The Economics Of Obesity- How The Food Industry Makes Us Eat More- Part 2 of 2
This is part two of two articles on the economics of obesity. If you haven’t already you can read part one here: Why The Food Industry Needs Us To Overeat- The Economics Of Obesity Part One
The Effects of Food Industry Advertising on Public Eating Habits
The influence of the American food industry doesn’t stop with convincing Washington to promote their interests, but reaches deep into our very hearts and minds through omnipresent advertising. Cut throat public relations campaigns are essential in an environment where there is such an overabundance of product. Our enormously high food production rates here in the United States brings about fierce competition among brands. So much so that it creates giant conglomerates as companies merge as a way to reduce competition and increase overall influence. Small companies simply can’t compete against monster corporations with billions in revenue and they are inevitably bought out and assimilated into the larger conglomerates. It’s a perfectly legal activity but it does lead to some degree of deception on the consumer end as buying out the competition creates the illusion that consumers have more choices than they really do. Only three companies, Philip Morris (you might know them better as Kraft Foods and Miller Brewing), ConAgra and RJR-Nabisco accounted for 20% of the market in 1997. With the growing popularity of organic foods, the corporate Goliaths were quick to step in and buy out almost all of the small scale organic farms and companies who made products that they public loved to support. You never get the memo announcing the sale, nor is there much of anything in the news as they do their best to keep any such acquisitions as quiet as possible. You’ll just see your favorite local brands in more supermarkets than before in larger quantities with a significant increase in the amount of advertising for it. All geared towards making you eat more.
Why Making Junk Food Is An Important Part Of Keeping Profits High
In 2002, we had 320,000 different food items for sale here in the U.S. with one small problem- supermarket shelves only have room for 50,000 products. Given such an outlandish surplus, foods today have to appeal to consumers while not costing too much as the American public as a whole is not willing to spend very much on what they eat. Americans spend less than 10% of their income on food- which might seem like a lot to those of us who live here, but it is far less than what is spent in other developed countries. Europeans spend 15-17% of their income in food, the Japanese spend 20% and people in poorer countries spend half to as much as 70% of their income on food. American consumers however will not tolerate such high food costs, and so to keep prices low, food producers cut corners whenever they can. This means using farming models that aren’t always best practices for the environment or the animals involved, but ones that yield the most profit from lower overhead costs. Food producers also increase their profits by making more processed products. For example, by turning corn (which is dirt cheap and doesn’t bring much in terms of mark up profit) into corn snacks (which are relatively expensive), they increase the value of a basic foods. That these foods are for the most part nutritionally worthless isn’t the point- people will buy it, it doesn’t cost much to make and the profit margins make it worthwhile. Thus cheap rice is made into expensive organic rice crackers and inexpensive potatoes become pricey chips and French fries.
It isn’t possible to mark up the value of fresh fruit and vegetables very much other than giving it an organic label- but there are limits to how much consumers will pay for fruits and vegetables and they don’t sell as well as processed foods. To make matters worse, vegetable growers get as little as 5% of the market value when you purchase produce in a store while poultry and meat producers get anywhere from 50 to 60% of the final retail costs. Again, the economics are stacked against healthy foods. So calls to action by eating more fruits and vegetables won’t do much if food growers make such relatively little profits. Almost 70% of the 33 billion dollars spent on food advertising goes towards persuading the public to eat more candy, snacks, soft drinks, desserts and alcoholic beverages. The fruit, vegetable and grain sectors make up only 2.2% of those advertising dollars while the USDA spends less than 300 million dollars a year on education on healthy eating. This number isn’t completely an accurate figure as most of those funds go towards agricultural research projects so the total amount dedicated to promoting better food choices is far less. To say the odds are against the messages of not overeating and avoiding junk foods would be an understatement of the highest degree.
The Ideal Consumer Is A Confused Consumer
One of the most harmful aspects of the food industry lobby is the exploitation of single nutrient studies. Food companies help fund research centered on the potential health benefits of single nutrients and then use the results of these studies to justify ridiculous health claims on their labels. There is considerable confusion created by the mixed messages and constantly changing ‘nutritional news’ when one study reportedly finds a food product to be healthy one day and another study finds it to be harmful the next. Such confusion works to the advantage of food producers as confused consumers are more likely to believe the questionable health claims on their products. The influence of the food conglomerates is frightening and far more insidious than we like to think. The heart healthy check mark of the American Heart Association is one of the most recognized consumer health symbols in America- yet it has been brazenly displayed on the sides of boxes of Lucky Charms, Trix, and Cocoa Puff cereals, in addition to Yoo-hoo Chocolate Drinks, Healthy Choice’s Caramel Swirl Ice Cream and Mazola Corn oil. None of these products are remotely healthy by any stretch of the imagination, yet somehow they were able to secure backing from one of the most prominent and trusted health authorities in the country. I will leave you to your own conclusions as to how that happens.
How The Food Industry Makes You Eat More
The other way food companies increase their profits is by making you eat more. While no one likes to admit to being manipulated, the rising levels of obese and overweight men, women and children here in the U. S. show that the food companies have been enormously successful at manipulating us to eat more. With a limited number of calories that can possibly be consumed by the adult population, promotion to children to get them to eat more as well has become a standard part of the food industry’s advertising push over the past several decades. Interestingly enough, this increase in advertising focus coincides directly with the term Adult Onset Diabetes being officially changed to Type II diabetes given the alarmingly high number of children that are developing it today. It’s hardly a coincidence. In the years 1976-1980 the rate of obesity among preschoolers aged 2-5 was only 5.0%. A rate that doubled to 10.4% in the years 2007-2008. The figures get worse as the children get older as obesity rates among those aged 6-11 jumped from 6.5% to 19.6% during the same periods and increased from 5.0 % to 181% among adolescents aged 12-19. Focusing on getting kids to eat more isn’t the only way food companies increase consumer eating habits- adults are equally targeted by shrewd policies that go unnoticed by most of us.
One of the easiest ways companies get you to eat more is by increasing serving sizes. By making the bigger serving portions cheaper than the smaller ones consumers inevitably go for the better deal and end up eating more in the process. It’s a masterful strategy as you have to pay more to eat less. Now it might seem that the food industry loses money by giving you bigger portions in restaurants and packaged products, but it’s sound economics in terms of their profits. The cost of food production is quite low relative to labor and the aforementioned factors used to increase the retail price of the original food. So, by encouraging larger portions and increasing the cost of smaller ones- you make people buy more and eat more. It’s a relatively easy way to increasing profits without increasing production, but it creates unhealthy serving sizes and a population that doesn’t think twice about eating more to get the most ‘bang for their buck.’ Take a look at the oversized popcorn and soda choices at movie theaters that cost only a fraction more than the smaller options. Look at the ‘bargain’ supersized portions sold at fast food restaurants and the better value bigger packages in supermarkets and you’ll see it for yourself. No other country that I’ve been to has servings quite as larger as the ones offered here in America and it’s all part of a carefully thought out strategy to make you buy more and eat more. The constant influx of new products also plays a major role in getting people to eat more. New food products labeled as ‘organic’ or containing ‘organic ingredients’ have joined the roster of ‘low fat’, ‘all natural’, ‘fat free’, ‘no cholesterol’, ‘high fiber’, and vitamin enriched foods. None of these labels have any bearing on whether a food is inherently healthy or not, but it gives the public a feeling of comfort when they buy them. A sense of comfort that also encourages us to over consume foods that we shouldn’t be eating in the first place. If high fructose corn syrup is bad today, replacing it with ‘organic sugar’ in a product still makes it a junk food, but the illusion of it being healthier persuades consumers to eat it with a guilt free conscience. Feeling guilt free about what you eat won’t stop you from gaining weight by eating too many empty calories but it is good for business.
How To Protect Yourself From Marketing Messages To Eat More
We gain nothing by saying that we are immune to the effects of food advertising as such ways of thinking only leads to a false sense of security. Most advertising operates far below our consciousness and it influences even the most health conscious of us all. Today there is little that isn’t manipulated to make you buy more and eat more; religion, your concerns about the environment, animal rights and your own health concerns are all used to influence your buying and eating decisions with products designed to align with your way of thinking. Whether we like it or not, research consistently shows that by increasing the intensity, repetition and visibility of food related advertising messages we buy more and eat more. Our 24/7 hour connections to the Internet, television and other media makes it almost impossible to avoid ads and secluding yourself in the mountains isn’t a practical answer to not being influenced by them. However if you understand how the food industry works, you’ll be far less likely to fall for the ploys designed to make you eat more of the wrong foods.
Eating healthy isn’t confusing- it’s just not titillating or slick by any stretch of the imagination, and in a room with so many other voices shouting louder it isn’t often heard. The new and entertainment industry wouldn’t see much of an increase in their audience if every diet related segment said that you should avoid refined and processed foods, don’t overeat and use only fruits and vegetables as your snacks. Not only is it somewhat tedious, but it would alienates the very food companies whose refined products provide the lion share of advertising profits. It might not be a popular message backed by billions, but it is one that won’t ever change and one that you should heed if you are serious about being in shape.
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Recommended Reading: Food Politics. How the food industry influences nutrition and health by Marion Nestle. University of California Press
1. Nestle M. Food Politics. How the food industry influences nutrition and health. University of California Press
2. Harris JM et al. The Food Marketing System. 2002 Agricultural Economics Report
3.Gallo AE. Food Advertising in the United States. America’s Eating Habits- Changes and Consequences- USDA
4.Ogden C, Carroll M. Prevalence of Obesity Among Children and Adolescents: United States, Trends 1963-1965 Through 2007-2008. CDC
5. Enyinda CI, Ogbeuechi AO. An empirical analysis of retail pricing and multimedia effects on sales performance. J Food Products Marketing.