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Posts Tagged ‘healthy eating’

To Sin or Not to Sin: Can a “Sin Tax” Benefit Consumers?

Tuesday, July 24th, 2012

A recent revelation that sugar heavily contributes to the United States’ overall decline in health through an increase in diabetes, obesity, heart disease and cancer, has prompted policy makers to suggest government imposed “sin taxes” on sugary foods to help deter Americans from consuming such large quantities of sugar.  The initial proposal to impose a sin tax on sugar has generated buzz among CPG marketers, manufacturers and retailers regarding opportunities to capitalize on the shift to healthier living, and the current consumer wants and needs associated with that change.

The question still remains, however: Will a sin tax really deter consumers from purchasing sugary foods, or do other factors more effectively impact behavioral change?  Proponents of the sin tax submit that if it costs more to purchase sugary products, the demand for those products will decrease. Such taxes are currently in place for the sale of tobacco products and alcohol. On the other hand, Denmark provides us with an example of how ineffective sin taxes can be, as the government is considering reversing a current “fat tax” because citizens have been crossing the Danish border to purchase fattier items in neighboring countries. The behavior of the people of Denmark supports the argument that taxing sugary products is not quite the same thing as taxing the behavior of consuming sugar—the desire to consume sugar may remain regardless of price.

In light of this debate, CPG marketers and retailers have the opportunity to act proactively, navigate through this social change and emerge with increased profits and sales despite the implementation of a sin tax.  Some alternative solutions will not only help shoppers make healthier decisions, but also allow retailers and marketers to maintain control within their industry, such as price incentives, brand extensions and easy to interpret labels. The following illustrates some examples of how this could be executed:

Pricing: While imposing a tax ultimately increases the price of sugary foods, CPG insiders can more effectively manipulate pricing to change purchasing behaviors. Foods that tend to be healthier, organic or non-processed are not always affordable. By lowering the prices on natural foods like produce, meat and poultry, consumers might be more likely to purchase those items over the processed products stocked on store shelves.

More Healthy Options: As I mentioned in my prior post, “How Bittersweet It Is,” retailers can provide their own solutions to the sin tax dilemma by offering more options to health-conscious consumers. In addition to remaining in control of the product and pricing strategies for their stores, by carrying a greater array of products, retailers will also help support current trends and lifestyle changes. CPG brands can also benefit from the demand for alternative products, because if they haven’t already done so, they have the opportunity to extend their product lines by providing reduced sugar and sugar free variations of popular products.

Effective, Easy-to-Read Labels:  Another reason shoppers buy products with high sugar content is simply because they aren’t aware those products contain as much sugar as they do. Current labels are hard to read, and the details regarding ingredients are printed on the back of product packages in small fonts. By introducing straightforward, front of package labels that are easier to read, it ultimately becomes the consumer’s decision to purchase something that contains 22 grams of sugar per serving. Perhaps if shoppers immediately see that a product contains 22 grams of sugar per serving, they will seek alternatives.

Since the concern about how much sugar we consume is still a fairly new development in the CPG industry, it’s the responsibility of marketers, retailers and manufacturers to take control of the situation and provide viable and easy to execute solutions. Doing so will not only benefit the CPG industry, but it will have a lasting impact on shoppers.

How Bittersweet It Is

Thursday, May 31st, 2012

Is sugar to blame for America’s obesity epidemic? Of course, it’s not the sole cause of thickening waistlines, but sugar has become the scapegoat as recent headlines have claimed it a toxin. And, CPG marketers have taken note.

The International Food Information Council’s (IFIC) annual Food and Health Survey reported that in 2012, 20 percent of consumers selected “sugars” as the “source of calories most likely to cause weight gain.” This figure is almost double that of the 11 percent reported in 2011.

CPG manufacturers have the opportunity to help relieve a public health crisis, as overconsumption of sugar can lead to type 2 diabetes, hypertension and heart disease. Ahead of the curve, some have already responded to consumer demand with new sugar-free offerings and even reformulated additions to traditionally sweet product lines.

In the past, artificial sweeteners took sugar’s place in diet soda, candy and baked goods, but frequently came under attack for possible negative effects. Sucralose still has its place in the market, but more and more products are now substituting chemical-based sweeteners for all-natural options, such as monk fruit, oats, and the popular stevia.

Natural sugar alternatives provide more ingredient choices to CPG manufacturers but also complicate the selection process. When choosing an ingredient, keep these factors in mind:

  • Claims: Front-of-package health claims can lead to sales increases. Will your target market see “all-natural” as a benefit?
  • Cost: Natural stevia is much more expensive than artificial sweeteners, such as aspartame, saccharin and sucralose. What price point is optimal for your product?
  • Calorie reduction: It’s possible to mix natural or artificial calorie-free sweeteners with sugar for only half the calorie count. What calorie range fits your consumers’ needs?
  • Aftertaste: Sugar alternatives sometimes have a lingering or bitter aftertaste that may need to be masked by other flavors.

For retailers, giving health-conscious consumers more options is key. The UnitedHealth Group predicts that by 2020, more than half of the American population will be diabetic or pre-diabetic. By adding more sugar-free products to their shelves, grocers can help this group achieve weight management goals. Many retail stores have expanded sugar alternative sections by carrying a greater variety of products lines and package types. Retailers should also consider dedicating increased shelf space to products with a sugar substitute as a main ingredient.

These efforts will not only encourage lifestyle changes, but also increase brand and shopper loyalty. What steps are you taking toward implementing sugar-free substitutes in your products or on your shelves?

Creating an Oasis of Healthier Options in Food Deserts

Thursday, February 2nd, 2012

Healthy eating alternatives, such as whole grains, lower sugar, 100 calorie packs, and nutrition-packed foods, are on a trend for 2012 and beyond. However, customers living in a food desert, areas where healthy and affordable food is difficult to find, may never be able to find the latest and greatest healthy food options.  Food deserts, which are often a result of a supermarket shortage and are prevalent in rural and urban areas, particularly among low-socioeconomic minority communities, are well associated with a variety of diet-related health problems.

Historically, retailers have closed their doors in areas with higher crime and lower foot traffic, causing pockets of food deserts in communities with the highest need for better food options.  Recent research revealed that supermarkets re-entering these areas are turning the tide by providing healthier eating alternatives and healthy eating education opportunities for some of the country’s most at-risk populations.  Although there are currently several programs at the federal, state, and local levels focused on increasing the incentives for supermarkets to operate in underserved areas, solving the food desert issue is a complicated scenario.  There are plenty of opportunities, however, for both manufacturers and retailers to take action.

Manufacturers have an opportunity to invest in marketing to targeted consumers in food deserts, teaching consumers about healthy eating options and more about the brands and products that would correlate appropriately with healthy alternatives. However, it doesn’t stop at education; shoppers need to be able to FIND their products. Enter retailers, who can capitalize and benefit from potential federal or state funding and tax assistance to open stores in underserved areas, as well as to expand product offerings.

For example, The Reinvestment Fund (TRF), a Philadelphia-based nonprofit community development organization with a track record for developing supermarkets in underserved areas, has helped to open supermarkets in the most underserved areas of Pennsylvania and New Jersey.   TRF helped lead the Pennsylvania Fresh Food Financing Initiative, which began in 2004 and has so far provided $74 million in loans and $11 million in grants to finance 80 supermarket projects. Similar funding may be available in other states/municipalities for retailers.

Although admittedly not a simple task, if the right mechanisms and strategies are properly executed by CPG manufacturers and retailers, there is a great opportunity to advance change and address the food desert issue, ultimately creating an “oasis” with healthier food options for everyone.

How to Keep Kids (and Your Brand) Healthy

Tuesday, January 3rd, 2012

Pending legislation may restrict the types of food that can be marketed to children. Supporters of the proposed guidelines seek to alleviate an all-time high level of childhood obesity, but others fear the policy will eliminate too many jobs.

It may be awhile before a decision is reached due to the requirement of a cost-benefit analysis. The cause-effect relationship between advertising and childhood obesity is also being debated.

Nevertheless, children’s health is a prime concern. In the meantime, how can the CPG industry show support for minimizing the obesity crisis while upholding their brands?

Over the past few years, some manufacturers have voluntarily altered their product’s ingredient composition. For example, General Mills vowed to lower sugar levels in all cereals marketed to children, which now contain 10 grams of sugar or less per serving. The company also increased the use of whole grain in kid-friendly Big G cereals.

Other retailers and manufacturers are supporting healthier options in schools, as the nutrition of cafeteria food has long been scrutinized. Produce providers Dole, Chiquita, and Sun World have recently donated salad bars to schools to offer children fresher alternatives to standard cafeteria menus.

Whole Foods Markets (a sponsor of the Let’s Move Salad Bars 2 Schools initiative) and Publix have also made donations, in hopes that children’s act of choosing from an assortment will turn fruit and vegetable consumption into a habit.     

Dole’s Nutrition Institute even created a school curriculum, including lesson plans, music, games and activity books focused on forming healthy eating habits.

Other possible strategies manufacturers can employ to support children’s healthy eating may include:

  • Introducing healthier, kid-friendly brand extensions (Sara Lee disguised whole grains in whole wheat white bread)
  • Reducing size and calorie count of lunchbox-friendly packs (Nabisco introduced 100 calorie packs for portion control)
  • Increasing marketing efforts to promote existing healthy product lines to children (Last year, farmers borrowed the traditional junk food marketing approach to brand baby carrots as “the original orange doodle”)

What are some strategies your brand is using to combat childhood obesity?