Lower-Calorie Foods Lead Sales Growth
Hudson Institute Research: Market data shows 99% of sales growth for leading consumer packaged goods companies is from lower-calorie foods
Providing consumers lower-calorie foods is good for business and public health, according to a new research report from Hudson Institute, an independent policy research organization. The Healthy Weight Commitment Foundation (HWCF) asked Hudson Institute to analyze sales data from the 16 major food and beverage companies it counts among its members to determine both trends in sales and product availability.
Hank Cardello, senior fellow & director of Hudson Institute's Obesity Solutions Initiative and author of Stuffed: An Insider's Look at Who's (Really) Making America Fat, said the research reveals that over a period of five years ending December 31, 2012, 16 Healthy Weight Commitment Foundation companies increased their sales of lower-calorie products, made those items more available in grocery stores and retail outlets, and promoted them more in-store.
"While there is still much work to be done in addressing the nation's obesity epidemic, this study reveals that consumer preferences are changing, and answering the demand for lower calorie products is both good for business and America's waistline," said Cardello.
Cardello's study, "Lower-Calorie Foods and Beverages Fuel Growth at Healthy Weight Commitment Foundation Companies," released at a National Press Club briefing, was designed to determine quantitatively whether HWCF companies were making progress in selling more lower-calorie foods and beverages in concert with their pledge to Partnership for a Healthier America (PHA) — an initiative to eliminate 1.5 trillion calories from the food supply.
"The 16 Healthy Weight Commitment Foundation companies not only met their goal, but exceeded it, removing 6.4 trillion calories from the marketplace," PHA Chief Strategy Officer Ryan Shadrick Wilson said. "We're pleased that this commitment offered new options for families and kids, at the same time improving companies' bottom lines. There's much more to do, and we hope HWCF's success will inspire more innovation and promotion of healthier options."
HWCF President Lisa Gable also commented: "When some of the country's largest food and beverage manufacturers and retailers formed the Healthy Weight Commitment Foundation in 2009, we recognized that an absolutely critical component of this work would be the analysis and tracking that this study documents."
In an independent evaluation, the Robert Wood Johnson Foundation verified that the companies cut 6.4 trillion calories from the marketplace from 2007-2012 to fulfill a pledge they made to First Lady Michelle Obama to do their part in the fight against obesity.
"We're excited to see that these 16 companies have not only more than met their calorie cutting commitment but are also reaping financial rewards," said Tracy Orleans, Ph.D., senior scientist at the Robert Wood Johnson Foundation. "Both results provide a spring board for these companies to take further action and for others to get on board." According to the study, 99% of the almost $1/2 billion sales growth came from lower-calorie foods, while only 1% of sales growth came from higher-calorie foods. On the supply side, there was a 96% increase in the availability of lower-calorie products.
"The HWCF efforts have improved the quality of food purchased in America simultaneously with reducing calories. The fact that their efforts are supported by the market will inspire food service and additional food companies to join this effort along with those focused on promoting higher levels of physical activity," said Derek Yach, executive director of health research firm Vitality Institute.
Compiled using A.C. Nielsen Company data for a five-year period ending Dec. 31, 2012, the report also documents a 96% increase in the availability of lower-calorie products compared with a 4% increase in the availability of higher-calorie products.
By the end of 2012, the study noted that lower-calorie products are increasingly available in-store as findings highlighted a 14.1% net increase of these products still on grocery shelves.
Cardello said sales trends are the most compelling demonstrations of the consumer shift toward "better for you products." He compared the $485 million increase in lower-calorie products sales, to the paltry $2 million increase of higher-calorie item sales.
Cardello's approach was to quantitatively measure increases in the following:
1) Sales of lower-calorie foods and beverages
2) Sales of lower-calorie products moved on in-store promotion
3) Number of lower-calorie products introduced
4) Supermarket availability of lower-calorie products
Cardello said Hudson Institute formulated a composite INDEX or Score capturing the sum of improvements made across all the aforementioned categories. The INDEX will serve as a benchmark and an ongoing tracking system of aggregate HWCF company progress in delivering and supporting better-for-you products. Cardello noted that the Index is a follow-up to the 2013 research the Hudson Institute conducted for the HWCF.