1. DECEMBER 2013 Page 14How Fat is Your State? Page 17Taxes and Government Fighting Against the Bulge Page 23Snacks: How Small Portions are Making a Big Bite in ObesityTHINKINGBIG Chipping away at obesity means breaking down industrys plan into small bites

2. December 2013CONTENTS3 4 12 14 1719Viewpoint23How to Feed the New American25Whats Happening in Weight Management?Addressing Obesity Through Food CultureSnacks: Its all About BalanceReshaping Obesity with Industrys CEOsHow Industry Can Help the Nation ThriveBattle Bulge with Taxes, GovernmentFood Product Design | BRJ BOARDROOM JOURNALTwitter hashtag: #THEBRJ2theboardroomjournal.com 3. ViewpointObesity: Enough Problems to Go AroundWhile obesity has been called a disease and an epidemic, its becoming more obvious that it will take a multi-factorial effort to address the challenge of the overweight around the globe. And just as no one wakes up one morning 100 pounds overweightit happens incrementally, day by day and year by yearthere is no magic solution that will suddenly stem the tide.Thinkers from industry, academia, government, consumer interest groups and more must come to the table, offering their perspective, asking what the possibilities are for collaboration, and actively reaching out to develop strategic roadmaps that support business growth but not further waistline growth.Its not just telling people they need to take more personal responsibility, nor pointing ngers at the companies that are supplying tasty foods that meet consumer demand. Instead, thinkers from industry, academia, government, consumer interest groups and more must come to the table, offering their perspective, asking what the possibilities are for collaboration, and actively reaching out to develop strategic roadmaps that support business growth but not waistline growth. Innovation throughout the food supply chain will be needed to ultimately meet consumers nutritional and sensory needs, while helping them get and stay physically well now and in the future. In this issue of The Boardroom Journal, were exploring the obesity conundrum, from a broad overview into more specic examples of what the future might bring. Whether youre seeking consumer trend data, insights on regulatory and legislative challenges, or getting the latest on initiatives that bode well for change, youll nd information that we hope will provide fodder for your own C-suite discussions around the conference table. As always, were also hoping to hear from you. If youve got a story to share on how your company is addressing the obesity situation, feel free to reach out. In addition, our 2014 editorial plan will delve into topics such as global nutrition/malnutrition, and ingredients and the activist consumer (an issue garnering a ton of press as of late); we hope youll share your perspective in our discussions. Best regards,Heather Granato VP Content, Health & Nutrition Network hgranato@vpico.com @heathergranatoFood Product Design | BRJ BOARDROOM JOURNAL3theboardroomjournal.com 4. Howindustry is thinking bigger than Americas waistlines to Feed the New American: Why the BY ALISSA MARRAPODIWith more than one-third of U.S. adults weighing in as obese, children in tow (17 percent of kids, to be exact), Americas cup is running over. At this point, it doesnt matter whether youre a social activist, a lobbyist, a consumer, a health care practitioner or a food manufacturer, obesity is affecting you. Its no longer a muted condition that aficts only a small amount of the population; it is everywhere. Naturally, issues such as these cause quite the debate as everyone scrambles to gure out who opened Pandoras box. But above all the noise and soapboxes there are tangible moves being made to halt obesitys rampant path.The rst McDonald's in 1954. Source: AP/Wide World PhotosFood Product Design | BRJ BOARDROOM JOURNALHISTORY 101 In 1952 only 10 percent of the U.S. population was obese. During this time period obesity was viewed as a problem of personal responsibility, according to researcher Helen Lee, author of the report The Making of the Obesity Epidemic: How Food Activism Led Public Health Astray and senior research associate at MDRC. Whats also interesting to note is in 1952 there was one lone McDonalds. Over the next 30 years, the quick service restaurant (QSR) would expand to close to 8,000 restaurants while the obesity rate only increased by 5 percent. After 1980, however, obesity rates climbed dramatically, topping off in 2013 with 35.7 percent of the U.S. population as obese, according to the Centers for Disease Control and Prevention (CDC). There are a lot of factors that might explain the marked increases in obesity rates post 1980, Lee said. Although no one seems to completely agree on which factors were most important, most researchers can agree that there is no singular causegreater food availability and diversity (this includes both more products and more outlets) at a relatively inexpensive rate; greater food production at low cost, in turn, was made possible by technological efciencies in food production and transportation; labor market shifts moved4jobs away from manufacturing toward more ofce-based, sedentary work; women entered the labor force in greater numbers, changing the dynamics and costs (both in terms of labor (time) and money) of food purchasing and consumption in the home; and TVs, computers and video games all became more accessible (more people can own at least one of these things) and time spent engaged in such sedentary activities has increased over time. As obesity rates rose over the next 30 years, the fault lines began to shift away from personal responsibility into the hands of the food industry, and to environmental, societal and behavioral factors. Obesity became classied as a disease and widely called an epidemic. Lees report details how anti-obesity campaigns were modeled after antismoking campaigns, and this caused the transformation of obesity from a condition resulting largely from issues at the individual level, whether ignorance or personal-discipline or socioemotional factors, to an epidemic attributable to corporate malfeasance. Lee said the public health profession, in trying to dub obesity as the new tobacco, was searching for a Joe Camel equivalent. Vendors that specialize in high-fat, low-nutrient foods were the easiest parallel, she said. Some popular non-ction pieces highlighting the way the fast food industry works, like Fast Food Nation, tried to drive this message home, and stories about how food manufacturers test and market foods to please the palate rst and foremost (alongside increasing calories, fat and sugar) were attempting to show how, like cigarette manufacturers, the producers knowingly tweaked their products to be more addictive. This is not to say that food manufacturers dont test and manufacture foods to hit biological bliss points, Lee continued, but the parallel runs into some problems because we all have to eat (we dont have to smoke), andtheboardroomjournal.com 5. the line between good and bad foods is very subjective. There was never an easy way to translate the parallel into a reasonable policy action. And while anti-tobacco movement saw success in terms of downward shifts in smoking prevalence, the gains were really from people who were more educated and wealthier.A millionaire may enjoy breakfasting off orange juice and Ryvita biscuits; an unemployed man does not When you are unemployed you dont want to eat dull wholesome food. You want to eat something a little tasty. There is always some cheap pleasant thing to tempt you. George Orwell, The Road to Wigan PierFood Product Design | BRJ BOARDROOM JOURNALTHE ENVIRONMENTAL FACTOR According to the CDC, behavior and the environment are the second cause of obesity and overweight, and they are the greatest areas for prevention and treatment actions. Public health experts, social justice activists, scholars and more point to food environments for the rising obesity rates. According to the Dietary Guidelines for Americans 2010, Ultimately, individuals choose the type and amount of food they eat and how physically active they are. However, choices are often limited by what is available in a persons environment, including stores, restaurants, schools and worksites. Environment affects both sides of the calorie balance equationit can promote over-consumption of calories and discourage physical activity and calorie expenditure. Studies examining the relationship between the food environment and BMI have found that communities with a larger number of fast food or quick-service restaurants tend to have higher BMIs. As the charge against obesity was mimicking the charge against cigarettes, the overweight consumer took on a new look: the innocent child or the low-income city-dweller. Children are seen as particularly vulnerable victims because they dont have the purchasing and decisionmaking autonomy of adults, Lee explained. They eat, especially in the early years, what their parents feed them; they live sedentary lifestyles if their parents allow that. That resonates strongly with the rationale for policy and public-health intervention because their risk is so dependent on the decisions of others (their parents or caretakers). A low-income city dweller is stuck in a community that lacks resources of all kinds, but in the obesity world, whats particularly egregious is that the low-income city dweller is only surrounded by convenience stores and5fast-food outlets, and cannot physically access a healthier food store like a grocery store, because grocery stores do not develop or shut down in inner-city neighborhoods. While Lees research found children living in lower-income areas do have more access to fast foods and convenience stores, they equally have access (and at times greater access) to healthy options via major grocery store chains. I also found that over the course of elementary school (kindergarten to grade 5), differences in residential neighborhood food availability does not matter for predicting which children will become heavier over time, she said. In fact, others argue the gap in obesity rates between the classes predates the pervasive industrial food industry. While there are many conversations of all types happening around obesityfrom movies and books by famous writers, chefs, journalists and lmmakers pointing ngers at processed and fast foods (whose many dishes amount to the same if not more of fat, sugar and calories) to social advocates pushing for better food accessibility and better food environments (which is a need not to be overlooked)the food industry does have a responsibility to consumers: to give them the tools they need to live a healthy lifestyle. Whether consumers use those tools or like the way they taste (which Ill get to in a minute) is for a different article. So while consumers struggle to nd a balance between eating healthy vs. eating indulgently, and lounging vs. exerting, the industry is attempting to nd its own balance, which is why many companies are turning to a tiered approach that enables consumers to choose among a portfolio of products that come in different sizes, different calorie counts, etc., with clearly labeled nutrient information. Consumers around the world are fundamentally changing: they have different lifestyles and needs and health issues; they have different health infrastructures in the countries they live in, said Darren Marshall, vice president of venturing and emerging brands, Coca-Cola. And at the end of the day, the number one conversation that happens within our company is how do we meet consumer needs better tomorrow than we did today. And as health concerns become more prevalent, it becomestheboardroomjournal.com 6. much more of a question around how can we offer choice to meet all of the unique needs that consumers have. Life is more complex every day and therefore we need to make sure we have the right of portfolio products to be able to address those more complex needs. Coca-Cola partnered up with the Drink Up campaign, powered by the Partnership for a Healthier America; this to-the-point campaign encourages consumers to drink more water, essentially eliminating sugar and calories entirely. Through this effort, Coke is not only promoting its water products, but it has adopted four principles that focus on offering low- or no-calorie options in every market, according to Brian W. Davis, senior project manager for consumer packaged goods and restaurants, The New England Consulting Group. 1. Offer consumers transparent nutrition info: calories on the front label so caloric intake is identifiable for both parents and consumers 2. Get people moving: providing sponsorship and support for activity programs for children that promote physical activity 3. Market responsibility: wont advertise to children under 12 anywhere in the world 4. Highlighting the nutritional benets as well as sugar and calories for its productsCoca-Cola has reduced its package sizing, introduced various can sizes to promote portion control, and has commercials and ads encouraging people to become active, Davis said. New product development is also a key part of the companys strategy. In Argentina, Coca-Cola launched its rst stevia-sweetened Coke productCoca-Cola Lifedelivering a mid-calorie beverage made with a hybrid of both sugar and stevia. This launch followed the companys introduction of its zero-calorie, stevia-based sweetener to Sprite in the U.K., boasting a 30-percent sugar reduction by subbing in stevia for some of its current sugar content, further diversifying the companys portfolio. Marshall said using stevia is just another way the company is trying to give consumers what they want in the right situation. The broader piece is there is a need for the trifecta of a taste component, a calorie component and a natural component, and how do you manage the complexities of each of those. What stevia allows people to do is get a lower-calorie natural solution. In a similar effort, The New England Consulting Group said PepsiCo also partnered with the Drink Up campaign and has split its offerings into three segments: good for you, better for you (water, Gatorade)and fun for you (Pepsi Cola). So there are healthier options in their portfolios, while also displaying total calories on the front packaging, Davis added. Coca-Cola has partnered up with several innovative companies in order to develop new propositions to the world, one of those brands being Honest, which works in the tea, kid-juice and sparkling beverage spaces. [Honest] is all about new health-oriented lifestyles with products that are always less than 100 calories per serving, are largely organic and are signicantly less sweet than anything else in the marketplace, Marshall said. Its about working with new categories like coconut waterour ZICO brandand nding new, natural ways to hydrate people for the active lifestyles they lead. It is not a substitute for other brands in our portfolio but its certainly a new space that gets us into great taste, lower calories and more natural solutions. Marshall said the beverage company is moving into the dairy space with the launch a new brand called Core Power, a natural milk product with no additives, powders or chemicals, and made from happy, healthy cows. Those are the spaces were pushing into to be able to look at new ways of thinking about things, he said. Coke is much larger than the cola beverages that have beenWhats Sodium Got to Do With It? Sodium reduction has been the most pervasive move in both food and food service companies such as Kraft, Heinz, Campbell and Subway, said Brian W. Davis, senior project manager for consumer packaged goods and restaurants, The New England Consulting Group. But what does this sodium have to do with obesity? It has no calories and it has no direct effect on weight, and its mainly associated with heart health. However, since excess sodium leads to increase water retention, the industry is using it as a weight-reducing marker. Subway: 15-percent sodium reduction in all its lunch and dinner subs McDonald's: reduced its average sodium content by more than 10 percent Mondelz International: reduced sodium in Teddy Grahams by 25 percent, reduced sodium by 10 percent across its North American portfolio Taco Bell: Cut 20 percent of the sodium from its menu across the board Pizza Hut U.S.: Removed more than half a million pounds of salt from its menu with plans for more Food Product Design | BRJ BOARDROOM JOURNAL6theboardroomjournal.com 7. around for more than 127 years. Were pushing boundaries not just in sweeteners but in new products and territories and organic farming that you might now consider. However, breaking into the healthier market is a complex and often trepidatious step that comes with reservations for many companies. You dont want to cannibalize your existing business, Davis said. So if youre in the market of high-caloric products and youre looking to introduce healthier options you dont want to hurt your existing business by saying your current options arent good. The other issue is overcoming some of the current stigmas that come along with that change, so if I move to a healthier option will people assume it doesnt taste good. If I launch a grilled turkey burger will people expect it to taste as good as my traditional burgers? Fast food companies have been walking the line in this area. McDonalds recently added side salads, fruit and vegetables to its value menus, and its Happy Meal drink options now include water and juice, too. It also launched its Egg White Delight McMufn with 50 fewer calories than the traditional Egg McMufn. Burger King introduced SATISFRIES with 40-percent less fat and 30-percent less calories than the normal French fries with a total of 190 calories and 8 g of fat for a value size serving. Carls Jr. introduced its charbroiled Atlantic cod sh sandwich served on a honey wheat bun alongside its charbroiled chicken options, and KFC now offers grilled chicken in addition to its crispy classics.number people are looking for, Davis pointed out. Its promoting products in moderation heres a 100-calorie pack of cookiessame quality product with a smaller package. But as stated earlier, the industry can produce the most healthful and balanced meals, but if they dont taste good (and if they dont look and feel and smell familiar), they wont make a darn bit of difference. The Healthy Food Project, among other organizations, believes there are unutilized technologies that will improve the healthful aspects of processed foods. Its dedicated to: making the processed foods we eat and depend upon healthier, while maintaining the familiar characteristics in the foods we enjoy. Why? Because consumers like the food they are eating now. And, as David H. Freeman said in his article for The AtlanticThe Cure for Obesity: How Science is Engineering Healthy Junk FoodIts not exactly a scientic study, but we really shouldnt need one to recognize that people arent going to change their ingrained, neurobiologically supercharged junk-eating habits just because someone dangles vegetables in front of them, farm-fresh or otherwise. THE TASTE TEST No question about it, without great taste, nothing else really matters, says Alyssa Turner, associate product specialist, Ingredion. And shes right. By now everyone is familiar with the bliss point, a concept put forth by Howard Moskowitz, Ph.D., that refers to the point at which the palate meets its match andEven when accounting for the role income plays in obesity, the poor choose their foods not mainly for their cheap prices and nutritional values, but for how good they taste. Abhijit V. Banerjee and Esther Duo, Poor Economics Davis added creating a varied portfolio of options isnt just about introducing healthier version or new good-for-you products, sometimes its about determining what consumers really will buy. [Its about] nding that magic number that gets you to the caloricFood Product Design | BRJ BOARDROOM JOURNAL7becomes insatiable. For years, the industry has been banking on taste, not nutrition, so the paradigm shift that is happening will take time to settle in. Taste is the number one factor when you ask people why they eat what they eat, why theytheboardroomjournal.com 8. Car companies say that the key to greater safety on the road is changes in driver behavior. Similarly, food companies say that it is parents responsibility to control what children eat. All companies feel they should not be blamed if some people abuse their products. These are tough arguments to counter. After all, each one is truthfulif incomplete. Dorfman and WallackFood Product Design | BRJ BOARDROOM JOURNALbuy what they buy, Lee said. So one strategy for the food industry is to make healthy choices taste really good, and for individuals to learn to enjoy and value the taste of the healthier option (train their palate). As Davis pointed out, on-the-go food chains are trying to offer healthier foods, but taste is the trick. QSR guys migrate consumers toward tasty but healthyswap out fries for a salad once in a while; most QSRs have introduced salad alternatives, he said. Ten or 15 years ago you wouldnt have found a salad on a QSR menu. Consumers tend to associate healthy and good-for-you with foul tastes rather than a lower calorie count, so more recently theres been an advertising shift to great-tasting instead of healthy. When a QSR adds a healthier option to its menu, it isnt talking about reduced calories or baked vs. fried or lean vs. fatty; instead it focuses on deliciousness. We know our consumers wont compromise on taste, and we wont either, said Sarah Delea, director of health & wellness, Mondelz International. Thats why we look to improve the nutrition without taking away what our consumers love about our products: the taste. We look to reduce sodium and saturated fat, while increasing whole-grains. Ingredient suppliers are aware of the taste factor and its make-or-break effect. Great minds converge in our Tarrytown kitchen where we collaborate with customers to create new products or improve existing ones, said John Gehbauer, business manager, food, BASF Nutrition & Health, North America. Sometimes we present new ideas and solutions based on market opportunities and often we create product samples specically tailored for a customers target audience. As our conversations may vary from one customer to another, one topic is always constant: taste trumps all. Regardless of the need or opportunity, if the product doesnt meet a consumers sensory test, namely taste and texture, it wont succeed. Flavor perception is a game changer when it comes to tastewhen you reduce/remove sugar and fat from a product, it allows the palate to taste bitterness or other unpleasant avors. Trumping these unpleasant avors is a balancing8act among senses. As avors can be perceived olfactively, so creating a sensation of a particular taste through scent is one way to create balance; another way is via texturegiving diet sodas or low-fat foods the same texture as their full-avored counterparts gives consumers the perception of taste, although what they are tasting is texture and functions as the timing belt, knowing when to release avor. The solutions we are able to provide to meet any number of specic nutrition goals (reduced sugar, fat/oil, calorie and/or glycemic response) are built rst upon a holistic understanding of the desired goal for any particular project, Turner said. Solid technical understanding of sweeteners and texturizers, a wide toolbox of ingredients, as well as solid expertise in their interaction with other components and process conditions provide the background needed to support a good solution. A highly skilled culinology team along with an extensive sensory program ensures that all aspects of great-taste will be on target. And if anyone knows how much taste matters, its children. No Kiding According to the Dietary Guidelines for Americans 2010, approximately one-third of adolescents are overweight or obese, which increases their risk of becoming overweight or obese adults, which has also upped this age groups prevalence of type 2 diabetes, atherosclerosis, dyslipidemia and hypertension. The NHANES 2005-2006 said the top sources of calories consumed by children and adolescents (ages 2 to 18) are: grain-based desserts, pizza, soda/energy drinks/sports drinks, and yeast breadsall of which, except pizza, are nutrientpoor food choices highlighting a largely overfed, yet inadequately nourished population. Childhood obesity is a shared responsibility between parents and the industry. Certainly, students should be taught to make healthful choices and take individual responsibility to do so, explained Lori Dorfman and Larry Wallack in a 2004 paper, Moving Nutrition Upstream: The Case for Reframing Obesity. Students do not determine what is made available to them in the vending machines in their school just as studentstheboardroomjournal.com 9. The New School Lunch?are not responsible for the food available in the cafeteria or snack bar. It is the adults who are responsible for ensuring that schools are doing right by the children in their care. Whats interesting to note is the growing evidence that things like self-control, character and emotional self-regulation can be taught. Lee highlighted one idea in her reportmarshmallow experimentsthat tested childrens ability to self-regulate and delay gratication. Researcher brings kid into a room, puts a marshmallow in front of him and tells him that he can have the marshmallow, but if the kid waits 15 minutes, then the researchers will return with another, Lee explains. It turns out children who were able to wait and delay their gratication of the marshmallows did better on some later life outcomes (problem behavior, drug addictions, obesity, schooling, etc.). There is a lot of industry movement around childhood obesity. The school cafeteria is a battleground for empty calories, too much sugar and more. According to Trust for Americas Health, 50 percent of a childs daily calories are consumed at school. In 2011, 12.5 million children ate breakfast at school and 31 million ate lunch at school. The chicken processor and marketer, Tyson Foods, teamed up with the Alliance for a HealthierTECHNOLOGY TASTES GOOD New technologies and ingredients are enabling the industry to create better-for-youSource: Getty ImagesFood Product Design | BRJ BOARDROOM JOURNALGeneration to help ght childhood obesity by introducing more whole-grains and grilled options to its chicken for school lunches, in addition to salt reductions, Davis noted. The food service company Aramark partnered with more than 500 schools to introduce more whole-grain options to school lunches with a focus on removing rened grains and promoting the benets of whole-grains with posters and signs about eating healthy. The company is now serving up whole-grain pancakes and chicken nuggets, and promoting food with less fat, salt and sugar. We dont have any concrete gures or data but from what weve seen working with projects like this, and what we have seen in the market is additions like this have received positive feedback, Davis said. Schools are starting to promote vegetable, fruits and fresh options, offering salad bars, foods with less fat, salt and sugar, etc. Cargill is also focusing its efforts on childhood obesity via its Childhood Nutrition initiative to proactively share its resources and know-how with its customers who manufacture food and beverages, particularly those heavily consumed by kids. We created our Childhood Nutrition initiative because at Cargill, we believe there are many stakeholders that must be involved in improving kids nutritiongovernment, public health organizations, families and the food industry, said Laura Daly, childhood nutrition marketing manager, Cargill. Cargill is focusing resources to help customers develop formulations with less trans and saturated fat, sugar and sodium, and more whole-grains and functional ingredients like ber and protein. The companys applications and sensory scientists have developed many snack prototypessuch as peanut butter chocolate protein bars and sausage pizza poppers made with whole-grainsusing its ingredients to demonstrate how they can be used in greattasting foods and beverages that kids not only like, but that meet parents expectations and the various nutritional guidelines that have been established for kids.9theboardroomjournal.com 10. Supply Side On the back end, suppliers and manufacturers are constructing swap-out ingredients and solutions for fats, sugars and more, and clean-label options. As a result, food and beverage brands can create more nutritious proles that are both functional and sensory-pleasing. In the bakery aisle, fruit-based pastes are reducing sugar, fat and calories, and boosting the natural composition and functional properties of industrial baked goods, all while maintaining taste proles. For consumers who want their low-sugar juice with a fullavor taste, many companies are working in the juice space, developing systems to remove sugar from juice without sacricing mouthfeel or taste. For those quickly digested processed foods, ber-rich starches derived from natural sources such as tapioca are helping the body digest processed foods slower to induce satiety. Meat substitutes have found their way into the marketplace but now R&D is enabling a way for companies to reduce fat in processed meat patties while still enticing those burger lovers.Food Product Design | BRJ BOARDROOM JOURNALfoods across all food and beverage aislesfrom reducing oil content, which in turn reduces calories, in French fries through infrared heat (Agricultural Research; July 2013) to replacing some or all of a trouble ingredient and replacing it a healthier one. And, as Lila Mostefa, senior manager, food & beverage, product development and applications, Stratum Nutrition, pointed out: While obesity is likely the underlying epidemic that customers are trying to address, it is not the topic of conversation. Rather, each food company has a different way that they prefer to address the issue. Whether to lower calories, fat content or sugar; or develop smaller portion sizes; or more whole-foods and less preservatives/additiveseach in their own right we agree contribute. We look at top regional baked goods and work with recipe variations in our food lab to not only address the resulting nutrition facts, but to also evaluate taste, texture, freshness and other organoleptic characteristics. Again, this is a multi-tiered approach with several moving parts factoring into a companys decision to reformulate or create a healthier-focused product. Coca-Colas motivation to use stevia was driven by many factors. There are different motivations in different businesses with different consumer groups in different areas, Marshall explained. It really depends on the specic situations that you might encounter. That said, there are consumer wants in a variety of different spaces. The idea around managing calorie intake and managing a natural solutionsome people are more concerned about other alternatives while others are more concerned about not having genetically modied parts within their diet, and some people just want taste no matter what. So its really about using the solutions that are visible for10the right proposition at the right time. The challenge with using stevia, Marshall said, is its an early technology that hasnt evolved yet to the point where it tastes like sugar in all types of beverage environments. It may work well in citrus and may work less well in cola. Everything is moving as you would expect humanity and science and technology to move, but it never seems to move fast enough. Mostefa said Stratum knows how much consumers dont want to dramatically changes their diets, but want rather that quick-and-easy solution to eat better without having to spend too much time on understanding labeling, she said. THE PROGRESSIVE FACTOR There are many moving parts inside the ght against obesity ensuring greater food accessibility to all consumers and creating better food environments, revamping school lunches and snack offerings, educating consumers and promoting movement and healthy food choices, engineering better-for-you foods and beverages and the industry is beeng up its efforts to not only offer consumers more mindful options, but to give them options. Worldwide we have more than 5,000 products under our portfolioits not a singular approach, Marshall said. The single biggest conversation is how to serve consumers needs better every day. Our goal isnt just to sell you one cola beverage; its to be able to give you the right beverages throughout your day no matter what your needs might beto be a relevant part of every consumer throughout their entire day. Alissa Marrapodi is the managing editor of The Boardroom Journal.theboardroomjournal.com 11. DocumentaryInnovation & Investment in China Companies around the globe are making increasing investments in infrastructure, quality control, regulatory compliance, technology and more, which is driving product development and raising the quality bar. Watch this 20-minute installment of the SupplySide Global Experience Documentary film series, Innovation & Investment in China, to explore several suppliers in China, their ingredient production technologies, quality control measures, supply chain controls, intellectual property portfolios and laboratory testing capabilities to see how best-in-class companies are setting the bar for ingredient sourcing from China.Underwritten byWatch NowFood Product Design | BRJ BOARDROOM JOURNAL11theboardroomjournal.com 12. Whats Happening inWeight Management? BY SIMONE BAROKEGlobal business intelligence provider highlights some of the most salient global trends in weight management, featuring the continued popularity of better-better-foryou products, including stevia beverages, ber and the hottest trend of them all: high protein.When consumers embark on a diet, they have to cut down on something, and this usually means curbing their intake of calorie-dense foods, i.e., those high in fat and sugar.Food Product Design | BRJ BOARDROOM JOURNALBetter-for-You Products Still Important The concern over the obesity epidemic is not new and with it comes a number of health concerns for consumers such as type 2 diabetes, digestive disorders, arthritis, cardiovascular disease (CVD) and even cancer. According to Euromonitor Internationals latest health and wellness data, sales of weight managementpositioned food and drink products is estimated to reach US$151 billion in 2013. The United States, the United Kingdom and Germany ranked as the top three markets for these products in 2013. In the United States, for one, obesity has emerged as the single greatest public health concern over the past decade. Between 2002 and 2012, the percentage of adults classied as obese (BMI 30kg/sq m or more) rose from 26 percent to nearly 40 percent; in 1980, it was just 14 percent. The causes of obesity are multifactorial, and poor diets and increasingly sedentary lifestyles have contributed signicantly to expanding waistlines; however, governments and food and drink players across the world are becoming more active in marketing better-for-you (BFY) food and drink products in a bid to promote consumer awareness and put the brakes on the conditions growing prevalence. When consumers embark on a diet, they have to cut down on something, and this usually means curbing their intake of calorie-dense foods, i.e., those high in fat and sugar. Our statistics show BFY reduced-fat and -sugar food and beverage value sales combined amounted to US$150 billion globally in 2013, up from US$142 billion in 2008. Reduced-fat packaged food accounted for nearly 60 percent12of the total, but all categories demonstrated steady and moderate value growth (except for reduced-fat beverages, which is a small category of very limited scope) over the 2008 to 2013 review period. Even in the United States, a mature (and hence less dynamic) market for BFY products, encouraging growth spurts continue to be seen. For instance, reduced-sugar liquid concentrates stood out with an impressive 53 percent value gain over 2010 to 2013, since the launch of Kraft Foods Groups Mio. Stevia Drives BFY Sugary drinks, in particular, are routinely being blamed as a major contributor to the global obesity epidemic. From a commonsense point of view, the logic behind the accusation is compelling: one liter of a standard cola carbonate contains 420 kcal, all from sugar. The consumption of eight liters of cola (or any other standard carbonate beverage) per week, which is not an unrealistic quantity by any means, amounts to the caloric equivalent of one pound of body fat. So, it is quite easy to see how substituting standard carbonates with low-calorie alternatives might make quite a signicant difference to a persons body weight in the medium-to-long term. However, it is the growing fashion for lessconventional slimming solutions that has seen companies continue to innovate in reducedsugar food and beverages sweetened with natural high-intensity sweeteners: stevia and the more niche monk fruit. The juice sector is where stevia rst came into its own. The naturally healthy aspect of juice is a major point of attraction, particularly for 100 percent juice, but its high sugar has made health-conscious consumers wary of the category. Products with less than 100 percent juice tend to either have added sugar or articial sweeteners, which is in direct conict with the natural image, giving health-conscious consumers yet another reason to avoid juice.theboardroomjournal.com 13. Stevia, however, allows manufacturers to reduce the sugar (and thereby calorie) content without sacricing either sweetness or naturalness, and even allows organic lowsugar varieties to emerge. PepsiCo is one of the global soft drink companies that has struck gold with stevia. Its Tropicana Trop50 brand, a blend of juice and water and sweetened with stevia, has been extremely successful in the United States since its launch in 2009. In less than three years, Trop50 value sales reached US$149 million, claiming 10 percent share of off-trade volumes in the nectars (25 to 99 percent juice) category in 2012. The company considers Trop50 to be one of the most successful new product launches over ve years, and it is easy to see how a reduced-calorie, all-natural fruit juice lls a previously gaping niche. For consumers wanting keep their calorie intake in check while still enjoying a nice glass of natural juice with their breakfast, products like Trop50 offer the perfect solution. In this regard, monk fruit extract, by virtue of being derived from a fruit, offers even greater potential. Once this highly promising sweetener manages to overcome the few existing teething problems, low-calorie soft drinks, and in particular the juice category, are set to enjoy another serious boost in popularity. High Fiber Lends New Angle to Weight Management Fiber is also another ingredient gaining ground in the weight-management space. Glucomannan was the only ingredient pertaining to weight management that gained a European Union (EU) Article 13.1 General Health Claim. The ber is used in the Slim Noodles product in the U.K., which claim to only contain 7 kcal/100g and help you lose weight. The Coca-Cola Company (TCCC) could be the next player to utilize the benets of ber. In March 2013, the companys patent application with the U.S. Patent & Trademark Ofce for a low-calorie, sugar-free beverage concentrate with ber was published. TCCC has since stated this innovation had been purposely created to turn Fanta Slurpee Lite Mango into reality. This product, on the U.S. market since May 2012, is made for use in beverage dispensers and served at slush-like consistency. The ber ingredientFood Product Design | BRJ BOARDROOM JOURNALitself, which is dextrin, is currently not being promoted by the company in any way as contributing specic health benets. This does not mean, however, that TCCC will not go down this route at some point in the future as part of its on-going new product development (NPD) efforts to create health and wellness-positioned beverages. Protein Leads in Packaged Food Another major trend visible across virtually all packaged food categories is the addition of protein. Greek yogurt is a roaring success in the United States. Greek yogurt is strained, which not only gives the end product a very creamy texture, but it also makes it much higher in protein than standard yogurta property that tends to feature prominently on the packaging. Euromonitor Internationals latest data shows Greek yogurt brand Chobani (by Agro Farma Inc.) managed to grow its value share from just under 1 percent in 2008 to 24 percent in 2013, turning it into the United States leading yogurt brand. Kellogg extended its brand portfolio to include a Special K Protein Plus cereal and its Special K atbread breakfast sandwich high in protein and only 240 calories to sit alongside its protein bars and milkshakes, targeting those looking to lose weight by maintaining a feeling of fullness. In October 2013, Kraft launched Philadelphia 2X Protein cream cheese spread in the United States, containing 4g of protein per serving compared to 2g in the standard version. In the U.K., Global Food UKs launched Dr. Zaks high-protein pasta in September 2013. Instead of durum wheat our, the product contains pea protein isolates, resulting in a formidable 50g of protein per 100g; standard pasta usually only supplies one-tenth of this. The company also intends to introduce highprotein tortilla atbreads toward the end of the year, and bagels and pizza bases in the foreseeable future. In Germany, besides dairy, bread is leading the way. Protein-enriched evening bread, which sells for a premium, has found great acceptance not only among the weightconscious, but also among Germanys burgeoning diabetic consumer base. Virtually every German bakery offers at least one type of eiweissbrot (protein bread).13High-protein bread is not just available in unpackaged/artisanal form, but is also sold as a packaged/industrial product. Mller Brot GmbH & Co KG, Germanys third-ranking packaged/industrial bread producer, offers Gute Nacht Pro Body (gute nacht means good night), containing 21 percent protein and 6 percent carbohydrates, while the countrys second biggest bread maker, HarryBrot GmbH, markets Fit am Abend (t in the evening) under its Brotland brand. Continued Market Drivers Viewed from a global perspective, worldwide retail value sales of weight management-positioned products are set to grow by a little more than 10 percent from 2013 to 2018. This may seem like a modest increase, but one has to remember the category is fairly mature. Dynamic growth rates will be seen within specic geographiesfor example in the Middle East and Africa region, where sales predicted to rise by 43 percent over the next ve years, followed by Latin Americas 32-percent projected growth. Sophisticated steviasweetened beverages, for instance, are already starting to gain a rm foothold in some Latin American countries. The high-protein trend will play a major role in the medium-to-long-term future, especially in highly developed packaged food markets, but not exclusively so. High-protein harmonizes perfectly with the universal consumer desire for more natural foods, affording it unrivalled consumer appeal. Simone Baroke is a contributing analyst at Euromonitor International.theboardroomjournal.com 14. How the Food, Beverage and Restaurant IndustriesCan Help the Nation ThriveBY JEFFREY LEVI, PH.D.After three decades of increases, adult obesity rates remained level in every state except for Arkansas in the past year, according to F as in Fat: How Obesity Threatens Americas Future 2013. The report, released by the Trust for Americas Health and Robert Wood Johnson Foundation (RWJF), also found 13 states now have adult obesity rates above 30 percent, 41 states have rates of at least 25 percent and every state is above 20 percent. In 1980, no state was above 15 percent; in 1991, no state was above 20 percent; in 2000, no state was above 25 percent; and, in 2007, only Mississippi was above 30 percent. However, since 2005, there has been some evidence the rate of increase has been slowing. In 2005, every state but one experienced an increase in obesity rates; in 2008, rates increased in 37 states; in 2010, rates increased in 28 states; and in 2011, rates increased in 16 states.The rates of adults with a body mass index (BMI) of 40 or higher have grown in the past 30 years from 1.4 percent to 6.3 percenta 350-percent increase. Among children and teens (2- to 19-year-olds), more than 5.1 percent of males and 4.7 percent of females are now severely obese. In addition to the latest data showing a stable rate for adult obesity, a report released by the Centers for Disease Control and Prevention (CDC) showed 18 states and one U.S. territory experienced a decline in obesity rates among children ages 2 to 4 who are enrolled in federal health and nutrition programs, such as the Special Nutrition Program for Women, Infants, and Children (WIC). While stable rates of adult obesity may signal prevention efforts are starting to yield some results, the rates remain extremely high. Even if the nation holds steady at the current rates, Baby Boomerswho are aging intoThe rates of adults with a body mass index (BMI) of 40 or higher have grown in the past 30 years from 1.4 percent to 6.3 percent a 350-percent increase. In addition, the report found obesity rates vary by age and rates of extreme obesity have grown dramatically. Obesity rates for Baby Boomers have reached 40 percent in two states (Alabama and Louisiana), and are 30 percent or higher in 41 states. By comparison, obesity rates for seniors exceed 30 percent in only one state (Louisiana) and rates for young adults are below 28 percent in every state. Food Product Design | BRJ BOARDROOM JOURNAL14obesity-related illnessesand the rapidly rising numbers of extremely obese Americans are already translating into a cost crisis for the health care system and Medicare. F as in Fat also examined high-impact policies to prevent and reduce obesity, and three of the key recommendations from the report focus on how the food, beverage and restaurant industries should address the obesity epidemic. theboardroomjournal.com 15. Percent of obese adults (Body Mass Index of 30+) 0-9.9%10.0-14.9%15.0-19.9%20.0-24.9%25.0-29.9%30.0-34.9%WA MTNDORMN IDWISDWYUTCAAZCOPAIANENVIL KS OKNMNYMI OHINMOWV KYVA NCTN ARSC MSALGALATX AKFL HI13Number of states with adult obesity rates above 30 percent41Number of states with adult obesity rates of at least 25 percent20.5% 34.7%Colorado Lowest rate of adult obesityLouisiana Highest rate of adult obesitySource: Trust for Americas Health1Food and beverage companies should market only their healthiest products to children. The food and beverage industry spends nearly $2 billion annually marketing mostly unhealthy products to children and adolescents in America. Despite some progress to improve the nutritional quality of foods marketed to children, Americas youths continue to grow up in environments that promote unhealthy foods and beverages. The Institute of Medicine (IOM) recommended the food, beverage and restaurant industries improve the health of their products, shift their advertising and marketing emphasis to healthier child- and youth-oriented foods and beverages, and has reafrmed the need for stronger standards to improve food-marketing practices. Media and entertainment companies should jointly adopt meaningful, uniform nutrition standards for marketing food and beverages to children. In 2006, food and beverage companies created the Childrens Food and Beverage Advertising Initiative (CFBAI), a self-regulatory program administered by the Council of Better Business Bureaus (BBB) to limit unhealthy marketing aimed at children younger than 12. While the CFBAI has led to some reductions in unhealthy food marketing aimed at children,Food Product Design | BRJ BOARDROOM JOURNALseveral studies show the vast majority of marketed products remain unhealthy. The CFBAI should strengthen and expand its self-regulatory program to cover all forms of marketing to all children, including product packaging, in-store promotions and all marketing in schools. In addition, government agencies, researchers and independent groups should continue to monitor and evaluate food-marketing expenditures andNumber of ads on childerns websites for food and beverage in 20092 BillionBlack childrens exposure to advertising for regular soda compared to their White peers93%15MOREpractices, as well as childrens exposure to marketing and advertising for unhealthy foods and beverages and the effectiveness of industrys voluntary actions. Concern about the ineffectiveness of industry self-regulation led Congress in 2009 to direct the formation of an Interagency Working Group on Food Marketed to Children (IWG). The group released a set of voluntary principles in 2011 and following the conclusion of a public comment period, Congress requested IWG to conduct a cost-benet analysis of proposed voluntary guidelines in 2012. To date, that analysis has not been completed. To improve the nutritional prole of foods marketed directly to children, the IWG must nalize its guidelines.2Restaurants should post calorie information on menus. Americans consume approximately onethird of their total calories and spend half of their food budget eating away from home. Many leading health organizations, including the American Medical Association (AMA) and the American Heart Association (AHA), support menu labeling as an important tool to allow consumers to make informed choices. The AMA recommends providing consumerstheboardroomjournal.com 16. Americans dont have access to a supermarket within a mile of their homeMILES23.5 MILLION 30is the distance 70 percent of Mississippi food stamp-eligible families live from the closest large grocery store32 percent increasein fruit and vegtable consumption for Blacks with each new supermarket in their neighborhoodSource: PolicyLink, The Grocery Gapwith easy-to-understand nutrition information that includes total calories, fat, saturated fat, trans fat and sodium content. Over the past few years, some states and local communities have started to require larger chain food establishments to begin menu labeling. In addition, the Affordable Care Act (ACA) included a national requirement for all food establishments with 20 or more locations to clearly post the calorie information for each standard item on their menus. Companies with 20 or more food or beverage vending machines would have similar requirements. In April 2011, FDA issued proposed rules and held a public comment period on new requirements for chain restaurants, similar retail food establishments and vending machines to include calorie counts on menu boards and to have additional nutrition information available upon request. The federal rules would preempt any existing state or local menu labeling regulations. More than 80 national, state and local health organizations and experts called on FDA to strengthen the nal rule and adhere to the language in the ACA by including outlets that sell food beyond chain restaurants, and to require labeling of alcoholic beverages listed on menus. As of July 20, 2013, the rule has not been nalized.Food Product Design | BRJ BOARDROOM JOURNALIn its nal regulations, which should be issued as soon as possible, FDA should meet the original intent of the ACA and not exempt calorie labeling for alcoholic beverages, and should not exclude movie theaters, airplanes, bowling alleys and other businesses whose primary business is not to serve food, as they are places where millions of Americans regularly consume food and beverages.3Everyone should be able to purchase healthy, affordable foods close to home. Research has shown many Americans want to eat healthier. According to the Natural Marketing Institute (NMI), at least one-third of consumers are committed to healthier eating, and a Harris poll found 58 percent of restaurant patrons consider healthy menu items when choosing a restaurant. In addition, a 2013 Hudson Institute study found chains that increased lower-calorie servings outperformed those that served fewer lowercalorie items. In reality, companies can benet tremendously by offering healthier options. In so doing, their actions have the added benet of addressing one of the nations most urgent public health crises.16Failure is not an Option If we fail to reverse obesity, the current generation of young people may be the rst in American history to live sicker and die younger than their parents generation. That is completely unacceptableespecially when weve begun to see progress and understand what policies and approaches can halt the epidemic and help those who want to stay healthy do so. In addition, the success among children has taught our nation how to prevent obesity: changing public policies, community environments and industry practices in ways that support and promote healthy eating and physical activity. Quite simply, all food in schools must be healthy, restaurants should post calorie information on menus, food and beverage companies should market only their healthiest products to children, and everyone should be able to purchase healthy, affordable foods close to home. Jeffrey Levi, Ph.D., is the executive director of Trust for Americas Health. Visit fasinfat.org for interactives, graphs, charts and obesity rates for the states and nation going back decades.theboardroomjournal.com 17. Battling Bulge with Taxes, Government RestrictionsBY JOSH LONGMayor Michael Bloombergs failed soda ban in New York City illustrates divisiveness over the role of government in combating the nations blubber. New York courts have found the prohibition on large sugary drinks is unlawful because the health board exceeded its authority. The controversial measure has stirred bipolar reactions in Mississippi and Mexico.Will taxes and limitations on fatty foods and sugary drinks actually help control weight? Some academics seem to think so. Jacking up food prices would, in fact, help reduce body fat in youths.Food Product Design | BRJ BOARDROOM JOURNALMississippi, the second most obese state in the United States, was so incensed it passed legislation prohibiting local governments from regulating the sales and marketing of food and non-alcoholic drinks. Dubbed the AntiBloomberg Bill, SB 2687 even preempts local regulation of food-nutrition information. Its simply not the role of government to micro-regulate citizens dietary decisions, Mississippis Republican governor Phil Bryant declared in a statement accompanying his signing of the bill in March 2013. Obesity-plagued Mexico feels differently; Americas southern neighbor has passed taxes on snack foods and soft drinks. The idea is to reduce consumption of sugar and other junk foods that are expanding waistlines and increasing the risk of diabetes and heart disease. According to 2009-2010 data from the Centers for Disease Control and Prevention (CDC), more than one-third of U.S. adults are obese. CDC considers an adult obese if he or she has a body mass index (BMI) of at least 30 while a person with a BMI of between 25 and 29.9 is classied as overweight. Mississippi and Louisiana lead the nation in adult obesity, while Colorado holds the10distinction of being the least-fat state, according to a project of the Trust for Americas Health and the Robert Wood Johnson Foundation. A soda tax is something that American city councils, state legislatures and Congress should be looking at in the months and years ahead, argued Michael Jacobson, executive director of the Center for Science in the Public Interest, in a statement Oct. 31. Will taxes and limitations on fatty foods and sugary drinks actually help control weight? Some academics seem to think so. Jacking up food prices would, in fact, help reduce body fat in youths, according to a working paper from the National Bureau of Economic Research. The paper found a 10-percent hike in the price of a calorie for home consumption would reduce male percentage body fat by roughly 9 percent. Our results do not directly speak to the potential impacts of a soda tax, authors Michael Grossman, Erdal Tekin and Roy Wada wrote, but they do suggest that a tax on meals purchased in fast-food restaurants or a subsidy to the consumption of fruits and vegetables would lead to better obesity outcomes among adolescents. The Grocery Manufacturers Association (GMA) is unequivocal that taxes and food restrictions are ineffective in capsizing corpulence. At the end of the day, arbitrary bans, restrictions or taxes are not a viable solution to solve obesity, said Sean McBride, GMAs executive vice president of communications and membership services. Its scientically proven if we are going to solve obesity [individuals must] eat a healthy diet and be more physically active.%17A 10-percent hike in the price of a calorie for home consumption would reduce male percentage body fat by roughly 9 percent. theboardroomjournal.com 18. According to McBride, food and beverage companies have implemented a number of measures to improve consumers health and reduce fat. Some of those measures include: introduction since 2002 of more than 20,000 new products with fewer calories, reduced fat, sugar and sodium as well as more whole-grains; the launch of Facts up Front, a voluntary front-of-pack nutrition labeling system intended to help parents make more informed decisions; through an initiative, the voluntary adoption of advertising criteria to promote healthier diet choices on childrens programming; the removal of full-calorie soft drinks from schools and a 90-percent reduction in total calories from beverages at schools; and $130 million in annual grants to support nutrition and health-related programs. McBride said the industry should continue to invest in such programs to help consumers be more physically active and achieve healthier diets. Others contend food companies have little incentive to promote healthy products. Michele Simon, a policy consultant to the Center for Food Safety and public health lawyer, describes a food industry that makes money by selling highly processed, cheap food.The food industrys economic motivators come from taking natural ingredients and processing them and putting them in a box and putting a big advertising campaign around them, said Simon, who authored the book, Appetite for Prot: How the food industry undermines our health and how to ght back. They make more money selling Frosted Mini-Wheats instead of just oatmeal by the pound, she said. But even she expressed reservations that taxes will yield fruit in the battle against blubber. Im not sure we know yet how effective a food tax might be, Simon said. Looking at marketing more broadly is just as importantmaybe more importantthan that particular strategy. Marketing to children has been an acknowledged problem for decades now. Unquestionably, government has an incentive, and a role to play, in promoting healthier diets. According to the CDC, obesity results in annual medical costs of $148 billion. The health agency cites such obesityrelated conditions as cancer, heart attack, type 2 diabetes and stroke. FDA is taking an active role in ghting fat. In a landmark announcement, the agency preliminarily determined in November 2013 that partially hydrogenated oilsthe primary dietary source of articial trans fat in processed foodsare not generally recognized as safe (GRAS).Reducing trans fat in the American diet could prevent an additional 20,000 heart attacks and 7,000 deaths from heart disease each yeara critical step in the protection of Americans health, FDA Commissioner Margaret Hamburg declared. Jacobson of CSPI referred to the removal of articial trans fat as one of the most important life-saving measures FDA could take. Thousands of heart attack deaths will be prevented in the years ahead, he proclaimed. With FDA opening up a 60-day comment period, at least some food manufacturers are likely to oppose the measure. And a nationwide survey conducted by the Pew Research Center found Americans are divided over whether to ban trans fat in restaurants. Forty-four percent of the 996 adults surveyed were in favor of the prohibition while 52 percent opposed FDAs proposal. The GMA hasnt provided an ofcial position on the issue other than noting the industry has lowered trans fat in food by more than 73 percent since 2005. Consumers can be condent their food is safe, GMA declared in a statement, and we look forward to working with FDA to better understand their concerns and how our industry can better serve consumers. Josh Long is the legal/regulatory editor for Food Product Design.Bloomberg Ban New York Citys attempt to ban large sugary drinks is maddening to a beverage industry that has successfully challenged the prohibition in the local courts. Still, consumers have acknowledged drinking less soda could be benecial. According to a TeleVox Healthy World Survey, nearly half (46 percent) of respondents believe drinking fewer sodas could help them shed pounds. And roughly one-third of Americans report they would support a soda ban in their local area, the survey found. Food Product Design | BRJ BOARDROOM JOURNAL18theboardroomjournal.com 19. AddressingOBESITYThrough Food Culture BY LAURIE DEMERITTAmericans eat too much and too often, and they arent active enough.Thats the refrain U.S. consumers recite about their collective weight. It demonstrates a remarkable depth of self-knowledge for a population that nevertheless struggles to reverse the trend. In late 2013, the National Center for Health Statistics said the U.S. obesity rate had leveled off at 35 percent of adults, but remained an epidemic.Despite having a frank understanding of the basicstoo much food, too little movementalmost half of consumers are conicted about how to effectively manage factors that lead to obesity. When talking about what makes them overweight, The Hartman Groups decades-long research in health, wellness and eating behaviors consistently nds that consumers blame their own choices more than food companies or particular ingredients. They also are aware of the strong inuence of food culture. For example, they know their eating habits are shaped by busy lifestyles in which they frequently eat alone, and they know emotions play a role in how much they eat. Everyone from food manufacturers to retail and government has an opportunity to help people navigate that complex world. A complicating factor is U.S. consumers as a group have tilted so far toward beingoverweight that individuals do not necessarily know when their weight has become a problem. Being heavy has become a new normal, and people are so accustomed to seeing bulging waistlines that the shame factor around fat has diminished. The same applies to watching other people eat and (not) exercise. Just by spending time together, consumers have created a new standard for whats acceptable when it comes to meals, movement and weight. Although many people would like to lose a few pounds, they often think their weight is fairly average. In our research, one 55-year-old overweight man told us he was in good shape for my age, while a 24-year-old obese female said she needed to lose a few pounds, but overall not too worried about it. Consumers see food culture as affecting weight in many ways. They believe healthy food costs more than inexpensive meals,and they have begun to attribute more responsibility than previously to fastfood restaurants and high-calorie foods. The Hartman Groups How America Eats 2011 report on eating behaviors and weight management shows 43 percent of consumers see fast-food restaurants as more responsible for obesity than other restaurants, up from 30 percent in 2004. Similarly, 38 percent of consumers now think companies that make high-calorie snack foods are more responsible than others for obesity, up from 29 percent in 2004. Consumers say they would like food manufacturers to make healthy food choices easier by standardizing serving sizes, and they want retailers to sell fresh, wholesome food. When ranking tactics they believe promote healthy eating, people cite: nutrition education programs in schools (80 percent), nutrition information on menu items in restaurants (69 percent), and nutrition labeling requirements for restaurants (65 percent) and food manufacturers (63 percent) (Figure 1). People gain their earliest ideas about eating from their parents, and obesity has more than doubled in children (to 18 percent) and tripled in adolescents (also to 18 percent)Figure 1. Tactics Consumers Believe Promote Healthy Eating Educational programs at schoolsMost consumers support efforts to include more intensive education about obesity and healthy eating in schools. Question for these responses: Please indicate your opinion on each of the following tactics de-signed to promote healthy eating. (Top 2 Box) Base sizes (n): All respondents (1,790).80%Nutritional information on all menu items at resutrants69%Nutrition labeling requirements for resturants65%Additional nutrition labeling requirements for food manufacturers63%Obesity lawsuits against fast food resturantsFood Product Design | BRJ BOARDROOM JOURNAL15%While strong opposition to obesity lawsuits is on the decline the percentage of consumers actually supporting such actions is still small19Source: How America Eats 2011 report, The Hartman Group Inc.theboardroomjournal.com 20. during the past three decades. In 2010, more than one-third of U.S. children and adolescents were overweight or obese, according to the Centers for Disease Control and Prevention (CDC). People blame parents for the problem, with 85 percent saying parents are responsible for what their children eat. They also blame the U.S. lifestyle of eating on-the-go, unsupervised snacking at home and parents who do not set a good example with their own eating habits. Shifts in cultural norms have a major inuence on weight, from the changing concept of meals to feelings associated with hectic lifestyles that have become tied to eating. People snack more than they eat meals, and often they eat alone and on the run. Breakfast is almost completely skipped by 23 percent of overweight consumers and 32 percent of people who are extremely overweight, compared to 18 percent of normal-weight consumers and 19 percent of people who are underweight. Research indicates the greatest challenges for overweight and extremely overweight people are junk food, comfort food, frequent snacking and eating because of emotions such as boredom, stressand frustration. In the bigger picture, U.S. food culture has migrated from a series of planned, utilitarian meals to todays emphasis on specialization, authenticity and eating while doing other activities such as working and watching television. Many consumers believe busy lifestyles lead to poor eating habits because they require people to manage their time (around work and family priorities) at the expense of managing their weight. Put simply, U.S. food culture now means eating more, eating more frequently and eating alone more than ever (Figure 2). In fact, 40 percent of adult meals are eaten alone, while 51 percent of adult snacking happens alone. Without companions, people tend to eat mindlessly and eat more. In addition, consumers have replaced many meals with snacks, which are beginning to dene much of U.S. food culture. Snacking is no longer a special, infrequent occasion just for children or with a limited set of product categories (cookies or chips). Snacks have become healthier and their frequencyFigure 2. Language Map: Consumers perceive culture, or How America Eats, as the cause of obesity. salt not healthy value menu cheaphabitsnacking all dayhome cookingat (kids) eventnot enoughtoo many servingsotherat desklunch room local restaurant at deskfast food junk foodbuy in bulk coupons on saleHOW AMERICA EATSleftoversmindless munchingtelevisionat home at desk in carfatty foodsunhealthycheapofcesugartoo muchWHAT WE EATWHERE WE EATcafeteriamicrowave entreeseat in caron way to work/eventhomeshocked pantriesmulti-task on way homerestaurantlarge portionscomputerdrive thrutime crunchspecial fast food occassion socialize indulge/ casual dining splurge can make healthier choice guided by nutrition infoquick & easy24 hours convinientfresh producehungry nowspontaneous alonecoworkers barrestaurantWHO WE EAT WITH friends partycook together special occassionfamily holiday evening meals meal TV/movie night snacksWHY WE EAT emotionalWHEN WE EAT late night snack snack all dayskip breakfast in the carcravinggrab & gohave a taste for in the mood forindulging sweets/dessertsboredom stress comfort sadness/depression sudden intense hungercomfort food high fat/sugarcravingsTo read the map, consider the color areas the trunk of a tree representing primary themes, and treat the other areas as branches of supporting quotes, thoughts, tactics, etc., connected to what the primary themes mean to consumers. Source: How America Eats 2011 report, The Hartman Group Inc.Food Product Design | BRJ BOARDROOM JOURNAL20theboardroomjournal.com 21. Snacking is no longer a special, infrequent occasion just for children or with a limited set of product categories (cookies or chips). Snacks have become healthier and their frequency demonstrates a new attitude toward eating in general, including a belief in distributing small treat moments throughout the day to avoid over-indulgent binges. demonstrates a new attitude toward eating in general, including a belief in distributing small treat moments throughout the day to avoid over-indulgent binges. Food marketers can compete in this arena by offering smaller, snack-sized portions packaged for people to eat at their desks or on the go; they can create the higher-quality snack foods people want and nd products that are appealing for early morning and late-night snacking where there are few established cultural cues about what should be eaten. Companies also can encourage people to socialize while they eat, which makes compulsive eating almost impossible. Their marketing campaigns can demonstrate empathy for a cultural love of snacking while encouraging people to think of creative waysto socialize it. Snacks can return to the old days of afternoon teas and after-school treats when they were enjoyable, memorable experiences rather than bad foods to avoid. Although people managing their weight are frequently targeted by the food industry for particular products, their needs change over the course of their weight-management journeys, which means no single product is likely to stick unless it meets an ongoing need. Consumers often embark on weightmanagement journeys after realizing their eating habits are chaotic. They seek out weight-loss tips and plans as well as information about nutrition, health and food culture, which is an opportunity for food marketers to become part of a process that, when successful, leads to healthy eating.People look to a host of resourcesfrom social networks to books, magazines, doctors, television, websites and store displays. They also tend to follow diets early on because that allows them to outsource their food choices and eating habits to experts. Most consumers nd diets do not work because they lead to boredom, cravings and alienation from social eating. Other weight-management strategies include giving up key ingredients or categories such as sugar, carbs, fast food or red meat; cutting back on calories and snacks; and creating rules that ultimately can be internalized and lead to a more enjoyable approach to eating. However, shortly after the rules are formed, people often face conicts, challenges and setbacks that spiral them into a trying this and trying thatImagine what you could do with a pound of insight! For leading-edge insights on consumer culture that deliver breakthrough results, turn to The Hartman Group. To get a taste for how we do this, download a free copy of Trends Insights: From Market Research to Strategic Implications white paper.425-452-0818 | www.hartman-group.comFood Product Design | BRJ BOARDROOM JOURNAL21theboardroomjournal.com 22. feedback loop in which some products can achieve fad status, then disappear. When people break out of that loop, they move toward more self-awareness and an understanding of eating that helps them form intuitive, pleasure-based attitudes that are complex but still orderly and routinein other words, healthy. The most successful weight-management strategies include eating fresh foods, preparing meals at home and watching portion sizes. Meal planning is a valuable tool that consumers use to maximize nutrition, seasonality and avors, and it helps them shop for and cook more fresh, whole foods at home. When considering particular meals, 51 percent of people who are watching their weight say portion size is a consideration at dinner, whereas only 41 percent say it plays a role at breakfast. Sugar content is the greatest concern with snacks, while fat content is the top concern for lunch and dinner. When reading labels on food products, consumers say their top weight-management concern is intake of calories, followed by sugar, fat, and salt or sodium. They nd nutritional information on labels confusing because there is no standard measure of serving size. Such information has less inuencePortion Size % 51 Dinneron consumers eating in restaurants and foodservice settings because even people watching their weight say such visits are not about making healthy choices. Food marketers should take into account the vast world of food culture when considering consumers who are watching their weight and trying to eat healthier foods. Only when the conversation publicly and within companiesturns to that rich, complicated arena will food companies be able to predict with any certainty whether they are meeting consumers needs with categories and products that are likely to last. As CEO, Laurie Demeritt (laurie@hartman-group.com) provides strategic and operational leadership for The Hartman Groups research and consulting teams. Laurie and The Hartman Group analysts are recognized for their unique ability to blend primary qualitative, quantitative, and trends research to help clients develop successful marketing strategies by understanding the subtle complexities of how consumers live, shop and use products, and how to apply that understanding in ways that lead to purchase.People who are watching their weight say portion size is a consideration at dinner, whereas others say breakfast.41 Breakfast %Source: The Hartman Group Inc.Food Product Design | BRJ BOARDROOM JOURNAL22theboardroomjournal.com 23. Snacks: Its all About Balance BY TOM DEMPSEYGo to a sporting event, or a mall, or the airport, or even just walk down the street and its obvious many Americans are not making healthy dietary decisions or getting enough exercise.It is a matter of personal responsibility. And yes, the food industry can make it easier with better-for-you options and more helpful labels. Specically, the snack food industry can and isplaying an important role providing the information and the products to help consumers make healthy choices and still enjoy their favorite foods, in moderation.Food Product Design | BRJ BOARDROOM JOURNALFor proof, do some people watching the next time you are out and about. Too many folks are hurriedly stuffing themselves with foods high in calories, fat, sugar and salt, not even thinking about what the excesses will do to their health. As Americans, we are given the opportunity to make our own decisions about diet and health, consciously deciding what, how much and when to consume food and beverages, and then the extent to which we will exercise to work off the calories. Surveys have shown Americans dont like to be told what to doespecially when it comes to personal matters. We should be making our own decisions; thats what a free country is all about. It is a matter of personal responsibility. And yes, the food industry can make it easier with better-for-you options and more helpful labels. Specically, the snack food industry canand isplaying an important role providing the information and the products to help consumers make healthy choices and still enjoy their favorite foods, in moderation. As the former president of Utz Quality Foods, a major snack manufacturer in the United States, I can tell you snack makers have worked tirelessly to be responsible when it comes to health and wellness. We did that at Utz, and snack companies across the nation are doing so as well. In fact, snack manufacturers were among the rst in the food industry to offer 100-calorie packages of their products to help consumers manage their caloric intake. Companies have23developed and created low-fat, low-calorie and low-sodium products for the same purpose. They are on the store shelves today in grocery and convenience stores across the nation. Industry Action Here are some specics about what the industry, led by the Snack Food Association (SFA), has done: Support for Competitive Foods Standards in Schools: SFA and the majority of its members support competitive food guidelines set forth by both the U.S. Department of Agricultures (USDA) Healthier U.S. Schools Challenge (USSC) and the Alliance for a Healthier Generation (AHG). Both guidelines have gone through extensive review and allow for a good variety of better-for-you (BFY) food products to be available to children in schools. SFA is working with USDA to respond to its interim nal rule and eventual implementation of a nal rule to reect what we continue to support in USSC and AHG.theboardroomjournal.com 24. Healthier Than You Think:With consumers snacking more and mealing less, the snack food industry is working hard to decrease, sugar, fats and calories, and add more whole-grains. Reformulation: Many of the companies SFA represents manufacture foods that may be healthier than you think. Our industry, like others, has worked hard to decrease sodium, sugar, fats, trans fats and calories, and added more whole-grains. In fact many of our products come from combinations of a few simple ingredients. Better-for-you Items: Our industry has worked to offer consumers a variety of new, BFY products including reduced-fat and reduced-sodium popcorn and potato chips, whole-wheat crackers, pita chips, granola bars, pretzels and baked chips, and clearly mark these on their packages with icons and verbiage. SFAs members have also pioneered portion control through smallersize packages. Responsible Marketing: Many in our industry are engaged with the Better Business Bureau (BBB) in its Childrens Food and Beverage Advertising Initiative (CFBAI), where they have championed responsible marketing to children. Through this program, snack makers have led the effort to successfully shift the marketing mix to only allowing those items that meet strict nutrition criteria for kids under 12 years of age. Labeling & Access to Nutrition Information: Snack makers have supported the provision within the Affordable Care Act that requires the disclosure of calories and other nutrition information for certain foods sold in vending machines. Operators who ownFood Product Design | BRJ BOARDROOM JOURNALor operate 20 or more vending machines will be required to post calorie information, unless certain nutrition information is already visible on individual packagesan activity many of our members are working to implement to ease consumers access to nutrition information. SFA also supports the industrys effort to provide front-of-pack labeling so consumers can more easily compare the nutrition information of different products. Preserving SNAP Choice: For more than 40 years, the Supplemental Nutrition Assistance Program (SNAP) has been the foundation of Americas national nutrition safety net, the rst line of defense against hunger among low-income people. SFAs goal is to preserve the ability of SNAP recipients to exercise choice in their food purchases. In an April 2012 report on the prole of SNAP, USDA stated across broadly dened food categories, there is little difference in the food choices made by low-income and higherincome families. However, amendments to limit SNAP choice have been proposed in Congress. SFA is working with anti-hunger advocates and others to allow all consumers to make their own choices. Nutrition Facts Panel: Over the past few years there have been several FDAcommissioned consumer studies and Advanced Notices of Proposed Rule Making (ANPRMs) issued related to the Nutrition Facts Panel. SFA expects proposed changes will likely include: an increase in prominence24of calories, change in serving size (RACC), addition of required nutrients such as potassium, update of the daily reference values (DRVs) and the reference daily intake values (RDIs), and lowering trans fat label levels (from 0.5 to at most 0.2). SFA is working with industry partners to help FDA understand potential consequences of changing the label, including consumer confusion, increased cost and changes to existing commitments that are based on current serving sizes. Once the proposed rule is published, SFA will work with members to determine the key areas of greatest concern and consider submitting comments. Ultimately, however, SFA companies will continue to provide the required information to help consumers make informed choices. One of todays most frequent messages from dietitians and nutritionists is that a good way to help curb ones appetite and successfully lose weight is to consume smaller, regular, frequent meals throughout the day. The right snacks, eaten in moderation, can help make that possible. The snack food industry, with the help of SFA, is working to provide those choices to make it even easier for consumers to enjoy their food selections while improving their health. Tom Dempsey is CEO of the Snack Food Association and former president of Utz Quality Foods.theboardroomjournal.com 25. ReshapingObesitywith Industrys CEOs BY LISA GABLEWhen Indra Nooyi, CEO of PepsiCo, addressed the Midwinter conference of the Food Marketing Institute in January 2008, she had an important message to deliver: We can do something and we should do something. Nooyi knew more than one in three American adults and nearly one in ve American children were obese; and she knew the potential health consequences of obesity: type 2 diabetes, hypertension, cardiovascular disease (CVD) and other ailments. And while companies in her industry were making changes in the marketplace to provide lower-calorie options to the consumer, critics were either unaware of the industrys efforts or skeptical of the results they produced. At the time, the food and beverage industry recognized the need to become even more actively and visibly engaged on obesity, so when Nooyi challenged them, she had a group of colleagues that were eager to lead. In the fall of 2009, some of the countrys largest food and beverage manufacturers and retailers formed the Healthy Weight Commitment Foundation (HWCF), setting out to do their part in addressing the obesity challenge, focusing on two key elements that would determine its success: to make a signicant marketplace commitment with its ndings buttressed by an independent outside evaluator, and to put its resources behind a consumer education campaign and open its doors to any organization looking to participate in this effort. HWCF has grown from 16 founding-member companies into a coalition comprised of moreand schools reduce obesity, especially childhood obesity, by 2015. Research shows energy balancebalancing the calories consumed with energy expendedis an effective weightmanagement concept easily understood at all ages. We offer consumers more choice in the marketplacehelping balance their caloriesinand promote active, healthy living through regular exercisecalories out. We focus our efforts on two critical areas: families and schools. It is at school and in the home where children spend most of their time, and where educational and support initiatives can achieve the most. Time to Step Up and Commit In May 2010, HWCF was the rst industry group to step up and make a commitment to the First Ladys Partnership for a Healthier America, an organization working to mobilize action around the goals of the First Ladys Lets Move! Campaign. The Foundation committed to reduce calories sold in the marketplace by 1.5 trillion via a variety of ways: offering reduced portion sizes of single-serve products, lowering the calorie content of current products and introducing new lower-calorie products. Critics are quick to challenge the credibility of industry commitments, so we knew bringing in an independent, outside evaluator to evaluateResearch shows energy balancebalancing the calories consumed with energy expended is an effective weight-management concept easily understood at all ages. than 250 organizationsincluding retailers, food and beverage manufacturers, restaurants, sporting goods and insurance companies, trade associations and non-governmental organizations, and professional sports organizationsworking together to help familiesFood Product Design | BRJ BOARDROOM JOURNAL25our ndings was essential to our success. Beyond our public commitment to the First Lady, we turned to the one of the most respected thought leaders in the obesity spherethe Robert Wood Johnson Foundation (RWJF). RWJF is the nations largest philanthropy devotedtheboardroomjournal.com 26. 82% OF SALES GROWTH$1.25B SALES INCREASEexclusively to improving the health and health care of all Americans and has an unimpeachable reputation. This past May, HWCF announced it had exceeded its goal of reducing 1.5 trillion calories in the marketplace by the end of 2012, three years ahead of Lower-calorie products drove 82 percent of the schedule. sales growth among the HWCF member food Evaluating calories sold and beverage companies studied, over four in the marketplace for 16 times the rate of higher-calorie products. separate companies requires an incredibly complex econometric Lower-calorie sales increased by over $1.25 process, comparing sales yearbillion, compared to less than $300 million for higher-calorie products. over-year while considering changes in product portfolios. Anyone familiar with business can imagine how difcult it might have been for erce I N S T I T U T E competitors to come together and direct some of their For more information visit www.obesity-solutions.org collective energies toward developing great-tasting, lower-calorie foods that meet consumer demands for taste, value and convenience. RWJF will announce the results of its evaluation in the rst half of 2014.HUDSONEnergy Balance Beyond transforming the marketplace, HWCF also sought to leverage resources and reach of its membership to provide parents, teachers and caregivers with the necessary tools to educate children on the need for energy balance. To do this, HWCF partnered with another best-in-class company, Discovery Education, the leading provider of digital curriculum worldwide. Discovery worked closely with us to create the Together Counts program. The program platform is built upon Discoverys existing channel, which reaches 53 percent of all U.S. elementary schools. The program leverages Discoverys reach, credibility, deep relationships with elementary schools, and proven ability to provide educators with useful tools. The goal was to provide a one-stop shop for lesson plans and resources for teachers and parents.Food Product Design | BRJ BOARDROOM JOURNAL26On togethercounts.com teachers can nd free, open-source, standards-based lesson plans; and parents, school health professionals and community organizations can nd tips, tools and resources to use at home, including bringing resources to at-risk communities with the support of its sponsors and partners. It isnt enough to simply put information out there; we needed to nd ways to grab the attention of parents, teachers and students and engage them as active leaders in making longterm changes. Understanding that incentives drive change, HWCF launched competitive awards campaigns to encourage schools to improve their energy balance, providing prizes and support with the help of its non-prot and corporate members. For example, schools can enter the Find Your Balance Challenge through the submission of an Energy Balance business plan to win a grand prize of $30,000 or runnerup prizes of $5,000 each. This years winner will use the award, along with matching funds from the New England Patriots, to upgrade the facilities in their school cafeteria to prepare produce, add a permanent salad bar, build a gymnasium, invest in heart-rate monitors and pedometers, purchase playground and tness equipment, and fund a greenhouse. Recognizing that nutritious eating and lifestyle habits start at an early age, this past September at the Clinton Global Initiative, HWCF and Discovery Education launched Smart from the Start, which focuses on preschools. Pre-school and Head Start programs are eligible to compete for a $20,000 grand prize and ten $2,500 runner-up prizes. In addition, HWCF has funded two additional Smart from the Start grant progra