Big Food Companies Move to Greenwash Their Junk Foods

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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Sometimes, she said, when fat is reduced, calories actually increase because the fat has been replaced by sugar, pointing to reduced-fat peanut butter.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