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.

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 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 applaud Michelle Obama for targeting childhood obesity as a priority and advocating for programs that improve the well-being of our youth. But I challenge her approach as it does not go far enough.

While efforts to increase the number of “healthy schools,” encourage more exercise, and improve the availability of more nutritious food in low-income neighborhoods are noble, they do not attack the real enemy in the battle of the bulge: the number of excess calories available to eat. This is the missing link.

Rather than looking at the food industry as a pariah, it’s time to reach out to them.

Putting into effect tax incentives that entice food companies to sell fewer calories will yield more tangible results than pushing for more consumer behavioral change. These incentives can be structured to reward companies that cut their calories. Conversely, if marketers continue to spew excess calories on the public, they would risk losing favorable tax treatments.

An Obama program fueled by an energized food industry would be a strong one-two punch to knockout obesity. Our children’s health depends on it.

Today it was revealed that a number of food companies have been quietly lowering the amount of salt in their products over the past few years. Icon brands such as V8 vegetable juice, Chef Boyardee canned pasta and Orville Redenbacher microwave popcorn have each shed more than 30% of their sodium content.  They got caught doing the right thing.

This Stealth Health approach offers a more enlightened way to ensure that consumers really do stick with changes intended to improve the nutrition of packaged foods and beverages. This is in contrast to the “stick” approach of taxing consumers or banning favorite ingredients to force changes in eating habits which rarely are adhered.

Why do I like Stealth Health? For one, food corporations have been deploying “stealth” tactics for many years to reduce costs.  Little by little, tweak by tweak, the iconic brands that we enjoy have all been tinkered with over the decades – all without us knowing so that we don’t abandon ship.

Stealth Health also avoids overtly depriving the public of the foods and beverages they enjoy. This is why diets fail. Instead of expecting consumers to abandon their favorite foods, improving the nutrition and/or reducing calories below the radar does not upset this delicate balance.

And, it sidesteps consumer suspicions that if a food is “healthy” it can’t taste good (witness cereals that have tasted like cardboard or the first soy hot dogs). Virtually every piece of research I have encountered confirms that, for foods that are typically more indulgent, the consumer believes that making these foods more healthy results in poorer taste.

For a half century, the food industry has quietly produced 29% more calories per person to eat every day.  It’s time to reverse that trend in the same way – quietly. Obesity will not be solved overnight, but by taking cues from the Salt Wars, food companies now have the blueprint on how to secretly perform nutritional surgery on their brands and go about taking the calories out without compromising their profits.