Tipping The Scale

It was the food fight of 2003: Marketing, critics charged, caused the obesity epidemic. Too many ads, two-buck burgers and irresistible snack foods tempted consumers — especially kids — into getting fat.

Food marketers rolled up their sleeves, slashed trans fats and otherwise reworked their recipes and marketing guidelines, and started doling out advice on nutrition and exercise. Their about-face gains momentum this year as packaged food and restaurant brands debut whole marketing strategies to fight the rap that they force excess pounds onto consumers.

The spin is a neat 180 that morphs last year’s question — Does marketing cause obesity? — into this year’s quest: Can marketing cure obesity?

The issue could reshape the way food brands spend an estimated $82 billion on marketing, with about $22.3 billion pegged for consumer and account-specific promotion and another $19.7 billion or so for advertising.

“Obesity is one of the most important issues worldwide. Food is part of the solution, and we want to be a leader in that,” says Lance Friedmann, Kraft Foods’ senior VP-Health & Wellness. “We also see this as a growth opportunity: As consumers switch to healthier foods, we want to offer choices people want.”

This year will show how deeply the health trend touches the $687 billion U.S. food industry. That includes supermarket food sales, which topped $416 billion in 2002 (per the Food Marketing Institute), and restaurant and bar sales that hit $271 billion in 2003, with fast food restaurants accounting for $141 billion (per Technomic, Inc.).

“We see many different consumer motivations [for healthy eating] — weight loss, performance, disease management,” Friedmann says. “We want to play in all those sectors. Retailers are banging on our door because they see shoppers looking for healthier choices.”

Big brands take three tacks: Introduce or highlight low-fat items; promote physical activity; offer nutrition education. Marketing to kids gets special scrutiny, with the Better Business Bureau’s Children’s Advertising Review Unit (CARU) as lead watchdog.

Grocers hungry for merchandising and events have eagerly given CPGs a stage for health messages. “This lays the groundwork for more in-store marketing because that’s the best place to integrate the elements” as consumers shop for a new regimen, not just individual products, says Bill Bishop, principal of food marketing consultancy Willard Bishop Consulting, Barrington, IL. “Retailers can more cost-effectively assemble the system.”

Look at Slim-Fast: The Unilever brand is running a four-month promo exclusive to Wal-Mart Stores, leveraging in-store events for extended display. The 2004 Slim-Fast Challenge kicked off Jan. 10 with in-store weigh-ins at 3,500 Wal-Mart and Sam’s Club stores. Shoppers registered in-store, online or by phone, then came to Wal-Mart to weigh in at the pharmacy and begin a 12-week effort to drop as much as 25 pounds. Registrants got a Personal Success Kit with a pedometer, Slim-Fast sample and nutrition guide. Spot radio supports in 26 markets, with stations hosting live-remote broadcasts in 105 Wal-Mart stores. An estimated 500,000 consumers are expected to participate. The J. Brown Agency, Stamford, CT, handles.

Of course, health-as-marketing-strategy rests on the big assumption that consumers really are changing the way they eat. Cynics say consumers and food marketers alike are just offering lip service to healthier eating, that consumers’ good intentions won’t last and marketers will drop it as soon as consumer interest wanes. But optimists think consumers really will shape up, and any marketing that promotes healthy habits is good marketing.

“There’s a fad, and there’s a trend. The fad is the diet du jour — Atkins, South Beach, whatever. The trend is greater nutritional awareness,” says new-product consultant Bryan Mattimore, principal at The Growth Engine Co., Stamford, CT. “Marketers need to move quickly with the fad and plan long-term for the trend.”

But marketers risk brand equity if they stretch too hard to make health claims or waver from a brand’s established image. Consumer trends “always need to be evaluated in the context of the longer-term brand identity and company goals,” advises Scott Davis, principal with brand consultancy Prophet, Chicago. “Ultimately, companies must decide whether taking a healthier stance will be healthy for its bottom line and its long-term success.”

Marketing to kids

The first proving ground is kids’ marketing, since kids are more vulnerable to persuasion and childhood obesity keeps rising: Thirteen percent of kids ages six to 11 and 14% of kids 14-19 are overweight, triple the number 20 years ago, according to the Surgeon General.

The Grocery Manufacturers of America asked CARU to collate its current guidelines on kids’ marketing for GMA’s CPG members. CARU will issue comprehensive guidelines as early as this month. “We’ve got the guidelines. We just need to enforce the hell out of them,” says CARU director Elizabeth Lascoutx. GMA’s request “shows a real commitment to proactively address whatever part of the obesity problem can be attributed to food marketing. The industry has been quite responsive to our requests for [marketing] modification. To some degree, it’s enlightened self-interest, but the increased consciousness is there.”

For example, H.J. Heinz Co. changed its Bagel Bites online auction when CARU complained about the sentence, “The more you scarf, the better your chances.” Heinz deleted the line.

“We’ll keep working with the food industry this year to heighten sensitivity,” Lascoutx says. “What might have been O.K. a few years ago isn’t now.”

Kraft Foods stopped in-school marketing last year and is working now with its five-month-old Health & Wellness Advisory Council to revamp marketing guidelines. It will review how ads display food and portray physical activity. Kraft also limited portion size of single-serve items and tailored in-school vending to suit local tastes and needs across the world.

Last year, Coke updated its 50-year-old guidelines to eliminate advertising and sampling to kids under 12. Promos and ads don’t show kids under 12 consuming Coke products unless they’re with an adult. Coke sets marketing support based on location, consumer demand and competitive activity.

In November, Coke put forth in-school marketing guidelines that the company hopes schools will use with all beverage marketers. The guidelines tie all promotions to physical activity, academic achievement or positive youth development, and provide only programs requested by school officials. The rules also keep marketing graphics off books and curriculum material; keep carbonated drinks away from elementary-school kids during the school day; and put juice, water, sports drinks and milk in soft-drink vending machines at comparable prices.

Coke first scaled back in-school marketing in 2001 after critics complained about exclusive vending deals (May 2001 PROMO). Coke revamped contracts with 200 schools.

Even a brand as high-minded as Sesame Street came under fire in November for running McDonald’s sponsorship ads before and after the show on 300 PBS stations. Watchdog group Commercial Alert petitioned Sesame Workshop President-CEO Gary Knell to halt “sponsorship messages” from McDonald’s. Knell responded that McDonald’s messages met PBS guidelines: They don’t show product, announce promotions, or use Sesame Street characters. McDonald’s defended its sponsorship as part of its corporate support for kids’ literacy.

New to the menu

Meanwhile, McDonald’s is testing Happy Meal options in Altoona, PA; Columbus, OH; and Tulsa, OK. Kids can choose Apple Dippers (a bag of apple slices and small cup of caramel dip) instead of French fries, and Minute Maid apple juice or milk instead of soft drinks. McD will test options through early March and may roll out nationally.

McDonald’s also continues to test its first adult Happy Meal, selling in Indianapolis since September. Go Active! Happy Meals pair a premium salad and beverage with a Stepometer — a pedometer that tracks daily walking. McDonald’s effort piggybacks a Step With It! exercise program that Coke first created to promote daily exercise for middle-school kids. McDonald’s expands Step With It! globally this year via its own Healthy Lifestyles efforts.

Burger King is testing kid items and this year may roll out the Veggie Burger that’s been in test since 2002. BK also added low-fat chicken sandwiches to its permanent menu and launched a meal deal with sandwich, salad and bottled water.

BK is also rethinking its premiums. A July 2004 tie-in with Spider-Man 2 will feature outdoor-game premiums that encourage kids to go out and play.

Full-service restaurants jumped on the Atkins Diet craze with low-carb entrees. T.G.I. Friday’s cut a licensing deal with Atkins Nutritionals to sell Atkins-approved items in its 520 restaurants. In March, Ruby Tuesday’s adds low-fat and low-cal items to the 30 low-carb items it adopted in its 650 restaurants in November. Applebee’s International will go national with a Weight Watchers tie-in, rolling out the best 10 items from a five-market test begun last year. Subway Sandwiches & Salads added “Atkins friendly” wraps last month.

However, interest in Atkins will wane by summer as dieters tire of it, predicts Ron Paul, president of restaurant consultancy Technomic, Chicago.

Still, to serve consumers’ broader nutrition awareness, “menus have to have sufficient breadth to attract all followers, with representation for all diets,” Paul says. “From there, it’s just a matter of merchandising to remind consumers of all the choices available.”

Some restaurants print a separate menu to highlight low-carb, low-fat or diabetic items. Last month, about 650 McDonald’s restaurants in Connecticut, New Jersey and New York posted “Real Life Choices” P-O-P that shows diners how to tailor their order to fit popular diets — low-carb, low-fat or low-cal. (Ordering burgers without buns doesn’t change the price, though.) Web sites also let consumers tailor nutrition information: McDonald’s “Bag a McMeal” and BK’s “calorie calculator” let consumers mix and match menu items to see how changing ingredients affects nutritional content.

Meanwhile, packaged goods marketers are filling in their portfolios. Watch for more marketing-inspired R&D this year as marketing staffers press in-house nutritionists for products that match diet trends — and meet consumers’ penchant for convenience.

But companies need to “carefully manage their traditional brand equities, and shouldn’t communicate messages that conflict with their historical messaging,” Davis says.

Unilever Bestfoods reportedly is developing a Carb Options brand, with 18 items from salad dressing to peanut butter. Frito-Lay is readying a line of low-fat kids snacks to launch early this year. The snack giant spent a year eliminating trans fat from top brands and adding ingredient info to packaging, then in September 2003 broke a print campaign touting the change. (In 2006, the FDA will require all food packages to list trans fat content.)

Kraft Foods cut trans fat from cookie/cracker brands and is working to cut fat from Oreos after watchdog group Ban Trans Fat sued in May 2003 to ban Kraft from selling Oreos in California. The group dropped its suit after Kraft agreed to cut trans fat.

The suit singled out Kraft, so its initiatives are more visible than other CPGs’. But critics say even Kraft was slow to address the obesity crisis. A source outside Kraft says the company asked agencies in 2002 for marketing ideas to address sedentary kids. Promotion and brand managers were eager to act, but top management was reluctant, worried that addressing the issue might look like an admission of responsibility for the problem.

“We led the industry with our July 2003 announcement of obesity initiatives. We put a stake in the ground. But with a company our size, you have to ensure that everyone is moving in the same direction,” says Kraft spokesperson Donna Sitkiewicz. “When you’re looking at the big picture, you need policies in place before all the brands go off in different directions.”

Nutrition education

Meanwhile, Kraft is piloting a nutrition education program for Hispanic families. “Salsa, Sabor Y Salud” (roughly “food, flavor and health”) is an eight-week program that family members attend together to learn about nutrition and exercise. Kraft tested the program last fall with six community organizations in Chicago, Los Angeles, Miami and San Antonio. It expands in those cities and adds New York City this quarter.

Hispanics are “a more at-risk population, so we wanted to be sure to target them,” Friedmann says. “You can’t just give a 10-year-old a pamphlet on good nutrition.” Kraft funded development of Salsa, Sabor Y Salud by the National Latino Children’s Institute.

McDonald’s plans to step up education efforts this year, building on its 2003 tie-in with Bob Greene, best known as Oprah Winfrey’s personal trainer. McD used a trayliner listing Greene’s “Tips for Leading an Active Lifestyle” through fourth-quarter 2003, part of McDonald’s ongoing Healthy Lifestyles campaign that got a boost in September when Greene signed on to help create collateral and make appearances.

Watch for more nutritionists and fitness experts to become ad celebs this year. In-house nutritionists are more visible, too, as they support marketing staff. Burger King named Joanne Lichten its chief nutritionist in December, reporting to senior VP-consumer insights and strategic branding Glad Markunas. McDonald’s named Cathy Kapica director of worldwide nutrition in October, reporting to VP Ken Barun. Kapica develops educational materials and helps marketing staff find the best way to present nutrition info. “I’m just an educator who works for a food company rather than a school,” she says. Kapica’s nutrition work complements Greene’s fitness expertise to “get that energy balance message out there,” she says. “He has the celebrity status, and we complement each other well.”

But endorsements remain tricky business since the 1997 brouhaha over Sunbeam Corp.’s deal with the American Medical Association for exclusive endorsement of Sunbeam home health care products. AMA backed out of the deal after intense criticism, and many health organizations remain wary of marketing deals.

Physical fitness

Tie-ins with fitness organizations also offer quick credibility and goodwill — and the pitch is to balance food and exercise, not necessarily to cut food consumption.

In December, BK signed a 12-month partnership with the President’s Challenge to bring the Presidential Active Lifestyle and Physical Fitness Awards to 200-plus U.S. schools. Starting in spring, BK will sponsor one under-funded school in each of its 200 markets to participate in the annual national challenge. (Fewer than 25% of U.S. schools mandate physical education.) Schools apply for funds.

A kids’ meal promo that broke last month makes the Teenage Mutant Ninja Turtles spokesmen for the Challenge “to broaden the appeal,” says Brian Gies, BK senior director of youth and family marketing. Activity-based Turtle premiums, trayliners, direct mail to BK Kids Club members and a 6 million-circulation Adventures newsletter tout the Challenge. A micro site at Burgerking.com lets kids track their challenge progress.

BK considered a handful of organizations before approaching the President’s Council. “We had a mutual objective: Help address obesity through a positive message that being active is healthy,” Gies says. “We can use our broad reach, with millions of marketing elements, to spread the word.”

BK’s marketing staff took it another step with school sponsorship. “We rallied the CEO and CMO to embrace the idea of putting money into schools in a non-commercial way,” Gies says. BK also approached 4Kids Entertainment to use the Turtles. (A November teaser piggybacked BK’s Dr. Seuss’ The Cat in the Hat promo.) Equity Marketing, Los Angeles, and Wunderman, Chicago, assist with Challenge execution.

Kraft teamed with fitness chain Curves International for a yearlong calendar of joint promotions targeting women. A January-February flight gives consumers who buy three Kraft products (from the 24-plus participating brands) three free 30-minute workout sessions at Curves.

In May, Curves’ 6,000 gyms will each award a gift basket of Kraft products in a random drawing.

But fitness tie-ins can backfire if consumers see it as a smokescreen when what brands really need is new recipes. “Consumers are so savvy now that this kind of partnership will only work if marketers are doing a whole bunch of other initiatives” including R&D for healthier products, says Jim Andrews, principal at sponsorship consultancy IEG, Inc., Chicago. “Marketers have to make sure they’ve done the basics first, and then tout partnerships.” Fitness organizations may start shopping for food-brand partners, especially among companies making recipe changes, Andrews adds.

BK “did a great deal of homework” to assure its partnership fits, Gies says. “We’re always sensitive about who associates with our brand. This partnership is based on our consumers, and it’s a 12-month program, not an in-and-out.”

The big question, of course, is what consumers will be thinking — and eating — 12 or 24 months from now. If attention holds, consumers and marketers alike will shape up.

THE OTHER SCALE: Legal Implications

Last year’s high-profile lawsuits against McDonald’s Corp. and Kraft Foods’ Oreos were more p.r. than prosecution. But lawmakers could go after food marketing like they pursued — and restricted — tobacco marketing.

The World Health Organization warned in November that there’s enough evidence linking kids’ marketing to childhood obesity to warrant intervention, even regulation. (WHO also blames “supersizing” for distorting adults’ notion of portions, causing them to overeat.) For now, WHO recommends parents limit kids’ exposure to junk food marketing.

Separately, the Food & Drug Administration has been asked to consider taxing ads for junk food. The American Obesity Association reportedly asked the FDA to quit giving food companies tax deductions on ads for low-nutritional food. The AOA — financed mostly by the weight-loss industry — suggests ads for low-nutrition foods get no tax deduction, ads for mid-nutrition foods keep current deductions, and ads for high-nutrition foods get up to triple deductions.

It’s unlikely to happen — the Association of National Advertisers called it unconstitutional — but it points up the scrutiny food marketers face from lawmakers.

Marketing regulation could be an election-year hot button. Presidential hopeful Sen. Joe Lieberman (D, CT) said in December that the Federal Trade Commission should study kids’ marketing; until then, Lieberman suggests, junk food ads should carry nutritional warnings similar to movie ratings, restaurants should post nutritional info on menu boards, and the U.S. Department of Agriculture should regulate school vending machines as it does school lunches.

In the U.K., the government may ban food and beverage marketing to kids if the industry doesn’t adopt stricter standards. The government’s Food Standards Agency is expected to issue recommendations this year. Industry trade organization Food and Drink Administration counters that the current code is enough, and food marketers abide by it.