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.
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: www.healthyaffordablefood.org.