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The Health and Politics of the Food and Beverage Industry

Posted by Cindy Frei

Jan 30, 2013 12:57:00 PM

Junk Food, Healthy choices, MarketResearch.com

You wouldn't know it from what you "read in the news" lately, but for the past several years the food and beverage industry has been making efforts to meet rising consumer demand for healthy food that fosters health and wellness.

Last September, the world's biggest fast food company, McDonald's, announced a plan to begin listing calorie counts for all menu items in its thousands of North American restaurants.  The move was in response to growing concerns from consumer advocates, public health officials and doctors about the on-going obesity epidemic in the United States.

The McDonald's announcement created a stir, including from New York City's Mayor Michael Bloomberg . For years, he has waged a personal and political 'war' on 'unhealthy' food and other products, including:

  • Tobacco.
  • Sugary drinks.
  • Trans-fats.
  • Restaurants and eateries serving large portions of food and drinks with high calorie counts.

Mayor Bloomberg, who had pushed through a ban on large-portion sales of sugary drinks at New York City eateries, issued a statement in the wake of the McDonald's announcement in Sept. 2012 that complimented McDonald's on its decision.

Of course, Mayor Bloomberg's various public health-related campaigns have ignited frenzied coverage in the press, creating a PR nightmare for McDonald's and other food and beverage companies. 

Missing from much of the coverage -- and from Mayor Bloomberg's sometimes pugilistic stance toward food producers  -- has been a thorough examination of a parallel trend that has for years been underway in the food and beverage industry: some parts of the sector had already begun responding to consumer demands for organic food and beverages that promote health and wellness. 

Market research studies show that some food and beverage manufacturers have made gains over the past decade in changing product lines to reflect increasing consumer demand for organic food and other healthier items.  Like Mayor Bloomberg, some consumer advocates argue that the industry's efforts are too slow and primarily focused on marketing rather than on massive overhauls to their product lines.

The food and beverage industry, it seems, is between a rock of rising media and political pressure and a hard place of struggling to turn their historic business strategies in a new direction quickly.  This week, Coca Cola came under fire by some media pundits and consumer advocates for its new ad campaign emphasizing healthy eating habits -- and saying that it is working to help end the obesity epidiemic.  The cola company's effort may appear to be ham-handed but also may indeed be a genuine sign of epic changes taking place at Coke.

For example, in 2010, Marion Nestle, the Paulette Goddard Professor of Nutrition, Food Studies, and Public Health at New York University described the 'bind' that some food manufacturers have found themselves in in recent years:  Attempting to meet the growing consumer demand for healthier products while also maintaining a business model dependent on sales of processed foods which are contributing to obesity and other unhealthy conditions.

A recent NPR report featured Nestle sharing the story of Derek Yach, a World Health Organization health expert who accepted a job at the food and beverage conglomorate, PepsiCo., maker of Frito-Lay and Doritos chips, Mountain Dew and of course Pepsi Cola sodas.  Yach wanted to work at PepsiCo to help its food technologists develop product lines that were lower in sugar, salt and trans-fats; the food technologists were enthusiastic and determined to succeed, Yach said.

But their efforts were met with resistance from executives at the company, who couldn't envision a successful transition from market share built on heavily-processed foods to a sustainable business model based on healthy fare.

Such tension at PepsiCo and other major food and beverage manufacturers has played out below the radar of public and media attention until recently. Nestle and other food industry experts say the manufacturers ' legitimate -- if somewhat slow  -- efforts to make products "less junky,' is now being accentuated by rising poltical pressure, from Mayor Bloomberg and from First Lady Michelle Obama's campaign pushing for healthier eating by kids and teenagers.

The press and politicians are casting the food industry as a rank villain but the facts paint a more nuanced portrait.

In Targeted Health and Wellness Foods and Beverages: The U.S. Market and Global Trends, a March 2012 report, features analysis showing that increasing numbers of food producers and retailers are focusing on health and wellness:

"The market for targeted health and wellness foods and beverages is a dynamic and promising one, driven largely by the growing recognition—among scientists, government, practitioners, and consumers alike—of the instrumental role diet plays in a wide range of health conditions," note the authors, analysts at PackagedFacts. 

Other key findings:

  • Nearly two-thirds of U.S. grocery shoppers have purchased a food or beverage in the past year for the purpose of addressing one or more of the 20-plus health and wellness concerns examined by Packaged Facts. Cholesterol management and digestive health are of particular concern.
  • Nearly half of shoppers in Packaged Facts’ survey say doctors are one of their key sources of information about nutrients in food, and about one-quarter cite other medical professionals.
  • One-quarter of shoppers say a recommendation by a health professional is an important factor when buying grocery products and consumer goods targeting a specific health concern. Therefore, marketing to healthcare practitioners can be a rewarding strategy, despite challenges.

The report focused on products sold in stores, rather than specialty distribution centers or food-service providers.  Indeed, in most major metropolitan cities in the U.S., the expanded footprint of outlets including Whole Foods has been an accelerating phenomenon for more than a decade. 

The political benefits, though, of advocating for more Americans to eat more healthful food is undoubtedly at play in much of the recent activity and coverage. Everyone loves a simple story, with clearly defined Winners and Losers, Good Guys and Bad Guys.  Yet, as the data bears out, consumers are increasingly coming to their own conclusions and making healthy choices anyway, aided in part by the food and beverage industry's thus far imperfect ability to adapt to customer needs.

 To learn more about the health and politics of the food and beverage industry, download our free eBook.

Senior Writer/Content Manager, Amy Alexander

 

 

 

 

 

 

Amy Alexander
Senior Writer/Content Manager

Topics: Food & Beverage, Market Research, Healthcare