Consumers worldwide are becoming increasingly health-conscious. Discover how a change of direction can translate into positive market growth. Dated: 1 August 2006 BY DR SUKU BHASKARAN VICTORIA UNIVERSITY
Recently, there has been heightened and well-publicized concern in the US and EU over the marketing of ‘non-healthy’ foods. As result, diet-health has become an issue of concern within a relatively short period of time. And already there are signs that responsible corporate behavior is paying off.
Changing landscape The most dramatic example is PepsiCo’s rapid rise. In 2006—for the first time in more than 100 years—its market value surpassed that of its rival Coca Cola. Both companies invested heavily in promoting, advertising and distributing their products in over 200 countries. But analysts attribute the difference to PepsiCo’s aggressive diversification into health foods; the flipside is that it has also reduced exposure to litigation brought on by non-healthy foods. (In the last two decades, PepsiCo adjusted to the ‘new’ market environment with product innovations and acquisitions, resulting in a highly-diversified product portfolio.) Coca Cola, is also establishing a larger footprint in the health-foods category. Its CSD (carbonated soft drink) sales have decreased sharply in almost all developed countries. Instead, the top-performing products in those regions are Powerade sports drink, Dasani water and Minute Maid fruit juice. Currently, Coca Cola is seeking EU approval to market a fruit-juice drink containing plant sterols.
Negative effects Evidence of increasing community interest is the pending, legal action in the US against the sale of CSDs in schools. The litigants contend that CSD sales in schools breach consumer protection laws, and that vending machines are an “attractive nuisance”.
Such actions are expensive and have the potential to generate much negative publicity. As a result, market-oriented companies are initiating voluntary actions to address concerns regarding the marketing of food products. EU soft-drink marketeers have voluntarily mandated that they will not target promotions to children under the age of 12. In the US, companies have gone a step further by withdrawing CSDs from all elementary schools in the country.
Global impetus Responsible corporate behavior has become a worldwide issue. A recent WHO(World Health Organization) report said the growing scourge of health problems from food and lifestyle choices requires immediate action. The report called for urgent and concerted action to reverse the incidence of diet-related diseases in the world.
Following on from the report, WHO proposed that food and beverage companies be monitored stringently on health-related non-financial indicators. The proposed indicators would track food-company action on promoting healthy diets that improve products nutritional qualities products, marketing strategies to encourage healthier food and lifestyle choices, and information on product composition to government authorities.
Expect both the relationship between diet and health, and the influence of advertising and promotions on food choices and food cultures to become major topics for community and government debate and action.
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