22/06/12

Lu Ann Williams, Head of Research, Innova Market Insights

There is a perfect storm brewing…an obesity crisis turning into a healthcare catastrophe, governments staring into a budget abyss and a gutsy, forward thinking politician talking about his next food target, large servings of sugary beverages. And on top of that, well produced documentaries are appearing on TV in the US and in Europe about obesity targeted at the food industry. I think we are at a point of no return. There have been constant sources of pressure from industry groups and people like Jamie Oliver and Michelle Obama, but this time it will be different.

I manage a team of analysts that spend every day looking at what is happening in the food industry. Health, wellness, nutrition, better-for-you, these are by far the most important topics we deal with, every day; the industry is focused on it. We have tracked over 600,000 new food & beverage product launches since 2008. Over 30% of new products launched since 2009 in Europe and the US have at least one health promoting positioning (I excluded things organic, natural, gluten free.) The sector is making big efforts to improve nutrition quality but getting little credit for it.
The food industry is the focus for blame but the fingers should be pointed at the others involved. Consumers are living in a state of denial. Sixty percent of US shoppers surveyed by Health Focus International in 2010 were overweight but only thirty-two percent claim to be overweight. Forty-three percent said it is possible to be overweight and healthy. The numbers in Europe are only slightly less worrying. The same survey found that 47% of European shoppers were overweight or obese. Yet only 5% say weight is a primary reason to eat healthier and only 29% claimed to be overweight. Why then do 94% claim to be trying to either maintain or lose weight?

And the governments? What about home-economics, health and physical education classes at school? These programs have been cut back in many schools and schools have also turned to vending machines to raise extra funds. Education or lack of it when it comes to food, is a big issue.

“Big Food” as the industry is now being called, is not entirely to blame for obesity. The food industry has done a lot already and is actively working on ways to improve the health profile of products while still creating products that consumers will eat. But in terms of our perfect storm, look what happened with trans fat. Michael Bloomberg brought this to public attention but the industry was prepared. One of my colleagues wrote an article in 1995 about “trans isomers” and we started tracking what was happening then. Suppliers had trans fat free oils ready and waiting in the wings and when the issue came to a head, the industry had solutions available. Bloomberg’s latest move is outlawing the sale of any soft drink over 16-ounces in a bid to help curb obesity. It follows a strong 2011 campaign to help tackle salt consumption in New York City. New York has long been a forerunner when it comes to public health implementation (e.g. smoking bans in public places), so expect other US regions and European states to follow.

The European food industry will argue that it is taking a proactive approach to encouraging healthier eating, through reformulation and fortification, but that innovation is being stifled by misguided regulation. The European Parliament’s rejection of “percentage less” claims earlier this year is fair enough, as noting the reduction in fat, sugar or salt (e.g. “20% less sugar”) compared to a previous formulation can be misleading. But the potential of making this claim was at least stimulating the food industry to make these formulation tweaks and seek out innovative solutions from ingredient suppliers. Without the potential of making such a claim, is there really an incentive for manufacturers to make the switch, apart from being good corporate citizens?

The mass omission of generic Article 13 claims on the European Commission’s “Union List” of health claims [just over 220 approved and more than 2,000 rejected] is another case in point. Consumer protection from misleading claims is the key aim, but by placing the same substantiation requirements behind nutritional ingredients as to pharmaceuticals, there was little hope of high approval anyway for non-vitamins. The pharma industry has far longer patent protection than the food industry and the danger of the strict enforcement of this regulation is again that there is no incentive for suppliers to innovate.
The finger of blame for the obesity epidemic has long been pointed at food industry. Recent programs such as Big Food and The Men Who Made Us Fat will hardly quell that perception. But governments and other policy makers have also failed and oversee a new generation that will soon have lower life expectancies than that of their parents for the first time ever, due to their lifestyle choices.

My message to the industry is that we have crossed the tipping point. Sugar will be a big part of the discussion. Maybe it’s time to get together and do a better job of explaining all the efforts that are being made to improve the nutrition quality of food, to innovate with new health promoting ingredients and do it better than was done during the pink slime crises – Jamie Oliver made it on TV more than a year before the topic erupted in the media. Obesity and sugar are hot media topics now so be prepared.