Mining the Fat of the Land

Hank Cardello, a food industry marketing pro had an epiphany after a serious illness that led him to write a new industry manifesto called "Stuffed: An Insider's Look at Who's (Really) Making America Fat," where he proposes the food industry has the tools to fix the country's poor nutritional habits. He outlines several intriguing solutions and has graciously agreed to share some of his thoughts with the Hot Pot. As he puts it, "not because it (the food industry) is to blame, but because others can't fix it." Me, I'm halfway through the book and looking forward to continuing the conversation with Hank. Keep reading, and please chime in.

   -Lynn A. Kuntz

Why the Food Industry Must Solve the Obesity Crisis

The food industry finds itself in a unique position to drive solutions to America's overweight and obesity crisis. The old model of "sell as much of anything we can" is giving way to "it's time to take better care of our customer's health." But is it up to the food industry to lead the charge on slimming down the American consumer?

Today, two-thirds of adult Americans are overweight or obese, conditions that could ultimately lead to diabetes, stroke and heart disease. And the prognosis is not much better for our children, whom some in the medical profession believe will not live as long as their parents. A recent study by the National Center for Education Statistics reinforced this dire conclusion by reporting that almost 1 in 5, or approximately 500,000, 4-year-olds is obese. While Rome burns, are there any real solutions to this scourge?

What has been overlooked is the basic fact that there is an overabundance of calories supplied by the food industry. Since the 1950s, the number of daily calories available per person has increased by 29% from 3,100 to 3,900 calories, a jump of 800 calories more per day. Recognizing that we as consumers are increasingly inactive physically, is it any wonder that our weight and physiques continue to top out?

The food industry can - and must - step up to solve this widespread dilemma, not because it is to blame, but because others can't fix it.

Certainly, it is not the policymakers. The government track record pertaining to initiatives designed to improve consumer health and nutrition has been woefully ineffective. Since nutritional labeling on packaged goods was introduced in the early 1990s, the rate of obesity has more than doubled from 14% to over 30% of the adult population. The same holds for the Food Pyramid Guidelines. Intended to help consumers better understand nutrition and daily serving sizes, this tool has only perpetuated consumer confusion regarding what to eat and how much. And recent proposals such as taxing candy and soft drinks in a recessionary climate merely serve to enrich state coffers while depriving those least able to afford it of their favorite products.

What about consumers? Shouldn't they be responsible for their health and well-being? Certainly. But history has shown that attempts to stick with diets and exercise regiments are futile. Our Culture of Convenience demands food that is quick to heat-and-eat. More importantly, we cannot depend on ourselves to say No! to great tasting food at a great price.

That leaves the food industry to carry the ball. But what motivation does industry have to take leadership in solving this massive health time bomb? I can think of several reasons:

1. Do it to take better care of your customers. A healthier customer will continue to buy your products longer than one who succumbs to obesity-related diabetes, stroke and heart disease. It is time to retire the "more is better" model of food supply.

2. Do it to stay ahead of excessive government regulation. Proposed taxes on "sin" foods are just the beginning. A concerted effort to improve product health profiles and lower calorie contents will go a long way to diffusing a potential tsunami of punitive food regulations.

3. Do it for competitive advantage. Most companies today are simply incrementalizing their products to be (slightly) better. Innovative healthier products are a true signal to try a new product and communicate that the brand is in tune with being socially responsible.

4. Do it to improve your profits. The old mindset that healthier products cost more and diminish profit margins is obsolete. Examples are emerging of better-for-you products that augment margins and better serve their customer's well being.

Clearly, food companies have the resources, know- how to develop tasty products for every palate, and understand consumer needs. However, this prowess has yet to be fully unleashed on America's high calorie consumption habits. It is not enough to simply squeeze out a few calories, fat grams or granules of salt. This sleepwalking approach only reflects a retrofitting of outdated product portfolios and patching them up to live another day. Most old icon brands were not designed for today's lifestyle and dietary needs. It is time to start from scratch.

Companies must approach food product design from the ground up to meet the NEW healthy criteria that the consumer is now demanding. The Millennial generation, the largest consumers of beverages, snacks and fast foods, are more acutely aware of the impact food has on their health. They also respect and support corporations that act in a socially conscious manner. By continuing to throw "your father's Oldsmobile" products at them, food companies are on a path to lose their most important customers of the future.

Next Month: "Designing Foods for Health, Profits and Competitive Advantage"

  -Hank Cardello

Hank Cardello is the CEO of 27ºNorth, an advisory firm that identifies profit and market opportunities tied to healthier eating, and the author of "Stuffed: An Insider's Look at Who's (Really) Making America Fat." He has served as an executive with Coca-Cola, General Mills and Cadbury-Schweppes, and today acts as Chairman of the Global Obesity Business Forum sponsored by the University of North Carolina at Chapel Hill.