Originally written in The Atlantic Online on August 12, 2010

This is the third in a series analyzing the psyches of those involved in the obesity debate. Last time, you met the restaurant operators and learned that keeping the kitchens running will always trump matters such as obesity. Today you get to meet their cousins, the grocers.

According to the Food Marketing Institute, there are more than 35,000 supermarkets in the U.S., and, last year, Americans spent $557 billion on groceries. But don’t be deceived by this huge number; their profits are pitifully low, at only 1 to 2 percent of sales. This forces them to live in the present, since it is a survival-of-the-fittest business.

Like their restaurant-industry relatives, grocers can best be described—to use the gas/liquid/solid metaphor I’ve borrowed from chemistry—as “solids.” By this I mean that they are traditionalists who defend the status quo and value protocol and structure. Logical, organized, and realistic, they are quick to make decisions and get things done. They are well suited to dealing with a taxing retail environment.

Shoppers select almost 60 percent of the brands they buy during the act of shopping itself.
This means that grocers have undue influence over what consumers buy.

Those entrusted with managing grocery departments are responsible for a whole host of tasks, including the purchasing of food items, managing inventory levels, identifying and adopting new products, product merchandising, employee scheduling, delivering excellent customer service, and setting prices.

Concerns about competition and labor costs (they know these to the penny) often consume them. And close attention is paid to same-store sales compared to last week. But perhaps the worst six-letter word for a grocer, according to former Harris Teeter President Bob Goodale, is “shrink,” the amount of money that walks out the door because of employee theft, shoplifting, and backdoor mistakes and dishonesty. With shrink over 2 percent and profits under 2 percent, this is a make-or-break matter that keeps grocers awake at night and forces them to be diligent about the details.

With this as background, it becomes obvious that attacking Big Picture issues such as obesity falls far down the priority list. Of higher import is the “now”: squeezing a profit out of every square inch of the store.

One way grocers use their practical thinking skills to generate profits is to use “power” items to drag the customer through the store. These are the staples consumers buy, like bread, milk, bananas, ground beef, chicken, and eggs. Grocers know you need them and place them in far away locations, like the back of the store, to expose you to more of their offerings. It’s very similar to finding your way through a maze.

Another way grocers “find” money is by getting food marketers to pony up in order to place their products in the best, most prominent locations in the stores. Bestselling national brands like Pepsi and Kellogg’s pay handsomely for the privilege of being up front or more visible on the shelf. But oftentimes these fast-selling items come with a high-calorie sticker price.

Is there anything grocers can do to help us check-out with fewer calories? The answer is “yes,” if they remember that shoppers select almost 60 percent of the brands they buy during the act of shopping itself. This means that grocers have undue influence over what consumers buy. It’s time for them to exercise this power.

That means they can set up special sections for healthy kid’s lunches, insist that certain display space be reserved solely for lower-calorie products, and add healthier snacks at the checkout line.

But are they likely to do this on their own?

Alas, like their restaurant kin, the “solid” grocers are unlikely to lead us out of the obesity mess. The business survives on razor-thin profit margins and those who toil there must simply attend to the day-to-day rigors of the grocery aisles. The grocer personality is not aligned with fixing a complex problem like obesity.

Only with pressure from the top will there be any meaningful change. Perhaps chains like Safeway, with their Healthy Measures program, or Walmart, which has taken a proactive role in forcing suppliers to be more environmentally responsible, can lead the way? The jury’s still out, so we’ll have to wait and see.

In our next feature, you will meet those sitting on the opposite side of the obesity table: the researchers, academics, and public health activists, otherwise known as the Food Police.

I was a Speaker at the 2012 Colorado Health Symposium on July 25-27, 2012 during the interactive debate titled “Food Fight: Who Gets to Decide What Our Children Eat?”

Is healthy eating a function of personal choice that should not be subjected to government regulation? Experts on opposite sides spared over this question as you can see in the above video link.

The main topic of the health symposium this year was “Health Equity: Bridging the Divides”

Keystone Resort and Conference Center“Everyone suffers when people can’t access basic health needs. In recent years, economic uncertainties have imposed financial burdens on our health systems and services as more people join the ranks of the poor and the unemployed. But it’s not just those who live in abject poverty that don’t have affordable health insurance, quality medical care, or opportunities to make different choices for themselves and their families. Poor population health further undermines our country’s fiscal health and ultimately impacts us all.

The theme for the 2012 Colorado Health Symposium, “Health Equity: Bridging the Divides,” sets the tone for a more equitable future. The three-day conference challenges presenters and participants to define opportunities for greater affordability, access and choice, resulting in enhanced productivity, reduced health costs and ultimately improved lives.

With an emphasis on innovation and real-world solutions, the Colorado Health Symposium features fresh perspectives and new ideas from national thought leaders in health and health care. Set in beautiful Keystone, Colo., this annual event is regarded as one of the most widely discussed health policy conferences in the country.”

If you are interested in viewing other videos from the Symposium or reading about the various presentations please go to the online Symposium University.

    The Combo Meal Mindset

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    Originally written in The Atlantic Online on August 5, 2010

    This is the second in a series covering the psyches of the key players involved in the obesity debate. My purpose is to highlight the strengths and blind spots of each participant so that we can better understand how the obesity epidemic got here, what can be done, and who can (really) fix it. First up are the restaurant chains.

    The impact of restaurants on our economy is enormous. There are almost 1 million restaurants (945,000) in the United States, and the industry employs 12.7 million workers. Americans spend $580 billion a year at restaurants, which represents almost half (49 percent) of our total food expenditures. That’s more than the entire gross domestic product of Switzerland, Poland, or Sweden.

    The restaurant industry operates in a distinctive fashion and its personality can best be described—to use the chemistry analogy I introduced last time—as “solid.” Recall that solids prefer the status quo and dislike anything that disrupts how they conduct business. Their focus is more short-term, but they are exceptionally good with following through and getting things done. They are traditionalists who frequently take either/or positions and are politically conservative.

    As “operators,” restaurants must pay attention to a litany of detailed tasks, otherwise their business will suffer. Their job is to make sure that everything works smoothly—that everyone’s fed the right product at the right time; the lights are on; and the bathrooms are clean. Day in and day out. Since their gross profits are less lofty than packaged goods and soft drink marketers, restaurant chains face particularly big challenges just trying to manage their businesses. An inordinate amount of attention must be given to efficient scheduling, shipping and utility costs, reducing high rates of employee turnover, food safety and cleanliness, and customer service.

    Attention to these matters is absolutely essential for success. The flip side of this coin is that restaurants can be somewhat myopic. This is why many restaurant chains have been in denial too long about their role in contributing to their customers’ expanding girth.

    This restaurant mindset is why we end up with menu offerings such as combo meals and supersized beverages. Combo meals were born out of operational necessity. Restaurants observed that customers were having difficulty quickly deciding what they wanted to order off a menu board. This resulted in long waiting lines and the loss of patrons unwilling to wait. Enter the combo meal, which made it easier to pick predetermined items for a set price. Not only did lines move more rapidly, but restaurants were able to sell an extra item like French fries for a nominal increase in price with each order, thus improving revenues and profits.

    From a business standpoint, this is easy to understand. But it has turned out to be a different story for America’s waistlines, as extra calories were being unloaded onto fast food trays. A University of Wisconsin study showed that the small price increase of 15 percent for a combo meal delivered an extra 73 percent more calories.

    A similar dynamic occurs with supersizing drinks. An iced tea or soft drink basically costs a penny an ounce (plus about three cents for the lid, cup, and straw). The economics become plain when one realizes that a 64-ounce Double Big Gulp can be priced to yield more profit than a smaller 24-ounce serving.

    The industry’s true “solid” character manifested itself recently with the brouhaha over whether to post calories on menu boards. Initially, the industry resisted the changes proposed for New York City, citing concerns over costs and hassles tied to changing menus and the inability to handle all the different menu items, which would each register a different caloric content. Instead, industry spokespeople touted that restaurants offered plenty of healthier options and consumers should take responsibility for their eating decisions. Emphasis should be placed on educating Americans on a healthy diet and exercise.

    While seemingly sensible, this point of view is short-sighted in that it bypassed the opportunity to embrace the change and signal restaurants’ commitment to being part of the solution by helping customers select lower calorie options. In the end, the industry supported the measure, now part of health care legislation—but only after recognizing that if it resisted it would have faced a costly and disruptive patchwork of municipal and state requirements instead of a single national standard.

    So what does all this mean?

    Despite its size, the restaurant industry cannot be expected to lead the charge to slim down America. It’s simply not in restaurants’ wiring. The “operator” personality simply cannot deal with a big picture issue such as obesity. Only with impetus from the top—CEOS and industry leaders taking a stand and lowering the number of calories they sell—can there be change.

    Next time I will introduce you to the grocers, those master merchandisers. Will they be the ones to lead us out of the obesity mess?

    Recorded Live on July 6, 2012

    CNBC Video “Mayor’s Soda Ban: Corporate Backlash?”

    New York City Mayor Michael Bloomberg may be trying to ban the big gulp, but fast food companies may have the upper hand, with RJ Hottovy, Morningstar Analyst, and Hank Cardello, Hudson Institute.

    Originally written on May 1, 2010

    The White House Task Force on Childhood Obesity just unveiled its plan to solve childhood obesity.  The report’s recommendations ranged from encouraging schools to work with local growers to providing economic incentives for fruits, vegetables and grains to displaying calorie counts on restaurant menus.

    The report leans heavily on parents, health care providers, the medical community and government agencies to drive solutions. The reality is that these constituencies have failed for over two decades to effect a lasting resolution to America’s overweight and obesity crisis.

    Rather than highlighting seventy-odd recommendations on what should be done, we would be better served if focus were placed on the two most critical issues: (1) lowering the number of calories that our children eat, and (2) educating them how to eat well. And that means engaging the food marketers and suppliers.

    Why calories? Because calories available for individual consumption have increased by 30% since 1970. Efforts to ban or limit high fructose corn syrup, sodium and saturated fats only diffuse focus on the real issue. Lower calories and, surprise, fats and sweeteners also go down.

    A good place to start is in our school systems. Schools offer a “controlled” environment unlike home or play situations. School districts can immediately demand that their foodservice and vending machine suppliers lower the average number of calories they sell per student by 20%. This can be achieved by reconfiguring entrée meals or providing lower calorie snacks in vending machines. And profit margins would not be hampered.

    Second, instead of limiting or banning advertising to children, we should leverage the $1.6 billion spent on child food ads to educate them by incorporating a portion control and/or nutritional and/or exercise message. All ads directed to children must contain these messages and they would be limited to products that meet certain science-based nutrition standards. This $1.6 billion in advertising dwarfs available government funds for education and would make a serious dent in communicating important nutritional messages to children.

    It’s time to look beyond recycled solutions and capitalize on the food marketer’s ability to effect positive change.

    Originally written in Food Technology Online on May 17, 2010

    Obesity is now a national burden with two-thirds of American adults either overweight or obese. No regulatory measure or amount of consumer prodding has proven effective in addressing obesity. It’s time to change the playbook and look to food marketers as the best solution.

    The debate around obesity has centered on food industry mouthpieces stating that consumers are offered plenty of healthy choices and should take personal responsibility for what they eat. Public health advocates and regulators counter that food marketers have acted irresponsibly by promoting foods and beverages that are inherently of poor nutritional quality and they must be held accountable.

    Soda taxes offer a case in point. The argument for taxing sugared soft drinks and beverages is based on projections that a 10% tax would lower consumption by a corresponding 8–10% and generate $150 billion in government revenues over 10 years. Pretty compelling, except for one missing ingredient: there is scant evidence from academic studies that obesity rates would decline.

    The real culprits, no matter what the source, are excess calories. Since 1970, the number of calories available for each of us to ingest has increased by a whopping 30%. What went up must now come down.

    No one is better equipped to deal with depleting this overabundance of calories than companies like Coca-Cola, General Mills, and Kraft. Rather than taxing, a better approach is to offer them incentives to lower the calories they sell.

    One initiative I am advancing is the “20 by ’20” program, designed to reduce the supply of calories 20% by the year 2020. It offers all packaged foods marketers and restaurant chains a straightforward quid pro quo: keep your tax deductions for advertising in exchange for lowering the number of calories per serving you sell. Specifically, food manufacturers and restaurant chains must lower their calories sold by 2% each year for 10 years in order to retain their deductions for advertising.

    So, if the makers of items like Pepsi, Lunchables, and Monster Thickburgers lower their calories by 2% per year, they get to keep their deductions. Lower them by 10% or more in a given year, they receive a 25% bonus on deductions. But, do less or spew more calories on the consuming public, and companies will see a reduction in their deductions.

    From a corporate perspective, the flexibility to determine which products to change or promote offers a huge advantage over a government imposed one-size-fits-all tax mandate.  And progress is easily tracked.

    Why should food corporations go along with this? There are three good reasons:

    • An opportunity to get ahead of regulators and avoid more draconian measures like soda and “fat” taxes.
    • A demonstration to consumers who purchase on the basis of corporate responsibility that the marketer cares about their customer.
    • An ability to improve bottom line profits.

    It is time that food marketers recognize that becoming part of the solution to obesity presents them with one of the biggest opportunities in decades. It’s just good business.

    With two-thirds of American adults and one-third of our children either overweight or obese, it is clear that the regulations, strategies, and tactics deployed to reverse this albatross have been ineffective. What has dumbfounded me is that we rarely ask the following question: why has nothing worked?

    So far, too much emphasis has been given to “being right” rather than fixing the problem. A “my way or the highway” mentality prevails. Many blame the food marketers for pushing junk foods. Others hold consumers responsible for not eating well or exercising. While each of these arguments has merit, neither camp has served up any lasting solutions.

    We have spent countless years defending status quo positions or demonizing others for perpetuating obesity, but have overlooked the most basic aspect of the combatants—that is, their wiring. By this, I mean that we have not considered the core personality type of each entity that is a player in this ongoing obesity drama.

    Why would this matter? Because each party involved in shaping America’s obesity problem views the situation through a different lens. This is why the one-size-fits-all approaches that have been prevalent fall flat. Once we finally unlock the psyches of grocers, restaurateurs, packaged goods marketers, health advocates and activists, nutritionists, and consumers, we become privy to their motivations and limitations. When we understand what makes each party tick, we gain the knowledge to effect real, constructive change.

    A simple way of describing each actor’s behavior is by drawing a parallel to the elements: each player is either a solid, a liquid, or a gas.

    Solids care about defending the status quo. They’re traditional, risk averse, dislike change, and take either/or positions. More often than not, they focus on short-term needs. However, when they do make up their minds, they are capable of sticking with the game plan and carrying through to the end.

    Conversely, gases bring creativity and a forward-looking perspective to the dialogue. They openly embrace change. In fact, the process of change is often the goal. Gases typically chide solids for not seeing the future and are accused by their solid brethren of being impractical and ivory-towerish.

    Liquids serve as the bridge between solids and gases in that they are more likely to see the big picture and think strategically. They bring more of a win-win mentality to situations and can serve as a conduit to lasting solutions.

    In the ensuing weeks, I will dissect the personality of each of the key players in the obesity debate one at a time. You will be able to gain a better understanding of how food executives think; what grocers don’t want you to know; why restaurant chains promote combo meals and supersized beverages; why health advocates and activists push draconian solutions like soda taxes and ingredient bans; and why, with the exception of the most disciplined among us, consumers are doomed to fail with dieting and exercise.

    More poignantly, you will see how barriers to progress have evolved when staunch solids like grocers and restaurant chains interact with the combustible food activist gases. I will also draw parallels to the behavior of political parties—care to guess which party is solid? Which one is more like gas? More importantly, at the end of this series of articles, you will understand how we got here and what viable solutions to the obesity epidemic can emerge that work for all invested parties.

    Next time I will focus on the restaurant chains and provide a glimpse into who they are, how they think, and the real reasons behind larger portions.

    Stay tuned.

    I have just returned from participating in a landmark event. Kudos to the Robert Wood Johnson Foundation and The Food Trust for convening a first-of-its-kind symposium at the University of Pennsylvania to explore ways that grocers can help stem America’s obesity epidemic. Titled “Harnessing the Power of Supermarkets to Help Prevent Childhood Obesity,” the gathering brought together experts approaching the issue from all sides, including food marketing and grocery executives, obesity researchers, policy analysts, and representatives from non-profit organizations.

    The real question is: why hasn’t anyone done this before?

    The silence emanating from the grocery segment has been deafening. Yes, a handful of supermarkets have implemented nutritional labeling on packaged foods, such as the Guiding Stars program pioneered by Hannaford Brothers, but most of the attention has been focused on how to cajole food manufacturers into lowering the calories, fat, sugars, and sodium in their lineups. Despite being on the front lines with consumers, the grocery channel has been missing-in-action and overlooked as a potentially effective vehicle to fight obesity.

    The fact is that most purchase decisions are made while in the act of shopping. A recent Booz & Company study [PDF] highlights that 59 percent of shoppers select the brands they buy when in the store. An overwhelming majority (77 percent) enter stores without detailed shopping lists. And when shoppers have lists, almost one third of them deviate significantly from them.

    With so much indecision about what to buy, supermarkets are in a prime position to influence consumers to purchase healthier combinations of foods.

    It’s time for grocer’s shelves and displays to trumpet brands that offer less calories and a better balance of nutrition. This does not mean that we shouldn’t enjoy our favorite indulgences. It’s just that we need to be reminded of healthier foodstuffs when we are in decision mode. As any Marketing 101 course teaches, it’s all about awareness.

    Marketers and merchandisers know that the more visible an item is, the more it will sell. Studies have confirmed that sales for items on display often increase by a factor of four-fold or more. And as noted in my chapter from Stuffed: An Insider’s Look at Who’s (Really) Making America Fat titled What Grocers Don’t Want You to Know, “eye level means buy level.”

    While we know visibility is critical, too often stores do not display enough better-for-you foods. My own store surveys have illustrated that over 60 percent of stand-alone displays carry items that nutritionists would decry as unhealthy.

    We find ourselves at that watershed moment when it is time to rethink the supermarket. How can we turn grocers’ considerable merchandising skills to help slim us down? With supermarkets’ arrays of sampling programs, displays, interactive shopping carts, and shelf signage, can we not more easily capture shoppers’ attention to purchase healthier foods?

    Ultimately, the real question to engage supermarkets is: can they make more money pushing better-for-you foods? Right now those answers are undetermined. It will take a few adventurous supermarket chains to serve as “pilots” to assess what can work. I will have more to say on this in a future article.

    Please share your ideas on how you think supermarkets can help make a difference in the fight against obesity.

    The 2010 Dietary Guidelines Advisory Committee just issued its findings and recommendations to encourage healthier eating. Containing no surprises, the Committee’s suggestions included four major steps required to help Americans adopt better nutrition and physical activity behaviors, namely:

    • Reducing calorie intakes and increasing physical activity
    • Shifting to a more plant-based diet
    • Reducing the consumption of added sugars, solid fats, sodium, and refined grains, and
    • Meeting the 2008 Physical Activity Guidelines for Americans.

    First published in “pre-obesity” 1980, these reports are issued every five years to provide direction about how dietary intake can reduce risk for major chronic diseases. Since that time, obesity, a diet-related condition, has climbed to become our country’s number-one health issue. Rates in this country have skyrocketed to the point where two-thirds of all American adults are now either overweight or obese. Hardly a successful track record.

    We must face the music. It’s time to drop the Guidelines.

    Why have the Guidelines failed? I can think of several reasons:

    Prescriptions are difficult to follow. Consumers don’t eat carbohydrates, trans fats, and high fructose corn syrup. They eat FOOD. Driving attention to what’s in food rather than the end product is an abstraction. Most people do not relate. We would be better informed if communications were presented in a “real world” fashion. Let us know the dietary impact of French fries, hamburgers, and soft drinks, not just what’s in them. It’s like listing all the parts inside your car without describing the driving experience, ambiance, and color.

    They’re in a different language. Our country’s conversion to the metric system was attempted back in the 1970s. Americans never adapted, and the experiment was abandoned. The food bureaucracy didn’t get the memo. The amounts of ingredients in foods are still given in grams. With many in our country challenged by math, it is too much to expect the public to know what a gram represents. (For posterity, there are 454 grams per pound. RIP.)

    The Guidelines take a one-size-fits-all approach. The Guidelines assume that all of us learn the same way and that once we obtain nutritional knowledge we will change our eating behaviors accordingly. “If they hear it, they will come.” Works fine for the Food Illuminati, but don’t hold your breath for the rest of us. Most analyses suggest that from two-thirds to three-quarters of Americans either struggle to walk their nutritional talk or simply don’t care. Debating the chemistry of trans fats or the pedigree of their cheeseburger offers no interest.

    They offer a micro approach to a macro problem. Addressing obesity and securing our long-term health requires a Big Picture purview. While the Guidelines drill down on the nutritional details, Rome burns. It is no longer of import to learn all the nutritional facts; it’s imperative that workable solutions be offered.

    As I have shared here on the Atlantic Food Channel, the best approach to making Americans healthier and ameliorating obesity is to prioritize and keep it simple. Instead of memorizing a laundry list of rogue ingredients, go after the biggest factor affecting America’s health: calories.

    It sure beats learning the metric system.

    Recent pieces by Corby Kummer on this website and Michael Moss in the New York Times have highlighted a pattern of “delay and divert” tactics employed by certain food companies to resist calls to lower sodium in their products. The articles suggest that corporations are highly motivated to maintain levels of salt for taste, texture, and cost reasons, and that these tactics have historically proven to be quite effective.

    But public health advocates and activists have adopted a new strategy of their own patterned after the 10th-Century Chinese practice of Ling Chi—or “death by a thousand cuts”—in which individual small cuts, non-fatal in and of themselves, add up to a slow and painful demise. Sodium represents just the latest ingredient “cut.” This new strategy is designed to force change in the foods marketed to the American public—ingredient by ingredient—and is turning out to be quite effective.

    Food marketers now appear to be on the defensive, if not in full retreat. Let’s look at the scorecard:

    Trans fats. Typically found in partially hydrogenated oils used for frying and baking, trans fats deliver the double whammy of raising bad cholesterol levels while lowering good cholesterol. The restaurant industry initially resisted calls to ban these oils due to cost and availability reasons. Today, bans have been implemented in several cities, including New York City and Philadelphia, as well as California and parts of Maryland. Other states and cities have advanced similar proposals.

    Listing calories on menus. As part of the recent health care legislation, calories are now required to be posted nationally on menus of restaurant chains consisting of more than 20 units. Industry capitulated when it recognized that multiple municipalities and states would have imposed their own labeling criteria, thus making implementation costly.

    Soda taxes. Local and state governments are thirsty for revenue and several are considering the imposition of soda and/or “fat” taxes. New York is perhaps the most aggressive in pursuing such a tax, with California, Colorado, Philadelphia and Washington in the mix.

    Sodium reduction. Both New York City mayor Michael Bloomberg and Michelle Obama have been most vociferous in admonishing food companies to lower the amount of salt in their products. Expect additional legislative proposals and lower sodium standards to be issued in the near future.

    The trend is obvious. Food marketers are facing the slow Ling Chi-like death of their product portfolios unless they change their mindsets. The old playbook doesn’t work anymore. They must recognize that there will always be the next sodium … the next “cut.”

    Instead of “delay and divert,” it is time to get ahead of the situation. With a new cohort of consumers demanding corporate responsibility for their health, advocates pushing for radical change in the food supply, and governments receptive to regulation, a smarter course of action by food marketers is to embrace that they are custodians of their customers’ well-being and to re-align their products, marketing practices, and business models accordingly.

    Otherwise, a slow death awaits.