Originally published in Forbes Magazine on February 26, 2013.

For the restaurant industry, like most others, moral arguments have little or no place in financial decisions. As a result, despite a decade of activists railing against half-pound cheeseburgers, accordion-size racks of ribs, haystacks of fries, and supersized Big Gulps that fuel obesity, restaurants haven’t changed much. Menus tout highly caloric food and plenty of it because restaurant chains feel that’s how they’ll lure customers. But a new study I led shows that that’s no longer true, and restaurants will miss out on a huge growth opportunity if they don’t rethink their strategy.

A Hudson Institute study released earlier this month on the performance of 21 U.S. restaurant chains that collectively generate $102 billion in revenue found a pocket of prosperity in a shrinking industry coming from an unlikely place, lower-calorie meals. Our research, funded by the Robert Wood Johnson Foundation, found that although the total number of meals served fell 1.6% from 2006 to 2011, servings of lower-calorie items grew 2.5%, while the number of higher-calorie servings fell 4.2%. To put that in a bite-sized sentence, supersizing is out; health is in.

Chains that dished out a greater number of lower-calorie servings grew their same-store sales much faster from 2006 to 2011. Per-restaurant sales went down at chains whose servings of lower-calorie foods declined during that period. Another new study confirms our findings from the consumer end. The Centers for Disease Control and Prevention released a study this week that found that U.S. adults consumed 11.3% fewer calories in food from fast food restaurants in 2010 than in 2006. In other words, consumers want fewer calories on their plate, not more.

Both reports should convince the restaurant industry that bedazzling customers with calorie-laden fare no longer makes economic sense. It’s time for restaurateurs who have been timid about offering healthier fare or smaller portions to wake up to this fact.

In the past, menu changes have typically been forced from the outside, by local laws requiring that restaurants post calorie counts; embarrassing documentaries such as Supersize Me; activists who targeted partially hydrogenated frying oils (for French fries and other fried foods); trans fat bans in places like New York, Boston, and California. The restaurant industry’s typical reaction to such assaults has been to counterpunch. Consider its legal challenge to New York Mayor Michael Bloomberg’s Big Gulp ban.

But the Hudson study indicates that restaurants need to put down the gloves. Their top lines depend on it. Cutting calories in their menus is better for their business. Our research examined 21 of the nation’s largest restaurant chains, which together account for about half of the total sales of the top 100 chains. We looked at quick-service chains such as McDonald’s, Wendy’s, Burger King, Chick-Fil-A, and Taco Bell, as well as sit-down restaurants such as Applebee’s, Outback Steakhouse, IHOP, and Olive Garden.

The nine chains that increased their servings of lower-calorie items not only had a 5.5% increase in same-store sales, they also increased their customer traffic 10.9%. Sales at the 12 chains with declining numbers of servings of lower-calorie offerings fell 5.5%, and traffic shrank 14.7%

The findings weren’t a total surprise to us. A year ago Hudson conducted a similar study of 15 of the largest retail food and beverage companies, including Nestle, Kraft, General Mills, and Coca-Cola. Products they marketed with reduced calories, smaller portion sizes, or whole grains or other ingredients generally recognized as more wholesome accounted for more than 70% of their U.S. dollar sales growth from 2006 to 2011. And yet these offerings constituted less than 40% of the companies’ product sales.

Natural Marketing Institute research has shown that 66% of American adults are choosing smaller portions at mealtime to help maintain or manage their weight. Restaurants that emphasize their high-calorie offerings or offer only a few uninspired lower-calorie choices will turn away those people.

So what can chains with years of high calorie-menu habits do? Before they do anything else, they must realize that their business will be at risk if they don’t act. The Hudson and CDC studies should be regarded as a health warning to the economic vitality of the restaurant industry.

This doesn’t mean chains should eliminate their popular high-calorie dishes. That, of course, would chase away the considerable percentage of customers who still enjoy those profitable items. Instead, they need to begin shifting their food portfolios toward the lower-calorie offerings that a growing number of customers now demand. There are four ways to do this:

  • Offer popular high-calorie items in smaller portion sizes, and price them to generate a comparable margin. The Cheesecake Factory’s “Skinnylicious” menu is a good example of this.
  • Accelerate servings of lower-calorie beverages, like Diet Coke, that a growing number of consumers prefer and that provide the same profit margins as higher-calorie ones.
  • Adopt healthier cooking oils like omega-9 sunflower blends that still yield tasty fried foods.
  • Promote the lower-calorie items more prominently, but don’t make them look like diet fare. Subway has taken such a stealth-health approach with its combo meals, which offer, for example, a sandwich, Coke Zero, and baked Lays potato chips.

For the first time, restaurants have a compelling business reason to change their dietary ways. The industry has plenty of room for revenue and profit growth, but only if it plays a role in keeping its patrons’ waistlines in check. Rather than “Supersize Me,” the new restaurant mantra needs to be “Downsize Me.”

Originally published in The Wall Street Journal on February 7, 2013 by Julie Jargon.

People are placing fewer orders for french fries and sugary drinks at restaurants, giving a boost to establishments that sell more low-calorie items, according to a study scheduled for release Thursday.

An analysis of 21 fast-food and sit-down restaurant chains between 2006 and 2011 found that lower-calorie food and beverages fueled the chains’ growth. The study was funded by the Robert Wood Johnson Foundation and conducted by the Hudson Institute, a policy-research organization.

The study found that restaurants that increased lower-calorie servings experienced an average 5.5% increase in same-store sales. That compared with a 5.5% decrease among chains selling fewer lower-calorie servings.

“The bottom line is, if restaurants don’t get more aggressive behind these low-calorie products, they’re leaving sales on the table,” said Henry Cardello, director of the Hudson Institute’s Obesity Solutions Initiative and lead author of the report. “It’s a business imperative.”

The findings might make restaurant chains feel better about efforts around the U.S. to get them to post calorie information.

The Hudson study found that the number of lower-calorie food and beverage servings sold increased 2.5% to 18.7 billion, while the number of higher-calorie servings sold fell 4.2% to 31.2 billion. The analysis examined restaurant servings and traffic from market-research firm NPD Group Inc. and publicly available sales data from the restaurant chains.

Lower-calorie servings were defined as sandwiches and entrees containing 500 or fewer calories, beverages with 50 or fewer calories per eight ounces and side dishes, appetizers and desserts with 150 or fewer calories.

Federal regulations requiring operators of restaurants with 20 or more outlets to post calorie counts are expected to take effect early next year. Some chains, including McDonald’s Corp. and Panera Bread Co., already post calorie information on menu boards nationwide.

Several chains have created sections on their menus featuring smaller portions and low-calorie offerings, such as Fit Fare at Denny’s Corp. restaurants and Au Bon Portions at ABP Corp.’s Au Bon Pain chain.

Early studies on how posting calorie information affects consumer behavior have proved mixed. Some have found that providing calorie information has steered consumers toward healthier options, while others have found no noticeable shift.

After Panera posted calorie counts on its menu boards in 2010, the company noticed that 20% of customers began ordering lower-calorie items.

Chili’s Grill & Bar, a unit of Brinker International Inc., said sales of items containing less than 675 calories increased after it featured two new items on that Lighter Choices lineup on menu inserts in December.

McDonald’s declined to comment on the Hudson study, but when the company in September said it would begin posting calorie information nationwide, Jan Fields, then-president of McDonald’s USA, said the company hadn’t noticed a change in behavior in the cities that already required posted calorie counts.

Mr. Cardello, a former food-and-beverage industry executive, said he was surprised to find that fast-food chains sold a slightly higher percentage of lower-calorie food servings than sit-down restaurants did.

Margo Wootan, the director of nutrition policy at the Center for Science in the Public Interest, said the report was consistent with what she has seen in restaurants. “Americans are more interested than ever in healthy eating,” she said.

But she warned that consumers still aren’t as good about watching their calories when they dine out as when they eat at home, in part because large serving sizes at restaurants lead to overconsumption. Her nonprofit advocacy group wasn’t involved in the Hudson study.

Ms. Wootan said several studies have linked frequent restaurant visits with higher obesity rates. One showed that women who eat out more than five times a week consume about 290 more calories on average each day than women who eat out less often.

“My biggest concern is that oftentimes, there are only a few healthy options at restaurants amid a much larger array of unhealthy choices,” she said.

Originally published in The New York Times on February 6, 2013 by Stephanie Strom.

Driven by pressures like consumer demand and looming federal regulations that will require them to post calorie counts on menus, restaurant chains around the country are adding more nutritious choices and shrinking portion sizes.

The smaller portions, which are not necessarily cheaper, are the first step toward reversing the practice of piling more food on a plate than anyone needs in a single meal, a trend that began nearly three decades ago. Besides making a contribution to customers’ health, restaurant owners are finding that the move is paying off financially.

Sbarro for example, is offering a “skinny slice,” with a different mix of cheese and more vegetables at 270 calories. Longhorn Steakhouse has smaller portions of beef that qualify for its lower calorie Flavorful Under 500 menu.

“Menu labeling is part of it, but there’s also been a lot of finger-pointing at the industry by the media and others, including customers, that is spurring the movement,” said Anita Jones-Mueller, a registered dietitian who is president and founder of Healthy Dining Finder, a Web site that helps users find restaurants with healthy options using ZIP codes.

One gauge — the number of restaurants with vetted healthy options listed on the site — has increased more than 2,000 percent, and many have been added just in the last couple of years, Ms. Jones-Mueller said. “Customers really want these items, so restaurants are working to make them more appealing,” she said.

Hank Cardello, director of the obesity solutions initiative at the Hudson Institute, a public policy research organization, has been studying the impact that lower-calorie menu options have on restaurants’ business. “Lower-calorie menu items were driving restaurant growth over the last several years, no doubt about it,” Mr. Cardello said.

The results of his research were published Thursday in a report financed in part by the Robert Wood Johnson Foundation.

The Obama administration’s health care act, which was passed in 2010, included a provision requiring restaurants and food establishments with 20 or more locations to post the calorie counts of standard items on their menus. The final regulations are expected soon, with compliance likely to be required by 2014.

Some restaurant chains have already begun posting calorie counts.

After perusing Longhorn Steakhouse’s lower-calorie menu, Denise Garbinski, a registered dietitian in San Francisco, said the portion sizes were bigger than the four ounces she typically recommended, but that it was “a step in the right direction.”

“What they’re trying to do here is cut back on portion size, which is brilliant,” Ms. Garbinski said. “I always tell people to ask for a to-go container when they first order and then put half of the meal in it before they eat, but this takes that step out of the process.”

While the move by restaurants to more nutritional menu offerings is driven by external factors, many operators are finding that cutting calories, sodium, sugar and fat pays off.

“It’s doing great,” Brian Bailey, co-founder and chief executive of the Ichor Restaurant Group, said of the company’s new restaurant concept, Baja Pizzafish. “To serve fish tacos in Ohio is testament not only that the food tastes good, but that people really want it.”

The chain, which opened in July, offers the option of brown rice in its rice bowls, and three ounces of grilled salmon, steak or shrimp can be added. Mr. Bailey describes the dishes as, “smaller amounts of protein and more fresh vegetables.” Other menu items include thin-crust pizzas with potatoes and other lean toppings, salads and tortilla wraps.

The company also operates the Old Carolina Barbecue Company, a chain of six restaurants. It has added a new menu for its catering operation, the Lighter Side of Old Carolina, that features grilled chicken wraps, carved turkey sandwiches and chicken salad made with light mayonnaise.

“I don’t want to describe this as the anti-barbecue,” he said. “It’s more like I’m hedging my bets on comfort food.”

Matt Friedman, founder and chief executive of Wing Zone, said the company’s decision to add Skinny Dippers, fried chicken breast nuggets with no breading, to its menu in January was as much about business as about offering customers a healthier choice.

The price of chicken wings, the company’s bread and butter, has risen, Mr. Friedman said, so Skinny Dippers are more profitable for the chain. “From a business perspective, when the core product and its price have an impact on profitability, you diversify the menu,” he said.

The chain already offered grilled chicken sandwiches and salads with grilled chicken, but those are “somewhat mainstream,” Mr. Friedman said. “What distinguishes Skinny Dippers is that you can get them in any one of the 17 flavors our regular wings come in,” like Nuclear Habanero and Sweet Samurai.

Skinny Dippers are a limited time offer — or maybe not. “If this is a massive success, we’re going to keep it,” Mr. Friedman said.

Similarly, James Greco, chief executive of Sbarro, said that while the pizza chain had added the lower-calorie slice to capitalize on New Year’s dieting resolutions, the slice now outsells all other slice varieties but cheese and pepperoni. “Although our plan was to have it through March, we’re actually thinking about keeping it,” Mr. Greco said.

Mooyah, a build-a-burger chain based in Frisco, Tex., that dedicates itself to burgers, fries and 100 percent ice cream shakes, put lower-calorie options on its menu to attract a group of customers that Alexis Barnett Gillette, the marketing director, nicknamed “the veto vote.”

“What we found is if you limit yourself to the beef hamburger, there are certainly a growing number of folks who wouldn’t even consider our restaurants,” Ms. Barnett Gillette said. “It could be mom, who’s a vegetarian and may not want to go to a burger restaurant, or turkeytarians or someone with a health restriction of some sort.”

So Mooyah offers the choice of a 200-calorie turkey burger with fewer than 10 grams of fat on a choice of a white or whole wheat bun. It also has a black bean vegetable burger and sweet potato fries, a small portion of which is 255 calories, compared with 278 calories in the same size portion of regular French fries.

Still other restaurants are finding ways to highlight existing options on their menus that make a healthier meal, like Pita Pit’s Resolution Solution. The menu helps customers who build their pitas better understand how to create a healthy option, said Jack Riggs, chief executive of Pita Pit USA.

“When the public starts saying it wants healthier options — and we are hearing that — we have an obligation to help show you what that means in our restaurant and give you choices to help you achieve that,” Dr. Riggs said. “That’s good business.”

Originally published in Forbes Magazine on January 14, 2013.

Last month’s shooting of 26 elementary school children and adults at a Newtown, Connecticut, elementary school is beyond every parent and child’s worst nightmare. It has horrified the nation. As public outrage over mass shootings mounts, and as policymakers and gun-control activists rail for change, it’s time for gunmakers to do some soul-searching. If watching their products fall into the hands of dangerous people isn’t enough to move them, their profit motive should.

Here is why: Gun manufacturers that see their future narrowly as selling lethal weapons are leaving lots of money on the table for non-lethal personal protection devices. Further, by sticking to guns, firearms companies will risk facing legal battles of the type that have cost the tobacco industry hundreds of billions of dollars. A 2005 law largely shields gunmakers from those kinds of suits, but pension fund managers and other investors are nonetheless starting to act as if the tides have changed. If the legal floodgates open, the smaller and less profitable gun industry won’t be able to financially survive the attack that the tobacco companies withstood.

While I would prefer that a moral argument might persuade the gun industry to change its ways, especially after the murder of innocent children, unfortunately it comes down to profits and money. That’s the only way to get the gun industry, or many other industries, for that matter, to change products and practices that anti-industry activists claim are harmful to the public. Money, not Second Amendment rights, is the real reason that gun manufacturers fire back when anyone seeks to ban or limit sales of their products—even the extreme ones, such as armor-piercing bullets and the Bushmaster semi-automatic “sports rifle” used in the Newtown killings. Gunmakers cling to their guns because they believe their survival depends on preserving and enlarging the market for them. They think they’re all they have to sell.

From the 1929 St. Valentine’s Day Massacre to the 2012 Newtown massacre, history’s most notorious shootings have sparked outcries for more restrictions on gun sales and gun use. Despite the restrictive new policies that followed many such killings, from the 1934 National Firearms Act through 1994’s Brady Act, the gunmakers have prevailed by championing constitutional rights, courting and threatening legislators, and appealing to hunters, young men, and other core users.

However, those strategies may have run their course. It appears that public sentiment may be turning against unfettered gun ownership after 2012’s mass shootings. In a USA Today/Gallup Poll study taken after the Newtown massacre, 62% said they would favor a law to ban the sale and possession of high-capacity ammunition clips. In a separate Gallup Poll, 71% said they would support some restrictions on gun ownership; another 15% favored making guns illegal.

To be sure, the 2005 law enacted by Congress makes it difficult for firearm companies to be sued over the misuse of their products. But successful challenges to that law have already taken place. Last October, a New York appeals court unanimously held that a gunmaker, distributor, and dealer could be held liable for selling 181 “Saturday night specials” to a gun trafficking ring, which shot a Buffalo high school basketball star. And in light of Newtown, the cries for Congress to appeal the law have begun in earnest. As Vice President Joe Biden met last week with both sides in the gun debate, President Barack Obama vowed to enact new restrictions, with or without Congress. New York Governor Andrew Cuomo is pushing for a ban on assault weapons and allowing police to confiscate weapons from the mentally unstable; Connecticut Governor Dan Malloy is also calling for new restrictions.

As the anti-gun movement begins to hone its strategy, the blueprint is already in place for activists who want to pursue big legal settlements against gunmakers, using the same playbook that was successful against the tobacco industry. But unlike that industry, which staved off efforts to ban or curb smoking for decades before getting socked with a landmark $206 billion fine in 1998, U.S. gunmakers don’t have deep enough pockets to survive such challenges. Their industry profit margins are much smaller—8.5% on annual revenue of $11.7 billion, according to market researcher IBISWorld.

Consider that Altria alone, which owns Phillip-Morris, is a $23.8 billion business, twice the size of the entire gun industry, with net income margins that are two-thirds higher. Moreover, investors are defecting: The California State Teacher’s Retirement System announced last week that it would divest itself of holdings in gun companies that make weapons illegal in California. Harry Keiley, the fund’s investment committee chair, cited not only the Newtown tragedy but also “the financial pressures we anticipate this sector of the industry will face.” Cerberus Capital Management, one of the world’s largest private-equity firms, is selling its holdings in the Freedom Group, a top firearms company that makes the Bushmaster. Wall Street analysts, concerned over future liabilities, are likely to recommend that other investors follow Cerberus’ lead. After its investment missteps with Chrysler and GMAC (before the government bailout), Cerberus is surely capable of recognizing a big business risk.

Public sentiment and investors are turning against the gun industry, and anti-gun activists are howling for their heads. Still, gunmakers can appease the anti-gun activists, become a meaningful part of the solution to curb gun violence, gain new customers, and strengthen their bottom line—but only if their survival doesn’t depend on selling more guns and ammunition. That means they need to reload in three different ways.

First, they should redefine their business model from being purveyors of guns and ammunition to encompass all personal protection products. That would open them up to a host of new and existing nonlethal devices and markets that could very well generate much greater revenue and profit than the sale of guns and ammunition generates today. For example, the U.S. electronic security market is about the same size today as the gun market, according to figures from the Freedonia Group, and is expected to hit $17 billion by next year. Some reports estimate that the global market for home security will reach more than $34 billion in 2017.

Broadening the notion of the needs they fill has been a successful strategy in numerous other industries whose core products were under attack for safety, health, or environmental reasons. For example, Chevron, which once concentrated solely on fossil fuels, now focuses on natural gas, solar power, and biofuels, and touts its “human energy” platform. Danone jettisoned less healthy products to focus solely on nutritious ones such as bottled water and infant formula. Our research shows that Danone’s financial and shareholder performance has outpaced its peers’. Former soda companies such as Coca-Cola and Pepsi have redefined themselves as beverage companies, reaping new business from products like bottled water and sports drinks. Today they enjoy some of the highest operating profit margins in the food industry.

The second strategy that gunmakers should consider is appealing to new customers who don’t want to use deadly force to protect themselves. Overall, a minority of households packs heat; a late 2012 Pew Research Center poll showed that homes without guns outnumbered homes with guns by nearly two to one.

Both the University of Chicago and the Pew Research Center estimate that roughly two-thirds of American households don’t own guns. These people are a far richer vein of future income than the testosterone-filled young males who are the target of Bushmaster’s now-infamous “Consider your man card reissued” ads. Products that offer protection from intruders are highly profitable; ADT, the home security company, is a $3.2 billion business that delivers bottom-line returns exceeding 12%.

A 2011 study by Homeland Security Research projects that the market for non-lethal weapons, at $2.4 billion in 2012, will have a 17% compound annual growth rate, as demand rises in the leading-edge law enforcement and military markets. Consider that the Los Angeles County Sheriff’s Department has used nonlethal devices that combine mace and 600 lumens of light to temporarily stun a criminal, achieving a 96% “stop rate” and a 43% decrease in the necessary use of lethal force. ICD Research estimates that the global market for body armor and personal protection equipment will grow to $19.4 billion by 2022. Protective devices that use sound instead of bullets are an emerging opportunity. All in all, gun makers have a huge opportunity to make and market these devices to the majority of households that shun guns.

Finally, gun-makers need to demonstrate leadership in the public debate about the safety of their products, instead of merely playing defense. When Mothers Against Drunk Driving targeted the beer industry in the 1980s, beer companies started campaigns such as Anheuser-Busch’s “Know When to Say When.” They lightened up the alcohol in many beers and spent millions on public service announcements telling people to drink more responsibly. Even after losing market share to winemakers, brewers are more profitable today than ever; the four largest beer companies’ profit margins more than doubled from 1999 to 2011. Many food and beverage companies have joined the Childhood Food and Beverage Advertising Initiative, which promises more responsible marketing practices. Some members, including Coca-Cola Company, Mars, Cadbury and Hershey, have stopped advertising directly to children under 12.

Gunmakers need a new message and a new mouthpiece. The NRA now looks to be more on the fringe than ever: Wayne Lapierre’s statement that the Newtown mass murders occurred because of too few guns was greeted with revulsion. Clinging to the Second Amendment will no longer resonate with the majority of U.S. citizens. Most people who want to protect themselves and their families don’t care about getting their “man card” reissued.

In short, gun manufacturers need a broader focus, more nonlethal products, and new messages that demonstrate leadership and responsibility in the gun debate. The costs of relying on guns and ammo alone for profits are too high for society, gunmakers, and their shareholders. The societal toll alone is horrific. The U.S. averages 87 gun deaths each day as a function of gun violence, with an average of 183 injured daily, according to the University of Chicago Crime Lab and the Centers for Disease Control. The crime lab’s research estimates the annual cost of gun violence at $100 billion. Clearly, the gun industry’s single-minded focus comes at too high a price.

The needs of society and shareholders are too much for gun manufacturers to ignore. By focusing on and defending their rights to sell guns, they are only shooting themselves in the foot.

Originally published in Forbes Magazine on January 4, 2013.

Congress’s “fiscal cliff” deal on New Year’s Day included a nine-month extension of the expiring U.S. farm bill, preventing retail milk prices from doubling to $7 or more in 2013. That’s a great relief for milk producers, but the last-minute reprieve shouldn’t blind them to the fact that they have already fallen off their own cliff.

Demand for milk has been in a free fall for decades. U.S. milk consumption has dropped 36% since the 1970s. The dairy industry’s plight is a cautionary tale for other industries whose core product falls out of favor or is under attack by activists. It illustrates the dangers of focusing on just one highly commoditized product, ignoring market trends, and trying valiantly to sell what you make rather than to make what people want.

All the milk mustaches in advertising history can’t disguise the fact that milk is no longer the drink of choice—not for teens and 20-somethings, or people with busy lifestyles, or aging baby boomers, or the elderly. With per-capita U.S. milk consumption down 36% between 1970 and 2011, an industry trade group spokesman recently admitted something everybody already knew: The dairy business is in trouble.

Yet the industry has nobody to blame but itself. It’s in trouble because it has focused on cows instead of consumers. For decades its strategy has been to make dairy operations more efficient. It has succeeded: From 1970 to 2006, as the number of cows declined 25%, output per cow more than doubled. But while dairy companies focused on squeezing more milk out of fewer cows, they largely ignored the fact that demand was getting squeezed as well. By the early 1980s, per capita consumption of soft drinks eclipsed that of milk. The kids who had enjoyed four-ounce cartons of milk with their school lunches became the Pepsi Generation who preferred more refreshing soft drinks; later generations discovered vitamin water and sports drinks. Rising milk prices, health advocates who questioned milk’s calories and nutritional value, and activists concerned about bovine hormones further soured sales.

Meanwhile over the past 40 years new milk-based or milk-like products such as yogurt, soy milk,muscle repair formulas, and meal replacements became wildly popular. The original 1963 members of the Pepsi Generation are now 60-somethings with fragile bones, who need calcium and vitamin D but don’t want milk. The 20-somethings who have graduated to Gatorade and bottled water also drink Muscle Milk after a workout and snack on Greek yogurt. Their frail octogenarian grandparents drink Ensure.

In their dogged focus on selling more milk, dairy companies largely overlooked these highly profitable markets, even though they had the lock on the basic ingredient for many of them. Instead, companies like General Mills(which owns Yoplait) are reaping riches from the $1.5 billion-a-year Greek yogurt craze. The $2 billion market for “meal replacements”—powered drink mixes, liquid shakes, edible bars that replace prepared meals and the like—belongs largely to Abbott and Mead-Johnson, both pharmaceutical and medical companies. CytoSport makes Muscle Milk, marketed to fitness enthusiasts to help repair muscles and recover from exercise.

Milk producers also failed to put milk in packages pleasing to on-the-go consumers. In fact, it took them decades to redesign and move away from those messy gable-topped cartons. Shapely one-serving milk bottles that consumers can easily pick up at a convenience store and drink from on the run are a relatively new offering.

In response to competitors that are draining away their business, milk producers have clung stubbornly to their “Got Milk?” campaign, a failed attempt to make milk drinking hip. They’ve clung to their “Real” badge while deriding highly popular soy milk and other milk-like products as “imitation milk.”

What should they have been doing all these years? First, they should have redefined themselves as a dairy-based nutrition provider rather than as a milk business. Other companies, such as United Parcel Services and IBM, successfully stepped back and redefined what businesses they were in to create value-added services that built on their core products. UPS is not just a package shipper; it’s a logistics manager. IBM doesn’t just sell computers and software; it helps companies make their businesses more competitive with consulting and information technology services.

Had it defined itself as a nutrition provider rather than a milk producer, the dairy industry could have shifted its focus from production to marketing. Milk companies could have been faster to recognize the opportunity to create milk-based beverages that met growing consumer demand for more refreshing drinks. They could have added popular, high-margin products such as yogurt and nutrition shakes to their portfolios, to insulate themselves from swings in the demand for milk, instead of letting companies like General Mills move in.

Milk producers also should have embraced grab-and-go packaging long ago, to move milk beyond the breakfast table. They should have formed strategic partnerships with other companies, as Campbell’s Soup did when it partnered with the Coca-Cola Company to distribute V8, and as Pepsi did with CytoSport to deliver Muscle Milk.

Can the industry turn over a new leaf? In a time when many are pondering resolutions for the new year, the milk business needs to do some serious soul-searching. Maybe its resolutions will be to listen more; to focus on others rather than on itself; to find new ways its products can help people improve their nutrition and live better lives.
But as long as it continues its narrow focus on cows and production, its outlook will continue to sour.

Originally published in Forbes Magazine on November 21, 2012.

With two-thirds of American adults tipping the scales these days as overweight or obese, the same lawyers and activists who took on Big Tobacco are now sharpening their knives for their next target: Big Food. A look at activist crusades against the automobile, tobacco, and other industries over the last century provides three lessons: The war will be long, both sides will dig in, and the losses will be unnecessarily heavy all around.

History shows there is a better way, but it will demand unusual cooperation by all, especially by the $1.2 trillion food industry, whose primary challenge is to recognize the attack not as a threat but rather as an incredible new profit opportunity. The activists, for their part, must engage the industry not with diatribe, which can lead to protracted legal battles, but by understanding the industry’s pressures and playing to its best interests. Common ground abounds for both sides. If the activists discover it, they will see that the industry’s marketing savvy and financial clout can be turned into instruments for benefiting consumers.

More than a dozen law firms that took on tobacco firms in the last decade now have filed suits against companies like ConAgra and PepsiCo, charging them with misleading labeling and health claims. In September, New York City’s Board of Health approved Mayor Michael Bloomberg’s ban on sales of sodas bigger than 16 ounces at restaurants, movie theaters, and food carts. It will go into effect next March if the soda lobby fails to contest it successfully. And Bloomberg isn’t finished. He’s crusading against junk food in prisons and potato chips in Bronx bodegas. The Federal Trade Commission recently won a settlement against Dannon over claims about its products’ health benefits. In July, the Center for Science in the Public Interest sued General Mills for allegedly putting artificial ingredients in Nature Valley products marketed as natural.

The history of activist movements against an industry’s controversial products and practices is a study of long, costly battles with little quick relief, especially to consumers. Consider that by the 1960s more than 50,000 people a year were dying in car crashes, despite the fact that crash experts had been sounding the alarm about safer car designs since as early as the 1930s. The alarm went unheeded by U.S. automakers for many more decades; they embraced safety only when they lost market share to more safety-conscious competitors. Consider, too, that more than 2.5 million lives could have been saved if everyone had quit smoking when the U.S. Surgeon General first unveiled tobacco’s dangers back in the 1960s. The tobacco industry fought for 50 years to stave off public health efforts to tax and ban smoking, and many lives were lost.

Well-meaning activists are dusting off their old strategies of research, regulation, and litigation to use against Big Food. Trying to force the risk-averse food industry to jettison time-proven brands and add healthier products will be a slow process. The industry has long memories of expensive, high-profile flops. Even countering the lawsuits will be less costly than risking another debacle such as New Coke or McDonald’s McLean Deluxe sandwich.

Yet both sides are overlooking a golden opportunity that could help everybody win, food companies and consumers alike. In fact, the obesity crisis may just be the food industry’s biggest market opportunity over the next 10 years.

Hard to swallow? Consider what might have happened if American automakers in the 1960s had begun designing and building safer and more fuel-efficient cars just after Ralph Nader first published his seminal book, Unsafe at Any Speed. Instead, their response to activists like Nader (whose book took the industry to task for resisting safety features) was to dig in their heels. They resisted adopting voluntary safety improvements because, they claimed, “safety doesn’t sell.”

So the U.S. auto industry let foreign competitors like Volvo and Mercedes-Benz take the lead in adding features such as three-point seat belts, crumple zones, and side air bags. It also allowed Japanese automakers to make strides in safety and fuel-efficiency and rapidly gain new U.S. customers. U.S. automakers found out the hard way that safety did indeed sell. By 2009, when two-thirds of the public said that safety was the most important factor in buying a new car, U.S. car manufacturers’ share of the American market had plunged by more than half since 1965, from 91% to 44%. Safety turned out to be a huge moneymaker for the auto industry, not an immense financial burden.

In contrast to automakers, look at how the beer industry responded to activist groups such as Mothers Against Drunk Driving, which began targeting the alcoholic beverage companies about three decades ago. Top brewing companies got ahead of the issue. They worked to lighten up both the alcohol content and the calories in their beer, and they began a campaign to encourage people to drink responsibly. Light beer now accounts for four of the top five best-selling beers. The top brewers have doubled their profit margins, even while losing market share to wine and liquor and spending $875 million over the past three decades—and while telling people not to drink too much.

The soft drink industry has been fighting activists who paint it as the bad guy in the obesity crisis. It should take a cue from its brethren in beer, and, indeed, from its own success in selling more water and fewer sugar-sweetened products. Consider that soft-drink makers today enjoy some of the highest operating profit margins in the food industry, even though some have reduced their calorie footprint (the average calories sold per capita) by a quarter over the last decade. Zero-calorie carbonated beverages and bottled water are now a bigger part of the mix, and consumers are clamoring for them. Instead of fighting the campaign against Big Gulps, the soft drink industry should be looking for the next big opportunity.

New research is already proving that the profit opportunities are there. One study by my organization, the Hudson Institute, has found that food companies with higher percentages of healthier food sales in their portfolios report healthier bottom lines. Hudson, an independent policy research organization, recently looked at 15 consumer goods companies that sold varying percentages of “better for you” products—ones with reduced calories, marketed in smaller portion sizes, or whole-grain and other foods generally recognized as more wholesome. These products accounted for less than 40% of the companies’ sales between 2007 and 2011 but drove more than 70% of their sales growth. Companies selling above-average levels of better-for-you foods and beverages enjoyed higher operating profits, larger returns to shareholders, and a better image among consumers, branding studies have shown.

In short, the food industry can still enjoy healthy profits while doing the right thing, urging restraint and selling products that deliver more nutrients or fewer calories.

What will it take to get the entire food industry to hear this message, instead of spending time and resources fending off its attackers? First, activists and the industry need to change the rules of engagement. When hardcore activists begin to oppose an industry, industry executives become defensive and competitive. Under attack, they grow even more opposed to change and dig in and fortify their positions. Message to activists: Pursuing harsh regulations and litigation only prolongs the time it takes to reach a solution.

Materials science provides the perfect analogy for this problem. When it is backed into a corner, the food industry, which is highly traditional, can become an immovable, impervious solid. The activists display combustible gas behaviors. They’re highly reactive, sometimes explosive, but unable to change the solid very much. Only a liquid state can get anything done, but neither side is willing to undergo a fundamental change.

The public health outcry over less nutritious food promises to be very combustible. Many have compared it to the fight against Big Tobacco, which is now paying a $206 billion settlement to states that claim that smoking-related illnesses increased their Medicare costs. Activists hope to paint food as, like tobacco, a highly addictive threat to public health.

The escalating war against Big Food has a key difference: Unlike tobacco, food companies manufacture a necessity to public health, and nobody can argue that it shouldn’t exist. Its antagonists need to approach this industry differently. Most of all, food executives need to look behind the vitriol and see a very real opportunity, to make more money and do good at the same time.

Originally written in The Atlantic Online on August 30, 2010

This is the fourth in a series covering the personalities of the most influential players shaping the obesity debate. Previously, I introduced restaurant operators and grocers, cousins in the sense that they are wired to focus on the details and keep their retail outlets running efficiently so they can eke out modest profits. Today I’d like to present their (unwelcome) in-laws, whom they deride as the Food Police: academics and activists.

Recall that restaurateurs and grocers, to use my chemistry metaphor, are “solids,” traditionalists who defend the status quo and often hold black-and-white perspectives. They are excellent and practical as operators, but dealing with strategic issues such as obesity and customer health generally is far down on their list of priorities. And the ones who remind them about their neglect are their frequent nemeses.

Through the eyes of the “solid” grocers and restaurateurs, these defenders of the food faith—the researchers, academics, and public health activists—come across as pure “gas.” In fact, the contrast between these groups is striking:

• Solids are most comfortable with the facts. Gases deal in abstractions.

• Solids are practical and down-to-earth. Gases prefer to be more innovative and creative.

• Solids are implementers that get things done … now. Gases are idea people, and oftentimes execution is secondary.

• For solids, change is a dirty word. For gases, change is an end in and of itself.

Worsening this gap are attitudinal differences. For instance, the solid food operators perceive a “we know what’s better for you” attitude coming from the academic community and take that as an insult. On the other hand, many researchers and activists feel that industry is too stuck-in-the-mud to listen to their arguments about why change is necessary.

The retailers argue that the researchers don’t know how to run a business and do not fully appreciate what an executive has to deal with to be successful, such as meeting quarterly earnings targets, improving sales and market share, and increasing the stock price. Most advocates take the high ground and offer the rebuttal, “So what! It’s more important to fix these problems.”

Perhaps most revealing is the political bent of each group. Anyone who has ever attended a PAC event sponsored by the restaurant or supermarket industry knows that these food capitalists lean heavily to the Retail Right. In contrast, academic researchers and activists overwhelmingly support liberal causes and are what we might call Food Leftists. The bottom line is that the members of the Retail Right see these Food Leftists as “ivory-tower-ish” and pushing for change they don’t believe in. The retort is that the retailers are boorish and stuck. They’re the party of “No!” to any progress in improving America’s health.

Let’s review an example of how these differences play out.

In the early 1990s, researchers identified trans fats found in partially hydrogenated frying and baking oils as a hazard to consumer health. Studies indicated that these oils yielded the double whammy of raising bad cholesterol (LDL) while lowering good cholesterol (HDL), resulting in at least 30,000 heart-disease related deaths annually. Academics and activist organizations started screaming that trans fats were “the biggest food processing disaster in U.S. history,” and pushed to require them to be listed on food package labels or even banned altogether. Yet by the end of the century, little progress had been made.

Things heated up in May 2003 when BanTransFat.com sued Kraft, asking the company to immediately eliminate trans fats in Oreo cookies. The Center for Science in the Public Interest joined in by suing the likes of KFC and McDonald’s.

As expected, there was blowback from the food industry. Some companies refused to support conferences if advocates of eliminating trans fats, like Walter Willett, chair of Harvard’s Department of Nutrition, were invited to speak. Dan Fleshler, a spokesman for the National Restaurant Association, was quoted as saying, “We don’t think that a municipal health agency (like New York City’s) has any business banning a product that the Food and Drug Administration has already approved.”

Perhaps the real reason for resistance goes back to the basic wiring of the “solid” restaurants: concerns that change would wreak havoc.

With over 10 billion pounds of frying and baking oils under contract, replacing oils meant disrupting nationwide supply operations. In addition, there were minimal stockpiles of acceptable non-hydrogenated oils that could yield similar taste and quality of fried and baked foods. Even if you could find the oil, the cost was higher. And don’t forget the industry’s memory that these partially hydrogenated wonders were originally touted as “healthier” replacements for the previously used lard and beef tallow oils.

The interactions between solid food retailers and the gases pushing for healthier products can be summed up best by Strother Martin’s famous line in Cool Hand Luke: “What we’ve got here is a failure to communicate.” The academics and activists argue for change and expect industry to immediately understand and respond. The restaurant and grocery store operators are like Missouri: you have to “show me” first and give me all the facts and figures before I stick out my neck and risk what I’ve spent ages setting up.

On the surface, it appears there is not much room for progress. The advocates are clearly capable of crafting innovative solutions, but their inability to engage the food industry, as demonstrated by their lack of operating and food management experience, remains a hurdle. Conversely, the short-term perspectives and meager profit margins of retail operators mean that addressing obesity will never be a priority.

So is there anyone left who can make a serious dent in obesity? Can consumers be the ones who step up? Tune in next time.

Written by By Don Sapatkin, an Inquirer Staff Writer at Philly.com/Health

Amy Jordan, a children’s media researcher at the Annenberg Public Policy Center, was walking down Walnut Street one day last summer when she overheard two teenagers talking as they passed a CVS/Pharmacy.

“The boy said to the girl, ‘Let’s stop here, I want to get a soda,’ ” she recalled. “And the girl said, ‘You want to get a soda? That stuff’s nasty!’ ”

Is this the future of soda?

Twenty years from now, will all the school bans and downsized portions and worries about obesity and heart disease mean that things will no longer go better with Coke?

Some things already don’t.

Per capita consumption of full-calorie soft drinks fell by more than 20 percent from 2000 to 2011, according to Beverage Digest. Diet Coke is now No. 2, ahead of Pepsi.

So how far can regular soda fall, and how fast?

Will it go back to being the treat that it was 50 years ago, when vending machines sold 6.5-ounce bottles? Will soda companies find their Holy Grail – a natural, no-calorie sweetener that tastes just like sugar, erasing the line between diet and regular?

“In the very long term, sugar-sweetened beverages, and probably juices, will be regulated in the U.S. just like cigarettes,” said Barry M. Popkin, an economist and nutrition professor at the University of North Carolina-Chapel Hill. He said rising health costs that hurt American competitiveness will be a factor.

Comparisons between soda and tobacco are imperfect. Even second-hand smoke is harmful, whereas soda is more a matter of too many calories coming in for the amount going out. But there are intriguing parallels.

Advertising played a big role in the rise of each – from the American Tobacco Co.’s “Reach for a Lucky Instead of a Sweet” campaign in the early 1930s to the airwaves-saturating battle between Coke and Pepsi a half-century later.

In both cases, education – the surgeon general’s report on smoking in 1964 and various health initiatives on obesity in recent years – coincided with the end of long-term trends.

“But it wasn’t until you saw the policy changes” – cigarette taxes, smoking bans, and advertising restrictions – “where you actually saw decreases” in smoking rates, said Mary Story, who studies obesity prevention at the University of Minnesota.

There has been no surgeon general’s report on soda, although nearly 100 health groups called for one in July.

So far, the scientific evidence linking soda and obesity falls into three categories:

For years, people drank more and more soda. Daily caloric intake of sugar-sweetened beverages nearly tripled between 1977 and 2001, Popkin found, roughly paralleling the surge in obesity. Teenage boys now get more calories from sugar-sweetened beverages than from any other food or drink.

Liquid calories don’t make you feel full in the way that solid food does, so the body doesn’t compensate for them by eating less, a growing body of research has found.

Emerging evidence suggests that high-fructose corn syrup, a mainstay of soda, might be metabolized differently from other substances.

If soda is on a tobacco trajectory, said Kelly D. Brownell, director of Yale’s Rudd Center for Food Policy and Obesity, then “everything is happening at a very accelerated rate.”

In less than a decade of scrutiny, sugar-sweetened beverages have been removed from most schools nationwide; portions are set to be cut by law in New York; calories are labeled by mandate in such cities as Philadelphia and will be voluntarily in Chicago and San Antonio, Pepsico and Coca-Cola said this month; and various soda taxes have been proposed, with two more on local ballots in California next month.

Even when the anti-soda lobby loses, as it has with every tax so far, more “information comes out. . . . Usually consumers only hear what the food and beverage companies say,” said Harold Goldstein, executive director of the California Center for Public Health Advocacy.

The industry, which the Federal Trade Commission estimated spends nearly $500 million a year marketing sugary beverages to adolescents alone, is light years ahead of public health campaigns. But the public health advocates are improving.

The Real Bears, a cartoon video by the Center for Science in the Public Interest that went viral, shows a family of polar bears surrounded by soft-drink advertising as extra-large Baby Bear gets stuck in an ice fishing hole and Papa Bear experiences erectile dysfunction, a side effect of diabetes. They finally pour their sodas into the sea.

“We’re trying to figure out, what are the emotional factors. Does fear work? Does nurturance work? Does humor work?” said Jordan, the Annenberg researcher.

Her findings helped shape a 30-second TV commercial, which is posted at www.foodfitphilly.org, the city health department’s sugary drinks site.

The commercial, part of a $1.5 million ad campaign funded by federal stimulus money, shows a mother driving with her son, thinking about what his doctor said about diabetes. “We’ll fix this,” she says finally, shaking her head at their two big drinks and gazing at her son with concern. “Just wish I’d known sooner.”

No one expects soft-drink manufacturers to go under.

“I kind of view the obesity crisis as the indicator of the next big business opportunity for all these companies,” said Hank Cardello, a former beverage company CEO and author of Stuffed: An Insider’s Look at Who’s (Really) Making America Fat. Cardello said smaller portion sizes and “good for you” beverages tend to be more profitable.

The industry is responding to consumer demand, American Beverage Association spokeswoman Karen Hanretty said, by creating smaller containers and new products like vitamin water.

Some have caught on quickly. But diet sodas, while rising four percentage points in market share as full-calorie fell by four points, are not being consumed any more than in 2000. Hence the industry’s focus on new formulations.

Within two years, “you will see Pepsi and Coke and Dr Pepper coming up with a whole variety of no-calorie sweeteners,” said Harold Honickman, who chairs the region’s largest independent bottling group and worked on the beverage association’s campaigns that twice gutted Mayor Nutter’s proposed soda taxes.

Twenty years from now, Honickman said, “I honestly think you will find ‘regular’ Pepsi, ‘regular’ Coke with new kinds of sweeteners. They will be better-tasting drinks than we have today.”

And truly regular sodas?

“I personally think that soda will remain a large product category in the U.S. Responsibly consumed, it’s not just healthy and fine, it is also fun and tasty,” said John Sicher, publisher of the independent Beverage Digest. What that means differs from person to person, he said.

The American Heart Association recommends that most women consume no more than six teaspoons and men nine teaspoons a day of “added sugar” – the stuff added by manufacturers to cookies, ice cream, fruit-filled yogurt, soda, and anything you stir into your own coffee.

A 12-ounce can of Coke contains eight teaspoons of added sugar.

David B. Allison, director of the Nutrition Obesity Research Center at the University of Alabama at Birmingham, has often played a contrarian role on the soda issue, and the industry refers reporters to him for an opposing scientific viewpoint. But he said that two studies published last month in the New England Journal of Medicine led him to conclude there is now sufficient evidence to show reducing consumption of sugar-sweetened beverages will reduce obesity in certain people.

Eventually, he said, drinking a soda will be akin to smoking a cigar or not wearing a seat belt.

“What I say to my kids” – ages 7, 9 and 12 – “is whenever possible, do not have sugar-sweetened beverages,” Allison said. “If you are at a birthday party and the only beverage available is a sugar-sweetened beverage, and you want to be comfortable [in the group], if that happens once a month, it’s not a problem.”

Originally published in Forbes Magazine on October 3, 2012.

With two-thirds of American adults tipping the scales these days as overweight or obese, the same lawyers and activists who took on Big Tobacco are now sharpening their knives for their next target: Big Food. A look at activist crusades against the automobile, tobacco, and other industries over the last century provides three lessons: The war will be long, both sides will dig in, and the losses will be unnecessarily heavy all around.

History shows there is a better way, but it will demand unusual cooperation by all, especially by the $1.2 trillion food industry, whose primary challenge is to recognize the attack not as a threat but rather as an incredible new profit opportunity. The activists, for their part, must engage the industry not with diatribe, which can lead to protracted legal battles, but by understanding the industry’s pressures and playing to its best interests. Common ground abounds for both sides. If the activists discover it, they will see that the industry’s marketing savvy and financial clout can be turned into instruments for benefiting consumers.

More than a dozen law firms that took on tobacco firms in the last decade now have filed suits against companies like ConAgra and PepsiCo, charging them with misleading labeling and health claims. In September, New York City’s Board of Health approved Mayor Michael Bloomberg’s ban on sales of sodas bigger than 16 ounces at restaurants, movie theaters, and food carts. It will go into effect next March if the soda lobby fails to contest it successfully. And Bloomberg isn’t finished. He’s crusading against junk food in prisons and potato chips in Bronx bodegas. The Federal Trade Commission recently won a settlement against Dannon over claims about its products’ health benefits. In July, the Center for Science in the Public Interest sued General Mills for allegedly putting artificial ingredients in Nature Valley products marketed as natural.

The history of activist movements against an industry’s controversial products and practices is a study of long, costly battles with little quick relief, especially to consumers. Consider that by the 1960s more than 50,000 people a year were dying in car crashes, despite the fact that crash experts had been sounding the alarm about safer car designs since as early as the 1930s. The alarm went unheeded by U.S. automakers for many more decades; they embraced safety only when they lost market share to more safety-conscious competitors. Consider, too, that more than 2.5 million lives could have been saved if everyone had quit smoking when the U.S. Surgeon General first unveiled tobacco’s dangers back in the 1960s. The tobacco industry fought for 50 years to stave off public health efforts to tax and ban smoking, and many lives were lost.

Well-meaning activists are dusting off their old strategies of research, regulation, and litigation to use against Big Food. Trying to force the risk-averse food industry to jettison time-proven brands and add healthier products will be a slow process. The industry has long memories of expensive, high-profile flops. Even countering the lawsuits will be less costly than risking another debacle such as New Coke or McDonald’s McLean Deluxe sandwich.

Yet both sides are overlooking a golden opportunity that could help everybody win, food companies and consumers alike. In fact, the obesity crisis may just be the food industry’s biggest market opportunity over the next 10 years.

Hard to swallow? Consider what might have happened if American automakers in the 1960s had begun designing and building safer and more fuel-efficient cars just after Ralph Nader first published his seminal book, Unsafe at Any Speed. Instead, their response to activists like Nader (whose book took the industry to task for resisting safety features) was to dig in their heels. They resisted adopting voluntary safety improvements because, they claimed, “safety doesn’t sell.”

So the U.S. auto industry let foreign competitors like Volvo and Mercedes-Benz take the lead in adding features such as three-point seat belts, crumple zones, and side air bags. It also allowed Japanese automakers to make strides in safety and fuel-efficiency and rapidly gain new U.S. customers. U.S. automakers found out the hard way that safety did indeed sell. By 2009, when two-thirds of the public said that safety was the most important factor in buying a new car, U.S. car manufacturers’ share of the American market had plunged by more than half since 1965, from 91% to 44%. Safety turned out to be a huge moneymaker for the auto industry, not an immense financial burden.

In contrast to automakers, look at how the beer industry responded to activist groups such as Mothers Against Drunk Driving, which began targeting the alcoholic beverage companies about three decades ago. Top brewing companies got ahead of the issue. They worked to lighten up both the alcohol content and the calories in their beer, and they began a campaign to encourage people to drink responsibly. Light beer now accounts for four of the top five best-selling beers. The top brewers have doubled their profit margins, even while losing market share to wine and liquor and spending $875 million over the past three decades—and while telling people not to drink too much.

The soft drink industry has been fighting activists who paint it as the bad guy in the obesity crisis. It should take a cue from its brethren in beer, and, indeed, from its own success in selling more water and fewer sugar-sweetened products. Consider that soft-drink makers today enjoy some of the highest operating profit margins in the food industry, even though some have reduced their calorie footprint (the average calories sold per capita) by a quarter over the last decade. Zero-calorie carbonated beverages and bottled water are now a bigger part of the mix, and consumers are clamoring for them. Instead of fighting the campaign against Big Gulps, the soft drink industry should be looking for the next big opportunity.

New research is already proving that the profit opportunities are there. One study by my organization, the Hudson Institute, has found that food companies with higher percentages of healthier food sales in their portfolios report healthier bottom lines. Hudson, an independent policy research organization, recently looked at 15 consumer goods companies that sold varying percentages of “better for you” products—ones with reduced calories, marketed in smaller portion sizes, or whole-grain and other foods generally recognized as more wholesome. These products accounted for less than 40% of the companies’ sales between 2007 and 2011 but drove more than 70% of their sales growth. Companies selling above-average levels of better-for-you foods and beverages enjoyed higher operating profits, larger returns to shareholders, and a better image among consumers, branding studies have shown.

In short, the food industry can still enjoy healthy profits while doing the right thing, urging restraint and selling products that deliver more nutrients or fewer calories.

What will it take to get the entire food industry to hear this message, instead of spending time and resources fending off its attackers? First, activists and the industry need to change the rules of engagement. When hardcore activists begin to oppose an industry, industry executives become defensive and competitive. Under attack, they grow even more opposed to change and dig in and fortify their positions. Message to activists: Pursuing harsh regulations and litigation only prolongs the time it takes to reach a solution.

Materials science provides the perfect analogy for this problem. When it is backed into a corner, the food industry, which is highly traditional, can become an immovable, impervious solid. The activists display combustible gas behaviors. They’re highly reactive, sometimes explosive, but unable to change the solid very much. Only a liquid state can get anything done, but neither side is willing to undergo a fundamental change.

The public health outcry over less nutritious food promises to be very combustible. Many have compared it to the fight against Big Tobacco, which is now paying a $206 billion settlement to states that claim that smoking-related illnesses increased their Medicare costs. Activists hope to paint food as, like tobacco, a highly addictive threat to public health.

The escalating war against Big Food has a key difference: Unlike tobacco, food companies manufacture a necessity to public health, and nobody can argue that it shouldn’t exist. Its antagonists need to approach this industry differently. Most of all, food executives need to look behind the vitriol and see a very real opportunity, to make more money and do good at the same time.

I spoke on the recent BBC series “The Men Who Made Us Fat”. Around the world, obesity levels are rising. More people are now overweight than undernourished according to the documentary. My appearance times are noted below.

The Men Who Made Us Fat Part 2 of 12 (The Beginning)

The Men Who Made Us Fat Part 4 of 12 (11:00)
 
The Men Who Made Us Fat Part 6 of 12 (7:55)