For related articles and
more information, please visit OCA's
Health Issues page.
For decades, packaged-food companies have been reducing fat and
calories in their products. More recently the industry undertook
a broad-based effort to eliminate trans fats, and even
high-fructose corn syrup. But today, big food is at a
crossroads.
The companies that introduced products such as Doritos, Miracle
Whip, Butterfinger and the venti caramel Frappuccino now
maintain that the future lies in the health and wellness
category. A wave of products expected to hit grocery stores in
the next year will raise the ante for shoppers' attention and
compete for their trust. What constitutes "healthy" will
ultimately be decided by consumers at the cash register.
Several efforts are springing forth from Chicago. Purchase,
N.Y.-based PepsiCo has established a global nutrition group in
the West Loop, headed by the company's chief scientific officer.
Among other initiatives, the company is testing a reduced-sodium
salt for eventual rollout in its savory snacks. Northfield-based
Kraft Foods Inc. is developing foods that "align with organic
principles" by having fewer ingredients.
Bentonville, Ark.-based Wal-Mart Stores Inc., the world's largest grocer, recently announced that, in addition to making its own products healthier, it will push other manufacturers to follow suit. Seattle-based Starbucks Coffee Co. also is jumping into the fray, with a raft of products for grocery stores. Starbucks has yet to unveil the lineup.
Some nutritionists caution that packaged-food reformulations
can be part of the problem if they lead consumers to think they
can consume more of the food because it's minimally processed or
contains reduced fat. "Reduced whatever doesn't always mean
lower calories," said Toby Smithson, a spokeswoman for the
American Dietetic Association.
Sometimes, she said, when fat is reduced, calories actually
increase because the fat has been replaced by sugar, pointing to
reduced-fat peanut butter.
Dr. Geeta Maker-Clark, a family physician with NorthShore
University HealthSystem, said most health claims at the grocery
store shift "the consumer away from the primary focus, which is
whether it's nutritious food to begin with" because often it is
not.
A lot of the confusion, she said, relates to advertising. "If
you've got messages coming at you from 50 different directions
about what's good for you, you'll probably listen," she said.
"You don't see nearly as much advertising for broccoli because
there's no industry around it, but if there was, we'd probably
see people making those choices."
One thing major food companies seem to agree on is the growth
potential in the health and wellness category. What that means
will be a matter of some debate for the foreseeable future.
Starbucks is plotting a massive foray into the packaged-food
business. In a recent interview with the Tribune, CEO Howard
Schultz said he eventually expects grocery sales to rival those
of the chain's U.S. cafes.
Two years ago, Starbucks removed trans fats, high-fructose corn
syrup, artificial flavors and dyes in most items in its bakery
case. It was also one of the first major chains to offer
egg-white sandwiches on whole-wheat muffins. Starbucks is also
credited in some circles with repopularizing oatmeal, a 2008
product launch that became its best-selling food item within two
weeks.
Schultz noted that Starbucks has about 3,000 licensed stores
inside groceries, which are likely to offer samples of Starbucks
grocery products.
"When you put all that forth into one strong platform, it's
quite compelling," he said. "And over time, people are going to
be quite surprised, almost stunned, by what we're about to do."
By 2020, PepsiCo expects to build a $30 billion health and
wellness portfolio, from about $10 billion today, based on its
Tropicana, Quaker and Gatorade businesses, the expansion of
smaller brands like Sabra, and the development of a
global dairy business.
Dr. Mehmood Khan, PepsiCo's chief scientific officer and CEO of
its global nutrition group, addressed consumers' qualms about
the food processing.
"What's very critical to understand is that processing food is
not bad as a general term," he said, comparing processing to
cooking. He added that minimal processing allows things like
orange juice and toasted oats to be shelf stable, albeit for a
finite period of time.
"People think of science as something counter to nature, and I
look at science as a tool to leverage the identity and the
goodness of nature," said Khan, a nutritionist and
endocrinologist. He pointed to Pepsi's multiyear effort to
develop lower-sodium salt. Christened "crystal salt," the
seasoning is in the final testing stages and is expected to be
used in some products by the end of this year.
Khan said his group also is working to develop products that
provide grains, dairy and fruits or vegetables in one convenient
package.
"People don't wake up and say, 'I want to have a grain or a
fruit,'" he said. The typical consumer will have some mixture of
the two, or something that also includes dairy. He noted that
Pepsi now has two technologies for manufacturing drinkable oat
products. "And it tastes great."
Phil Gorham, a
Morningstar analyst who covers PepsiCo, said the company's
health and wellness initiative is likely a more "real"
undertaking partly out of necessity. As soda's appeal continues
to wane (Pepsi sales by volume are now less than Diet Coke's)
the company must beef up its other businesses, he said.
Gorham, who also covers
Nestle, the world's largest packaged-food company, said it
has a broader portfolio than PepsiCo's, which leaves it less
exposed to shifts in consumer behavior.
Nestle makes such indulgent treats as Butterfinger candy bars
and Haagen-Dazs ice cream, and comfort food like Stouffer's
lasagna and DiGiorno pizzas, as well as diet-oriented products
like Skinny Cow and Lean Cuisine.
In a recent interview, Nestle CEO Paul Bulcke expressed concern
about the demonization of food in America.
"We are thinking increasingly in wrong dimensions where we see
food as bad, and in French they have an expression, 'le
poison c'est la dose,' and you would say, 'the poison is the
quantity,'" he said, simultaneously acknowledging that Nestle
has "a role to play" in responsible eating.
And while the formula for profitable health food has yet to be
discovered, Bulcke maintains that it can be done. Basically, he
said, the process is about making "food pleasurable with more
goodies and less baddies." And if that can be accomplished, he
said,
healthy eating will also be a profitable business.
Nestle rival Kraft is examining how it can make its products
simpler.
Rhonda Jordan, Kraft's president of health and wellness, said
the company is looking to deliver products that can serve as an
organic facsimile, or simpler products without the
Whole Foods price.
Jordan said that while natural and organic sectors have outpaced
the rest of the food industry in terms of sales growth, "the
jury is still out," on how big the segments will ultimately
become. At the moment, she said, "it's still a niche market."
Kraft's strategy is to develop products that are "founded on the
same principles but not quite all the way organic," she said.
Such products, she said, have a broader appeal, are more
cost-effective for the manufacturer and more affordable for the
consumer.
eyork@tribune.com