"Smart Choices" in Food Stocks?

There's a new shopping aid for us overwhelmed consumers in supermarkets: a "Smart Choices" program that's slapping big, green checkmarks as seals of approval on various food offerings. You might be surprised where you'll find them, though.

The products endorsed span a wide range of food types, from cereals like General Mills' (NYSE: GIS  ) Lucky Charms and Kellogg's (NYSE: K  ) Froot Loops to Kraft Foods' (NYSE: KFT  ) cheese-pizza lunchables and Wheat Thins.

This development isn't without some controversy, though. According to the New York Times, 10 companies, including the above as well as ConAgra (NYSE: CAG  ) , Unilever (NYSE: UL  ) , and PepsiCo (NYSE: PEP  ) , are forking over as much as $100,000 apiece to be part of the program. Thus, the program's freedom from conflicts of interest sure seems compromised.

There's also controversy over how well consumers are served -- after all, can't we find healthier fare than Lunchables? Proponents counter that question by pointing out that we are, at least for now, a country of people who eat processed foods. And it's helpful to point us toward some items that are better for us than others.

Changing times ...
What I find more interesting in all this is that some companies are changing their ways. Kellogg, for example, has added fiber to many of its cereals, such as Froot Loops and Apple Jacks, and by 2011 expects 80% of its cereals to be "at least good to excellent sources of fiber."

Seeing food companies improving the healthfulness of their mainstream offerings is kind of exciting. In the past, you've seen many companies just launch separate niche offerings to health-conscious customers. But they're probably responding to a heightened concern for nutrition among many Americans, as well as the changing needs of baby boomers, who are going to grow increasingly interested in high-fiber, low-fat, and low-salt offerings.

Cynics say it's just a marketing ploy. Well, perhaps. But any improvement to a product is usually a good thing, despite the motive.

What to do
As investors, we'd do well to keep an eye on this trend. When companies are responsive to consumer needs and preferences, they tend to profit. Southwest Airlines (NYSE: LUV  ) , for example, is now offering customers who pay an extra $10 a better place in line, thus giving them a shot at a more desirable seat. This seems like it will be a win-win offering from the company, generating more profits and happier customers.

Are food and beverage stocks going to lead the economy out of recession? Ivan Martchev thinks they're worth a closer look.