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.

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)

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?

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.

The tragedy in the Gulf of Mexico offers a management lesson to food marketers on how not to deal with a crisis. Specifically, I refer to the obesity epidemic. Here’s what I mean.

First, there’s the blame game. No one is taking responsibility for the Gulf disaster. BP points its fingers at Transocean who throws a hot potato to Halliburton who points back to BP as having ultimate responsibility. A similar dynamic persists in the obesity debate. Activists blame corporations for spewing excessive fuel (i.e., calories) on the consuming public; food corporations counter that they offer healthy options and decry that regulators are unfairly trying to tax them; and all the while consumers continue to chomp away at anything put in front of them.

Then there’s this sticky matter of the unintended consequences of the spill on the health and wellbeing of all those affected: wildlife, the environment, the food supply, local economies, and laborers. It appears that none of the parties planned for this eventuality. So too with obesity. Food marketers did not intend that Americans get fat. Clever marketers simply discovered the formula for providing excellent value for their customers. And in turn consumers complied. Now two-thirds of Americans are either overweight or obese.

Finally, neither BP nor the food companies have put the genie back in the bottle. By this I mean that the causes for concern (oil and calories) still run rampant. For BP, this not only means a public relations nightmare but also likely criminal proceedings. It will also pave the way for new, more draconian regulations and a radical shift in energy policies, to the detriment of the petroleum companies. With minor exceptions, food marketers also have not put the lid on calories and will continue to feel the heat of regulators, activists, and consumers until they do.

So what can food marketers do?

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U.S. News and World Report recently featured ‘Stuffed’ and interviewed Hank on solving the obesity crisis:

“In more than 30 years of working in the food industry, Hank Cardello didn’t think much about the health consequences of the products he promoted, whether Betty Crocker cake mixes, a proposed new malt liquor, or Diet Coke. He thinks about them plenty now, though. After a cancer scare in 1995, Cardello switched gears and started to look more critically at how his industry might help combat obesity. He’s now CEO of 27 Degrees North, a consulting firm that helps companies marry profit and social responsibility. In Stuffed: An Insider’s Look at Who’s (Really) Making America Fat (Ecco), just released in paperback, Cardello lays out his views on why consumers are not entirely to blame for their own girth, why well-meaning government regulations often fail, and how the food industry might put its marketing oomph behind better alternatives to some of the high-calorie packaged foods that Americans snarf down. Here are edited excerpts from our conversation…”

Focusing on food package labels as a panacea for the nation’s overweight and obesity crisis is like rearranging deck chairs on the Titanic: lots of activity, but no real impact. Too much emphasis is placed on micromanaging acceptable levels of trans fats, sodium or the type of sugar used rather than focusing on the big picture. We need to engage the food corporations to lower the calories.

Labels alone cannot change the fact that for Americans there are 29 percent more calories available to eat than 50 years ago. Obesity is a supply problem and must be dealt with at the source.

A better way to start reducing America’s collective girth is to give food corporations incentives to sell less calories in a way that does not damage their bottom lines. One novel approach would be to adjust the deductions food corporations receive for their advertising expenditures based on their willingness to cut back on calories.

Companies that lower calories get to maintain their deductions. Those that do an exceptional job of cutting calories by more than 10 percent in a year can receive even higher deductions. And those that continue to spew excess calories on their customers would forfeit a percentage of these favorable tax treatments.

Unlike punitive “fat taxes” on soda, candy and snacks, which hurt industry sales, raise costs to consumers, and result in corporate push-back, a better approach would give food companies reason to reduce the calories they sell. It’s time to recognize that the food manufacturers must be a partner in helping to solve the obesity problem.

Do We Need to Know What’s in Junk Food? – Room for Debate Blog – NYTimes.com

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.

During a Live Chat session following an appearance on Good Morning America  last week, I received a number of good questions from the audience about food products, ingredients and their impact on diet, health and obesity. While my focus was on simple ways to help lower caloric intake for those who are struggling with their diet, the most common questions raised were concerns about the “toxins” in our foods and beverages, particularly as it related to

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