensure worker happiness.  They provide an option for a healthier snack to people so they can stay happier and healthier in the long term.  And, SunChips is a company that tries to be innovative and think of new ways to create a positive long term effect on the environment.

 

Works Cited

Borden, Jeff. “SunChips Let the Sun In:  How Frito-Lay Embraced Green and Grounded its Brand Identity”.  BestinClass. Profit, 30 Sept. 2009. Web. 25 Nov. 2014.

“Consequentialism.” Stanford Encyclopedia of Philosophy/Spring 2009 Edition. N.p., 20 May 2003. Web. 25 Nov. 2014.

“Consumers Attitudes Towards Natural and Organic Food and Beverage – US – March 2010.” Mintel. N.p., 2010. Web. 25 Nov. 2014. <http://academic.mintel.com/display/520904/&gt;.

“Frito-Lay’s SunChips Brand and National Geographic Join Forces to Launch the ‘Green Effect’.” PR Newswire: n/a. Apr 21, 2009 2009. Print.

“Frito-Lay’s SunChips Brand Changing the Future of Snack Food Packaging.” Business Wire: n/a. Apr 16, 2009 2009. Print.

Horovitz, Bruce. “SunChips Sends its Bag to Dump.” USA TODAY: B.3. Oct 5, 2010 2010. Print.

Hiller, Avram, Ramona Ilea, and Leonard Kahn. Consequentialism and Environmental Ethics, Taylor and Francis, 2014. Print

Oh, Thomas.  “SunChip’s Sustainable Brand Journey: Thinking Outside (And About) the Bag!”. TOP SB TALKS 2008-2013.  Sustainable Brands.  02 June 2009. Web. <http://www.sustainablebrands.com/digital_learning/event-video/sunchips-  sustainablebrand-journey-thinking-outside-and-about-bag>.

“SunChips Introduces the World’s First 100% Compostable Chip Bag.” Canada NewsWire: n/a. Feb 3, 2010 2010. Print.

“SunChips Marketing Campaign Brings Light to its Solar Energy Efforts.” PR Newswire: n/a. Apr 3, 2008 2008. Print.

Treviño, Linda Klebe., and Katherine A. Nelson. “Chapter 4: Deciding What’s Right: A Prescriptive Approach.” Managing Business Ethics: Straight Talk about How to Do It Right. 3rd ed. New York: J. Wiley & Sons, 1995. N. pag. Print.

VanHemert, Kyle. “SunChips’ New 100% Compostable Bag Is Hilariously, Ear-Damagingly Loud.” Gizmodo. N.p., 19 Aug. 2010. Web. 26 Nov. 2014. <http://gizmodo.com/ 5616427/sunchips-new-100-compostable-bag-is-hilariously-ear-damagingly-loud>.

nationalgeographic.com

Fritolay.com

http://www.sunchips.com

pepsico.com

fritolay.com

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