I don't have children yet, but I already have a list of companies whose products I avoid because of the damage they do to our nation's youth. A story this past weekend in The Washington Post only added to that list.
The story, published on Saturday, outlined how some of the nation's biggest food makers are attempting to block voluntary standards aimed at improving health for our nation's youth.
First, a primer in evolutionary nutrition
We are all, in some way or another, descendants of hunter-gatherers. Our bodies evolved from their experiences. Though it may seem to us that the 10,000 years that separates us from these distant relatives is enormous, it's just a blink of an eye by evolutionary standards.
That's important because our eating desires closely mimic those of hunter-gatherers. Back then, it was rare to come upon abundant supplies of fats or sugars. When those elements were found in nature, they were quickly consumed. In times of drought or low food supply, these fats and sugars helped buffer the side-effects of hunger.
Fast-forward to today, and we still have the same demand for fats and sugars, but the supply has increased exponentially. Our overconsumption of fats and sugars makes perfect sense viewed through this lens. It explains why companies such as McDonald's
It also explains why the prevalence of obesity among children and adolescents has almost tripled since 1980. Of course, it's not just food companies that profit from our predilection for such food. Drug companies such as Merck and Eli Lilly also profit from this trend -- but in a less devious way -- as their diabetes medications are used by millions to help combat the disease.
Now, on to the (small "f") fools
In 2009, Congress asked four different government agencies to "propose nutritional standards that food and beverages should meet in order to be marketed to children." The initial release of those voluntary guidelines came out earlier this year, calling for companies to reduce salt, sugars, and fats in food marketed toward children. If Congress were to approve the guidelines, they would be just that -- guidelines. The government would have no way of enforcing them.
And yet, a group calling itself the Sensible Food Policy Coalition has spent millions of dollars lobbying against the guidelines so far this year. The coalition is made up of media companies -- like Nickelodeon parent Viacom, fast-food companies, and some of the nation's largest food makers -- like PepsiCo
None of this really matters
In the end, the coalition is fighting a losing battle. The real culprit that could lead to jobs being lost in the fast-food industry: education.
As more and more consumers get educated about where their food comes from, consumption patterns have changed. Don't believe me? Check out the chart below, which shows that organic food consumption in the United States has been growing at an astounding 18% per year for over a decade.
|
Year |
Total Food Sales |
Organic Food Sales |
Organic Penetration |
|---|---|---|---|
| 1998 | $454,140 | $4,286 | 0.9% |
| 2000 | $498,380 | $6,100 | 1.2% |
| 2002 | $530,612 | $8,625 | 1.6% |
| 2004 | $544,141 | $11,902 | 2.2% |
| 2006 | $598,136 | $16,718 | 2.8% |
| 2008 | $654,285 | $22,900 | 3.5% |
| CAGR | 3.7% | 18.2% |
Source: Organic Trade Association. CAGR = compound annual growth rate. Food sales in millions.
You can profit from this
If it seems like I'm being moralistic, I admit it: I am. But in the end, our changing consumption patterns -- not morals -- will determine the fate of the food industry. If you believe, like I do, that educated consumers will continue changing their behaviors, there are several ways you can profit from this trend.
Some health-oriented companies, like Weight Watchers
But my money is on grocers focusing on healthy eating. The two best plays in this realm: The Fresh Market
Foolish takeaway
Foolish co-founders Tom and David Gardner have both recommended Whole Foods for their Stock Advisor service. In fact, Whole Foods is one of David's "core" stocks. If you'd like to dive deeper into David's and Tom's picks -- which are currently outperforming the market by an average of 95% -- I suggest you give their flagship newsletter a free, 30-day test drive.
If you're not sure about that, then at least take a look at a new report out from the Motley Fool, The Motley Fool's Top Stock for 2011. Inside, you'll find the little company set to profit from the broadband Internet expansion. It's yours, today, absolutely free!
