The Food Manufacturer Challenge: Adding Value to Unprocessed Foods

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October 8, 2012 by afrazzini

If food manufacturers were required to provide front-of-package nutritional ratings such as those recommended by the Institute of Medicine (IOM), their biggest challenge would be adjusting to the outcome that public health professionals seek: a shift in consumer demand toward less-processed products.

In the blog Food Politics, Marion Nestle has shared lists of products that the IOM’s proposed interpretive Front-of-Package Labeling scheme would promote (plain nonfat yogurt, plain instant oatmeal) and those it would not promote (sweetened yogurt, breakfast bar) (5). A comparison between the two lists reveals that the proposed scheme would generally promote products that have fewer ingredients.

The IOM’s recommendations mimic what many nutritionists have been saying for decades: eat more whole foods (2). Whole (or unprocessed) foods tend to be more nutritious than processed foods because processing usually involves the addition of unhealthy ingredients such as high fructose corn syrup and soy oil. Adding these inexpensive ingredients does not raise production costs very much for the manufacturer (1), but it adds value to the product in terms of total calories and/or taste. Consumers perceive this added value and are willing to pay the same amount or more for a product with lower production costs.

If successful, a labeling scheme that causes consumers to buy fewer highly-processed/high-profit-margin products could ultimately result in lower overall profit for food manufacturers – that is, if the manufacturers didn’t find other ways to add value to products.

But in recent years, many companies have successfully pioneered innovative value-adding strategies: pre-washed and bagged salad, compartmentalized containers of vegetables & dip that transport easily, yogurt that can be squeezed from a tube directly into the mouth. These types of items all appeal to a customer’s desire for convenience, an important consideration for even the most limited-budget consumers (4).

A public health campaign that caused a shift in consumer demand toward less-processed products would simply nudge companies further in the direction of these types of innovations. In the tradition of the capitalist economy, companies with the best ideas and methods for meeting the new customer demands will thrive and grow. It is likely that some companies will fail to adjust, and will lose market share due to the changes in customer demand – large, risk-averse food manufacturers may resist the labeling schemes for this very reason (3). But as a whole, the market will adapt – and this time, it will be for the benefit of the customer’s health.

1)    Barry R. HFCS: A Sweetener Revolution. National Food Review 1982:23:10-13.

2)    Brand J, Nicholson P, Thorburn A, Truswell A. Food processing and the glycemic index. Am J Clin Nutr 1985:42:1192-1196.

3)    Cardello, Hank. Stuffed, Harper Collins, 2009.

4)    Glanz K, Basil M, Maibach E, Goldberg J, Snyder D. Why Americans Eat What They Do: Taste, Nutrition, Cost, Convenience, and Weight Control Concerns as Influences on Food Consumption. JADA 1998:98:1118-1126.

5) Nestle M. “IOM releases tough report on front-of-package labeling.” October 20 2011. Available at http://www.foodpolitics.com/2011/10/iom-releases-tough-report-on-front-of-package-labeling/.

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7 thoughts on “The Food Manufacturer Challenge: Adding Value to Unprocessed Foods

  1. Elizabeth says:

    Interesting points, Ali. Perhaps you’re a little more optimistic about the food industry creating a larger range of healthy, minimally-processed foods than I am. I actually think that all these front-of-pack labels generally benefit processed foods, as they are more “mold-able” to any nutrient level that we as public health professionals might choose to promote.

    The most difficult thing (in my humble opinion) of these labels is trying to decide what nutrient “cut-offs” to create. With almost any limit or threshold that you set, food industry can reformulate a product to meet those specifications. For example, some changes to the National School Lunch Program have led to the reformulation of chocolate milk in schools this year with lower fat and lower sugar content. Food companies can (not always easily) change their ingredient composition to make a product look better.

    Whole foods, however, can’t really change their composition. For example: an avocado is an avocado, and will always be high in fat. While we may know that avocados are a great source of healthy fat, it may “appear” to consumers to be a worse choice than some ultra-processed low-fat granola bar when looking at FOP labels. Therefore, using FOP labels can, in my opinion, often steer consumer to highly-processed foods that “look good” with their numbers.

    As long as we continue to focus on and educate about nutrients, rather than foods, I don’t see how FOP will really ever make processed foods look terrible.

    • afrazzini says:

      Thanks for your input, Elizabeth! We agree more than it may seem. In trying to make my post concise, I implied that I was sure FOP labeling would work in the way that the IOM seeks. Rather, what I was trying to convey was that IF it worked in the desired way, the industry’s biggest POTENTIAL challenge would be to basically change how they make a profit.

      This potential challenge seems to be why industry is fighting interpretive FOP labeling schemes so hard – companies would rather have fact-based FOP schemes that allow them to continue producing fortified sugar snacks and obscuring the fact that those snacks aren’t any healthier than candy.

      I do think that, out of all the potential types of FOP labeling, interpretive labels like the IOM scheme or a traffic light scheme are most likely to nudge the public in the direction of seeking unprocessed foods. In contrast, a labeling system like “Facts Up Front,” which requires the consumers to examine nutrients and make their own interpretations, is inherently more nutrient-focused and less food-focused. Furthermore, “Facts Up Front” requires quantitative literacy and nutrition knowledge for a consumer to make even the most basic of interpretations. But of course, interpretive labels face a HUGE challenge to reduce complex nutritional guidelines that should really only be interpreted in terms of an overall diet to a simple message like “go, slow, or whoa.”

      In creating schemes that have such reductive messages, public health professional have to recognize that their guidelines will never be perfect for everyone. But I think that the best way to deal with that is to look at what the population, as a whole, tends to eat too much or too little of. The IOM labeling scheme does a good job of that by, for example, recommending unsweetened items over items with sugar. Of course, there is potential for problems with this: we could see a huge increase in use of artificial sweeteners or a shift from use of saturated fats to chemical moisteners. It’s a definite risk, and I’m glad I don’t have to make the decision about whether or not to take it. It makes me wonder if it would be feasible to create a labeling scheme that took into account the level of processing of a food. Marion Nestle always says to eat foods with no more than 5 or 6 ingredients – could that be incorporated into a rating system?

      • Elizabeth says:

        Haha… the more you think about how to create the perfect labeling system, the harder and harder it gets. I have worked with numerous schools to implement the Go, Slow, Whoa system, and I had to label every item in their cafeteria by one of those 3 categories. Not an easy task. I combined the nutrient approach and the whole foods approach, but any rigid set of rules always ends up with foods in certain categories that you don’t like.
        The ingredient idea is interesting (limiting a “healthy” choice to no more than 5-6 ingredients), but the food science part of me always defends ingredients. After all, what about dishes / prepared foods that are made with lots of ingredients? They could be all healthy ingredients that, on their own, we would approve of. So anyway… it’s a complicated matter. My personal experience says that I don’t like being the one to decide these matters!

  2. brooksy says:

    Hey Ali,
    I really like the way you framed your argument. I think you brought up interesting points about what manufacturers have already done to promote healthy foods, and it does seem like a strategy like promoting foods with 5 or 6 ingredients would be something that would be realistic to implement and would also sway manufacturers to produce healthier foods.

    It’s interesting that consumers perceive value in lower-cost and often ‘tastier’ items, but wind up on an expensive fad diet that is much more expensive and often unsuccessful in helping achieve weight loss. Wouldn’t it be great if people valued healthier foods, and the industry (both manufacturers and businesses) made it easier and more economical for people to make those healthy choices?

    I’m optimistic about change, but a lot needs to happen and I think FOP labeling is a step in the right direction!

  3. kevintmiller says:

    The cynic in me wanted to immediately argue that FOP labeling, if we were to get a single standard that is required for all processed foods sold in all stores, would have very little effect on the food industry or on health. Remember how much of the food industry is controlled by a very few corporations. Now let’s imagine that one of those corporations sees the potential for loss due to FOP labeling. I think it would be easy enough for a large corporation to adjust formulations in a couple of its different brands that compete for the consumer’s attention on the shelves so that the corporation overall is not hurt. So, my initial thinking was that there is no way that corporations will allow FOP labeling to hurt them financially. But then I thought that it is possible that the FOP labeling could indeed shift consumer demand so that the foods that sell best are those that may actually be healthier for us. I thought about the fast food industry and did a small amount of research on the business side of things to see if I could find something that hinted at how the hit that fast food has taken over how unhealthy its food is actually affected individual corporations. I was surprised and hopeful after finding this article:

    http://www.entrepreneur.com/article/60710

    In it, Entrepreneur.com outlines how a consumer demand for healthier options has helped Subway open more franchises and gain more market control while the control of McDonald’s is slipping. As I read it, I thought that perhaps my cynicism is wrong – that customer demand for healthy foods can indeed mean that offerings can change and that some of the big corporations that, I feel, have us in a strangle-hold, can fail. Then I noticed the date on the article – 2003. Subway has not taken over the world – though it has more of the market share, I would say that Subway has recently de-emphasized how healthy its sandwiches are compared to burgers in favor of other marketing techniques that are most effective right now. And while it is true that McDonald’s has included on its menu some lower calorie options and alternatives to fries for kids meals, a gander at their sandwich menu (http://www.mcdonalds.com/us/en/food/full_menu/sandwiches.html) shows how little things have changed since 2003. So, I suppose the cynic is back.

    I do have hope that efforts like FOP labeling can make consumers more aware of the health of products and can perhaps influence choices, perhaps leading to better health. However, I think for any real change there must be consistent and sustained consumer demand for foods or formulations that are truly healthier for us than the alternatives (which are those, exactly?). If we, as a society, could make up our minds about exactly what we want to eat, the food industry will give it to us. Until then, corporations will ride the waves of efforts like FOP labeling, use the attention to actually sell more products (like whole-grain Froot Loops), and once we forget, they’ll go back to making as much money as possible. We can only hope that our fleeting demand for healthy food will have forced the corporations to discover a formulation that not only makes us healthier but increases profit margins, too. Then, I think we’ll see some real change.

  4. eldavies3 says:

    Ali – what a fascinating topic! I’m a little bashful to admit that I hadn’t heard much about front-of-package nutrition labeling until fairly recently, but it seems to be an idea that is gaining momentum. I agree with your ambivalent thoughts about FOP labeling; on one hand, they seem to have potential to shift consumer preference for healthier, less processed foods. On the other hand, reductive labeling categories could merely cause food corporations to tweak their ingredients in order to make food appear healthier than it is. I think one way to address this issue might be to launch a simultaneous educational campaign. For instance, PSAs, billboards, etc. could be used to help the public understand how to interpret the labels. Doing so may encourage consumers to take full advantage of the labels instead of ignoring them, as probably happens with certain FOP labeling now. Furthermore, if the corporations themselves feel that the public is really using the labels, they might be less likely to manipulate ingredients within unhealthy products and, instead, just start producing healthier ones.
    You mentioned another way to address the issue in your discussion with Elizabeth S. — using more descriptive labels that focus on the overall nutritional quality of the product rather than values of specific nutrients. I love Mark Bittman’s concept of “foodness.” I also like how his proposed labels combine a more complex scoring system with an easier-to-digest color-coding system; combined they can reach a wide audience of consumers with different priorities. Moreover, in order to score high in each of the different categories, food corporations really would need to effect changes in the humaneness of their production and use whole foods as ingredients. No matter which option we choose, or whether another one altogether is used, I think the concept of FOP labeling will probably take hold.

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