stuffed: the role of the food industry in obesity prevention

Stuffed:The Role of the Food Industryin Obesity Prevention

Key Messages

• Food industry holds the keys to solving the obesity crisis

• Your work is commendable, but falling short • Things you can do

You represent the DefendersI am here to try to help you understand:

How the food industry thinks and makes their decisions

How you can motivate and drive them to doing what’s best for the public good

Obesity Playing FieldPerceived Roles

Perpetrators

Defenders

Victims

Government Advocates Researchers Health Care community

Consumers

Food & Beverage Cos. Restaurants

Obesity Playing FieldPrimary Motivations

Perpetrators

Defenders

Victims

Sales Market share Profit

Taste Health (for some)

The public health Advocacy

Obesity Playing FieldPolitical Skews

Perpetrators

Defenders

Victims

CPG – Republican/Independent Rests – Conservative Wing

Varied

Advocates/Researchers - Liberal/Democrat Public Health Community - Varied

Current Model

Industry• Consumer health per se is not the primary

driver Must make money to survive and flourish Not rewarded by their shareholders just for going healthier Quarterly earnings pressures push short term agendas

• Historically, industry resistant to change, especially restaurants

• Positions have been passive and not proactive “Offer healthy options” “Consumers responsible for themselves”

Current Model

Defenders• Skeptical of industry’s willingness to change– Perhaps jaded by industry resistance to proposed

changes

• Lack financial arrows in their quiver to educate the public

Current Model

Defenders• Skeptical of industry’s willingness to change– Perhaps jaded by industry resistance to proposed

changes

• Lack financial arrows in their quiver to educate the public

• Perceived as absolute/draconian – Good vs. bad foods– Bans– Taxation

The Defenders

Education Not enough $ to counter marketing budgets of large food

corporations Food Pyramid Guidelines difficult to interpret

Emphasis on ingredients not end products Serving sizes still misunderstood Confusing – worst, not best foods at top (apex)

On-package nutritional labeling required by NLEA has not stemmed tide of rising obesity

Programs pushing fruits & vegetables have not increased frequency and consumption in the last decade

So many well-intentioned initiatives, so few victories

The Defenders

School vending machine initiatives underway to replace/reduce high calorie beverages and snacks

Trans fats banned in select municipalities and California

Calorie counts on restaurant chain menu boards in New York City 80% of consumer experienced “sticker shock”

Recent Initiatives

Current ModelConsumers• Consumers challenged to change their behavior– Failed diets– Lack of exercise/movement– Stressed (time; mentally; physically)– Convenience Culture– Nutritionally confused– Most lack the discipline to say “No” (1)

• Only a minority plans/is structured enough to follow through• Not an issue of “Should” – they know they should eat better

(1) Source: Myers-Briggs Type Indicator

Don’t Expect to Solve the Problem

Results: America Still getting fatter

No state recorded an obesity rate of 20% or higher in 1990; today only 1 state (Colorado) boasts an obesity rate under 20%!

Southern tier in more dire straights Obesity rates in every state except Florida and Virginia @ 25% or more The only 3 states with obesity rates exceeding 30% are in the South

Jury still out on newer initiatives

Implications

Public health and regulatory initiatives are crucial….but alone will not get the job done

Epicenter of the Problem

WMCs

So How Do We Address This?

Solving the obesity crisis requires a whole new mindset

So How Do We Address This?

Industry must make $...RESPONSIBLY

Solving the obesity crisis requires a whole new mindset

So How Do We Address This?

Industry must make $...RESPONSIBLY

Defenders focus on guidelines not how-to’s; acknowledge corporations must make a profit

Solving the obesity crisis requires a whole new mindset

So How Do We Address This?

Industry must make $...RESPONSIBLY

Defenders focus on guidelines not how-to’s; acknowledge corporations must make a profit

Consumers passengers; let them eat “healthier” cake

Solving the obesity crisis requires a whole new mindset

So How Do We Address This?

Help the food industry profit from selling healthier food rather than penalizing them

They NEED to make a profit (NOT optional) They are the best marketers They have the most money They can deliver the products consumers will buy They have the organizational structure to execute

“If not out of altruism, then do it for greed”- Former NY Gov. Mario Cuomo

A Modest Approach

Defenders, with industry/associations, identify what the goals are Set overarching Guidelines With timelines or milestones Provisions for non-compliance

Food industry figures out how to solve the problem

Primary Goal

Focus on reducing calories across company portfoliosOther offenders like fat/sugars reduced by default

Calories

(Dietary) Energy Policy

Example Guideline: A company’s weighted # of calories per product across its portfolio must be (X) within 5 yearsComparable to Corporate Average Fuel Economy (CAFÉ)

standards (Average 35 mpg by 2020)

Why? Not enough automobile fuel (oil), too much dietary Why? Not enough automobile fuel (oil), too much dietary fuel (calories) fuel (calories)

Case Examples

Example #1 - School Vending

Alabama has established Guidelines: limit/remove soft drinks and high calorie beverages replace with low/no calorie beverages

Case Examples

Example #1 - School Vending

Program Status (Nationally)

Beverage calories shipped to schools down 58% Shift to waters, portion-controlled sports drinks and diet drinks

65% of vending machines changed over

79% of schools in compliance with national Guidelines

Case Examples

Example #1 - School Vending

Why This Works?

For Industry Keeps them in schools

Brand awareness & trial Source of high margin sales

Substitute beverage profits comparable to soft drinks

For Schools/Students Source of needed revenues Better for the kids

Case Examples

Example #1 - School Vending

Minneapolis District Test

# vendors increased from 4 to 16 13 bottled water and/or juice (high traffic areas) 2 sports drinks 1 soft drinks (limited hours)

Different pricing levels Bottled water $ 0.75 Juice/sports drinks $ 1.00 Soft drinks $ 1.25

Result: CSD sales down; total vending profits up $4K

Case Examples

Example #2 – Controlled Calorie Packs

Early evidence that 100 calorie packs are effective

Center for Human Nutrition at the University of Colorado-Denver:

“People ate 120 calories a day less when eating from 100-calorie packs than when they were given the

regular packages”

Case Examples

Example #2 – Controlled Calorie Packs

Suggest 100-Calorie packs become de rigueur in snack aisles and school vending machines

Win for manufacturers Higher gross margins per package Sustained visibility in schools

Win for schools/students Less calories per purchase Provides revenue stream to schools

Case Examples

Example #3a – Restaurant Initiatives

“Zero-sizing”

Beverages highly profitable → reason for supersizing

Price (32 oz.) $ 1.19Cost .36Gross Profit $ 0.83

Case Examples

Example #3a – Restaurant Initiatives

“Zero-sizing”

Calories not a factor regardless of drink size

Opportunity to retain economics of larger-sizes

Can This Be Implemented?

Key issue: Self-serve beverage dispensers prevalent in QSRs

Solution: New Dispenser Unit 100+ beverage options Promotional dollars for Zero-sizing Special code to only fill with Coke

Zero or other low calorie drinks

Case Examples

Example #3b – Restaurant Initiatives

Healthier Beverages for Kids

Issues:

1. Beverage options mostly high in calories Accentuated by “free refill” policies

2. Nutrition often lacking

Case Examples

Example #3b – Restaurant Initiatives

Healthier Beverages for Kids

Branded product as base + Flavor ingredient(s) + Fruit garnish = New Beverage

½ calories of equivalent beverages

Each contains a nutritional element e.g., Calcium; Vitamin C

Case Examples

Example #3b – Restaurant Initiatives

Benefits

Premium price yields higher profits for restaurant Company secures more occasions to sell its products Parents pleased about child consuming a healthier

beverage Kids happy about the taste + fun

Healthier Beverages for Kids

Case Examples

Example #3c – Restaurant Initiatives

Capping Combos

Combo meals a major source of excess calories

Value proposition that trades customer up to additional item purchase(s)

Drinks and fries are highly profitable

Case Examples

Example #3c – Restaurant Initiatives

Capping Combos

Opportunity to “cap” total calories in a Combo Meal

Example Guideline: Cap the calories at 750 Ensures bundled items don’t become “Weapons of Mass Consumption”

“Weapons of Mass Consumption”Example

Monster Thickburger® 1420 calsLarge Crispy Curls 480 cals Soft Drink (32 oz.) 388 cals

2288 cals

Case Examples

Example #3c – Restaurant Initiatives

Capping Combos

Example Little Thick Cheeseburger 470 cals Small Crispy Curls 260 cals Diet Dr. Pepper 0 cals

730 cals

Case Examples

Example #3c – Restaurant Initiatives

Capping Combos

Example Double Cheeseburger 440 cals Small Fries 230 cals Coca-Cola Zero 0 cals

670 cals

Will Industry Go For This?

Must show them that not trying to truncate their profitsJust want them to lower the calories for the public good

Must even the playing field – Guidelines must apply to all chains/large players

Don’t get caught up in the details

What Else Can You Do?

The Southern Block

Consider forging a Southern BlockSouthern Block to effect change All Top 10 Most Obese states are Southern Southern states > 35% of population Fast food and soft drink sales skew disproportionately to Southern states

As a block, can influence what is sold in restaurants, grocery and convenience stores

The Way to Win-Win

Set overarching Guidelines to lower obesity rate

Package up win-win ideas for business Show industry how they can still make $

Let the corporations figure it out how to implement

If they don’t do what they agree to do….

• From HarperCollins/Ecco• Available 1/27/09• Special Southern Obesity Summit rate (SOS@stuffednation.com)

For More Information on These Ideas

Stuffed: The Role of the Food Industry in Obesity Prevention

Thank You