Can It Be True? Do Food and Beverage Companies That Sell Healthier Products Do Better Financially?

October 25th, 2011

An e-alert describing a new report caught my eye. Who would have anticipated these results? The Robert Wood Johnson Foundation (RWJF), which announced back in 2007 that it would commit at least $500 million to reversing the childhood obesity problem by 2015, funded the work that led to the report (described below) about the effects on business of selling “better-for-you” foods and beverages.

Food and beverage companies with a higher percentage of their sales resulting from “better-for-you” foods and drinks “perform better financially,” according to a report by the Hudson Institute’s Obesity Solutions Initiative, which was released October 13. Funded by the RWJF, the report, Better-for-You Foods: It’s Just Good Business (link to executive summary), looked at fifteen major companies (such as Campbell Soup Company, General Mills, Kellogg, and Nestlé) and found that sales of better-for-you products, such as diet sodas, yogurts, and whole grain cereals, had a marked effect on sales growth during the period 2007 to 2011.

Make sure to look at the report’s glossary for definitions of “better-for-you” products, “traditional” products (example: Hellmann’s Mayonnaise), “good” products (example: Dannon Yogurt), and “lite” foods and beverages (example: Stouffer’s Lean Cuisine).

The lead author, Hank Cardello (now at the Hudson Institute and a former executive at several food and beverage companies, including Coca-Cola and General Mills) said in an RWJF summary of its grantee’s report that the major findings of Better-for-You Foods provide a roadmap for companies to sell healthier items while at the same time increasing their profits, sales, and shareholder returns, and improving their reputation.

The report lists several implications from the report for the food industry to act on. These include:

• adopting the method of measuring better-for-you sales that was developed for this study so that it is part of  annual corporate sales, financial, and reputational assessments;

• making public health officials and policy makers aware of food and beverage companies’ core business goals so that they can effectively work with businesses to address the obesity epidemic.

Jim Marks, senior vice president at the RWJF and director of its health group, commented in the RWJF summary, “ We hope this report inspires companies to do more to create and sell truly healthy products.” He added, “We still have a way to go, but we believe we can have healthy companies and a healthier country.”

The RWJF awarded a one-year grant of nearly $400,000 to the Hudson Institute; the purpose of the grant was to build the business case for producing and marketing healthier products with fewer calories, the funder said.

The Hudson Institute describes itself as a nonpartisan policy research organization dedicated to innovative research and analysis. Its Obesity Solutions Initiative seeks “practical, market-oriented solutions to the world’s obesity epidemic.”

I love the title of a book that Cardello, who holds a masters in business administration, wrote a while ago: Stuffed: An Insider’s Look at Who’s (Really) Making America Fat.

Related resources:

Health Affairs March 2010 thematic issue on child obesity. See the table of contents here.

Read what an industry group (the Grocery Manufacturers Association) says it is doing about product marketing:

The Three Most-Read GrantWatch Blog Posts during September 2011

October 12th, 2011

It’s time to let you know of the most-read GrantWatch Blog posts during September—in case you missed them when they first came out.

(1) “Philanthropy People Post: Who Is Working Where, Who Has Been Appointed to a Board,” by Health Affairs Senior Editor/GrantWatch, Lee-Lee Prina (September 8). Periodically, I write a blog post focused on people. Included in this post are a change in leadership at the Council on Foundations; Bob Hughes’ new job as a foundation president; Ed Schor’s new job on the West Coast; and more.

(2) “Rural Health: Report from the Kentucky Health Policy Forum,” by Susan Zepeda and Amy Watts of the Foundation for a Healthy Kentucky (September 23). This foundation, located in Louisville, sponsored a policy forum September 13; I invited Zepeda, the foundation’s president and CEO, and Watts, a senior program officer and policy analyst at the foundation, to report on it. Len Nichols of George Mason University, always a good speaker, keynoted the one-day event focusing on the important (and sometimes forgotten) topic of rural health. Other speakers included the secretary of the Kentucky Cabinet for Health and Family Services and Virginia’s secretary of health and human services.

(3) “Foundations Can Drive Investments in Public Health Infrastructure,” by Paul Gionfriddo, a blogger on “Our Health Policy Matters”; a former president of the Quantum Foundation in Palm Beach County, Florida; and a former Connecticut state legislator (September 13). Gionfriddo notes that “our public health core activities and infrastructure have been under attack as state policy makers cope with their ongoing budget crises.” Learn about some good news, though: how some foundations “have been leading the way in helping to finance new public health infrastructure” and how other funders are supporting (private, nonprofit) public health institutes.

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Philanthropy Blogs Roundup: Global Health, Health Reform, Mental Health, and More

October 6th, 2011

Here are a few blog posts that caught my eye as I looked through blogs listed on GrantWatch Blog’s “Blogroll.” Other topics touched on are social media and quality of care.

Global Health

“Soros Pledges $27.4-Million for Rural African Development,” Chronicle of Philanthropy’s Philanthropy Today blog, October 4. This short post summarizes an Associated Press article on the commitment by investor and philanthropist George Soros to donate a second time to the Millennium Villages Project, which launched in 2006. This project strives to help villages in ten African countries meet United Nations (UN) goals that were established back in 2000. (Goals include cutting child mortality by two-thirds and “halting the HIV/AIDS pandemic by 2015,” the post says.)

According to a UN press release, the project achieved several successes in the years 2006–2009; for example, a recently released scientific review said that with the project’s help, the number of households (across eleven Millennium Villages) that gained access to safer drinking water more than tripled.

Read an October 4 post by George Soros on the Open Society Foundations’ Blog for more on why he decided to make another donation, through the foundations, to this effort to end “extreme poverty” in rural Africa.

“Success Story: A New Vaccine Set for Children in Africa,” Rajeev Venkayya on Impatient Optimists blog (of the Bill and Melinda Gates Foundation), September 27. Getting the vaccine that prevents rotavirus—the commonest cause of severe diarrhea—to all children is a “top priority” for the Gates Foundation, Venkayya says. The author cites a statistic that 1.3 million kids die from severe diarrhea each year. And he notes that recurrent episodes of the unpleasant condition lead to malnutrition, susceptibility to other infections, and even delayed development in many more children than that.

The GAVI Alliance, a public charity focused on vaccinating children in developing countries, announced in late September that twelve additional African countries will receive funding to introduce the rotavirus vaccine. (Sudan was the first, in July.) By 2015, GAVI plans to introduce the vaccine in more than forty of the world’s poorest countries.

The Gates Foundation, which awarded a multiyear grant of $375 million (yes, you read that correctly!) to GAVI for general operating support in 2009, is the organization’s leading funder from the private sector. Venkayya is the foundation’s director of global health vaccine delivery.

Fun Fact:

“Why Twitter, Why Now?” Melinda French Gates, Impatient Optimists blog, September 21. Melinda Gates announces here that she has officially joined Twitter. You can find her Twitter page here: Gates plans to use Twitter to “share stories of impact in an instant.” Although Gates is obviously a very wealthy woman, she comments in this post, “In my mind, philanthropy is not about the money.” Instead, “it’s about using whatever resources you have at your fingertips and applying them to improving the world.” A fine suggestion!

Health Reform

“Development of the Colorado Health Benefit Exchange Underway,” Gretchen Hammer, Community Connections blog of the Colorado Trust, September 7. Hammer, who is interim chair of the Colorado Health Benefit Exchange Board, says the board has begun its work to develop the state’s exchange for individuals and small businesses. Hammer (who is also executive director of the Colorado Coalition for the Medically Underserved) notes that the exchange—a health insurance marketplace—will increase such insurance coverage in the state by addressing two of the major impediments for uninsured Coloradans looking to purchase insurance: cost and lack of information. The staff and board of the exchange, Hammer says, plan to open it in late 2013 so that people can enroll and then be covered effective January 1, 2014.

Follow the exchange board’s work here. Heads up: the board seeks a chief executive officer—applications are due Oct. 15!

Mental Health

“Wildfires Take a Toll on Mental Health,” Rick Ybarra, Hogg Blog (of the Hogg Foundation for Mental Health), September 8. Central Texas, near Austin (where this foundation is located) has suffered through wildfires in recent weeks. (There was apparently one this week, according to the Austin newspaper.) The author writes that a disaster’s effects can lead to “fear, confusion, and uncertainty in daily life.” He mentions some to-be-expected (that is, normal) reactions to fires and other disasters and provides some helpful hints and links for more information.

Quality of Care

“Quality Improvement? It’s All Greek to Me,” Topun Austin, in the Blog of the Health Foundation (London, United Kingdom), September 14. The author writes, ‘Remember quality? We don’t hear much about that these days.” Austin explains why he thinks the three “buzzwords” safety, efficiency, and quality are so important. Acknowledging that there is a global financial crisis now, Austin mentions the danger of cutting already efficient services. He concludes that if you focus on efficiency and safety, then quality of care will improve.

Austin is a neonatologist at Addenbrooke’s Hospital, which, according to its website, is an internationally known teaching hospital (for Cambridge University). Cambridge University Hospitals NHS (National Health Service) Trust runs Addenbrooke’s.

The Health Foundation, a charity, aims to continuously improve the quality of care in the United Kingdom (UK). Read here about the foundation’s current policy work; it seeks to influence the government of the UK’s proposals for reforming the NHS England.

Health Reform: It’s about a Vision for Each State

October 3rd, 2011

GrantWatch Blog asked Kim VanPelt of St. Luke’s Health Initiatives (SLHI) to report on that foundation’s “Keys to Success” forum, held in mid-September in Phoenix, Arizona. The forum’s goal was to discuss the critical issues involved in creating an Arizona health insurance exchange.

A public foundation, SLHI primarily works in Maricopa County (the Phoenix metropolitan area), but it is involved in some statewide work.

Sometimes it is easy to get bogged down in the details of health reform and forget about the “big picture.” St. Luke’s Health Initiative’s (SLHI’s) recent convening of community stakeholders provided an important reminder of a trite yet time-tested lesson: if you want to reach a destination, you need to have a clear vision of where you want to go.

On September 16, SLHI convened more than 120 community leaders and policy experts. We gathered to discuss choices to be made related to whether and how Arizona should implement a health insurance exchange. Presenters included Alan Weil from the National Academy for State Health Policy, as well as speakers from Community Catalyst, Health Management Associates, the Arizona legislature, and the office of Gov. Jan Brewer (R).

Successful exchange implementation would have a profound effect on Arizona’s major health issues of coverage and access to care. It’s projected that one-in-six Arizonans would use it beginning in 2014, so our goal for the meeting was to engage the community more fully in this important dialogue.

For every state, the choice is the same: establish a state-run exchange by 2014, or the federal government will run one for you. Speakers talked about factors that need to be considered when deciding whether a state should run its own exchange. They spoke about critical implementation topics, including governance, structure, and financing of the exchange. They discussed how consumers could be engaged and how adverse selection and conflicts of interest could be avoided.

Viewpoints expressed by speakers and audience members widely varied:

* The governor’s policy adviser described how he and staff are working toward implementation of an Arizona-based (state-run) exchange, but he also said how challenging it will be to implement it on time—especially when guidance from the federal government continues to evolve.

* Several consumer groups expressed frustration about the lack of public input related to establishing an exchange.

* One lawmaker questioned whether state implementation of an exchange would end up costing the state money that it would not have in the long run.

* An emergency room doctor said that more coverage simply meant that an already overrun, understaffed medical system would be severely challenged to keep pace.

Few comments focused on what attendees hoped the exchange would achieve, though.

Remarkably, these comments occurred after NASHP’s Alan Weil noted during his opening remarks that there are a lot of different directions a state can go when implementing an exchange. For a state to be successful at health reform, it needs to determine how the exchange fits into the state’s overall vision for reforming health care.

No such vision exists in our state (and probably in many other states, too). At least, that’s what the comments made in our meeting seem to indicate.

What is our state’s vision for coverage and access to care? For improving the quality of care delivered? For lowering health care costs? If we cannot answer these questions, how can we define what we want from an exchange?

Alan Weil’s observations remind me of related remarks by journalist, author, surgeon, and health reform thinker Atul Gawande. In comments to a small group of foundations shortly after the health reform law was passed, Gawande said that for real health reform to occur, it would take bold experimentation and action at a local level. He noted that the Affordable Care Act of 2010 provides many such opportunities for local action to occur. But it will be up to local communities across the country to make needed changes to our health care system.

Health—like politics—is local.

States need to move forward with reforming our health care system because our current system is simply too broken and the stakes too high to continue with the status quo. Whether a state’s political leaders like the health reform law or not, there should be recognition that it contains many opportunities for local communities to experiment with improving quality, increasing access to care, and lowering costs. If some states choose to ignore those opportunities, they should feel compelled to address these same issues somehow, some way, in their communities.

As funders, we can do a lot to foster reform at a local level. We can provide relevant facts and assistance, such as the information and views of experts shared at our recent forum. We can fund various projects that allow for experimentation or changes in health care delivery. We can support coalitions aimed at building healthier communities or support partnerships that collaborate to keep people with chronic conditions healthy and living in the community.

But another less obvious (and more difficult) role for philanthropy may be in helping states create that vision of what health reform means for communities within a state or for a state as a whole. If we want to be serious at a local level about how we should be reforming our health care system, we really must be clear about where we want to go.

Editor’s notes: Read more about SLHI’s work in the health policy area here.

Read the abstract of a June 2010 Health Affairs article by Alan Weil here.

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