Simon Nixon says food companies will make money out of the government’s obsession with obesity – and consumers will pay
Sometimes life really does imitate art. It’s less than 10 years since the satirist Chris Morris made his infamous episode of Brass Eye in which he persuaded a host of self-important politicians and celebrities to stand in front of the camera and utter lurid warnings about the risks of ‘cake’. This dangerous substance was said to be having a devastating effect on children. ‘One girl threw up her own pubic bone,’ claimed a Tory MP who went on to ask questions about ‘cake’ in Parliament.
Well, cake is now firmly back on the agenda. And not just cake either, but pizza, burgers, pies, fizzy drinks and chocolate — unless it’s Green & Black’s fair trade organic chocolate. But this time it is no joke. Thanks to our addiction to this stuff, Britain is sitting on a potential public health time bomb, warns the government. So far, there are no reports of people throwing up their own bones but, according to Diabetes UK, ‘we will soon be seeing children losing limbs and going blind’.
Who is responsible for this terrifying prospect? Step forward the food industry, headed by some of Britain’s biggest companies, including Unilever, Cadbury Schweppes and Associated British Foods. The government holds them responsible for an epidemic of obesity. Department of Health figures show that we’re turning into a nation of porkers. Some 22 per cent of British adults qualify as obese and 50 per cent are overweight. Obesity among children has risen from 11 per cent to 17 per cent in a decade, putting them at greater risk of diabetes, heart disease and strokes in later life.
Obesity is now one of the biggest challenges facing the food industry. In the US, campaigners have already tried to sue McDonald’s in a rerun of the ‘tobacco wars’. In the UK, the industry has been pushed into publishing its own seven-point plan to tackle obesity. So far, it has made big cuts to salt, sugar and fat levels in everything from cereals to sauces and snacks, put more nutritional information on labels and removed vending machines from schools.
But the government wants to go much further. It wants ‘traffic light’ health warnings on labels, with red labels signalling foods that have a lot of sugar, salt or fat. It also wants food companies to stop advertising to children. And, following Jamie Oliver’s School Dinners television series, it has ordered a ban on junk food in schools.
It’s tempting to feel sorry for the industry. There’s little doubt it is at the mercy of poor statistics and bad policy. The Department of Health’s headline-grabbing figures rely on an outdated measure of obesity that fails to take account of changes in children’s height. Using the internationally accepted measure of obesity, the problem is not nearly as bad as it seems. The proportion of British children who qualify has risen from 4 per cent to 7 per cent in the last decade, rather than 17 per cent.
The real rise in obesity is among adults, particularly the middle-aged. That’s hardly surprising, given the numbers of people with desk jobs, who drive to work, and the amount of time spent watching TV at home. In fact, people today consume on average fewer calories than 50 years ago. The real problem is that we don’t exercise enough. That’s hardly the fault of the food industry.
But food companies are up against determined opponents, spanning five government departments and an army of consultants, lobbyists and pressure groups. As usual, ministers see only the headlines, not how policies will work in practice. ‘Traffic light’ labelling treats shoppers like imbeciles, demonising foods such as confectionery that have a legitimate place in a balanced diet. The same is true of the ban on junk food in schools. What exactly is junk food? If sugary drinks are so bad, should we ban fruit juices as well as fizzy drinks since they contain similar amounts of sugar? And if fat is the problem, why not ban pork sausages rather than the notorious Turkey Twizzlers, which contain a third less fat?
Still, one shouldn’t feel too sorry for the industry, even if there have been casualties of the obesity scaremongering. Consumer tastes and behaviour have changed dramatically. Sales of fresh fruit and vegetables are soaring, but fast food joints are suffering. McDonald’s has faced a massive slump, forcing it to close 25 branches. Britvic, which makes Tango and Seven-Up, revealed a dramatic drop in sales of fizzy drinks just weeks after its recent stock market flotation.
But the food industry, like any consumer sector, thrives on change. No less than makers of fashionable trainers, food companies depend on advertising to keep their brands relevant to customers. And advertising only works if you’ve got something new to say. Companies that respond to changing tastes can advertise more, and the more you advertise, the more you sell. Every time Danone, the French yogurt maker, adds more bacteria to its Actimel range, it brings out a new ad. That’s why its shares have soared while those of Unilever, whose track record on innovation has been appalling, have languished.
Indeed, the whole industry has now jumped on to the ‘wellness’ bandwagon. Bog-standard grocery items are being reformulated and presented as miracle cures. A drop of cod liver oil — rich in something called Omega Seven — is added to margarine and suddenly it’s no longer something to smear on your toast but the key to eternal life.
Across the food industry there is a winner for every loser — often within the same company. Sales of Twinings traditional teas may have suffered in the health hysteria, but sales of its green teas and herbal infusions are rocketing. Even Britvic is making up much of what it lost on its fizzy drinks from sales of bottled water and fruit juices. And the good news is that if you slap a fancy label on your product and call it healthy, then you should be able to charge a bit more for it.
Meanwhile food companies are investing millions in venture capital funds hoping to unearth new products that will make our food fit the current requirements. Tate & Lyle has already given the world Splenda, the sweetener that tastes like sugar but contains no calories and is now used in Diet Coke. The huge rise in Tate & Lyle shares shows that there is money to be made from obesity.
Indeed, almost everyone seems set to gain from the obesity panic. Politicians like nothing better than a public health scare that gives them an opportunity to be seen to be doing something. And obesity has already proved a brilliantly effective make-work scheme for civil servants and the health lobby. Meanwhile companies get a chance to revive tired product portfolios to reflect the fashion of the times. Perhaps the only losers are consumers, who will end up being bullied into paying more for their low-fat, low-sugar, low-calorie cake.
Simon Nixon is executive editor of breakingviews.