How Free-Market Forces Are Fighting Obesity--and Can Be a Model for Industries Far Beyond Food

This article is by Hank Cardello, a senior fellow at the Hudson Institute, a consultant on socially responsible products and practices, and the author of Stuffed: An Insider’s Look at Who’s (Really) Making America Fat.

The knives are out for the food industry, and they are getting sharper by the week. Not since Upton Sinclair exposed the meat packers in 1906 have America’s food companies been the target of so much public outrage. A new book, Salt, Sugar, Fat, by Pulitzer Prize-winning reporter Michael Moss, contends that big food companies engineered junk food to get us hooked on it. Two other new books,Pandora’s Lunchbox, by Melanie Warner, and Foodopoly, by Wenonah Hauter, rail against Big Food as well. That’s not all. A widely read New York Times column by former Kraft Foods executive Michael Mudd charged that the industry’s business models “put profits over public health.” And New York City Mayor Michael Bloomberg has vowed to continue his fight against oversized sugary drinks.

These revelations give activists new reasons to clamor for new taxes and restrictions on the $1.25 trillion U.S. food industry. But it might surprise them that one organization—involving the White House, health advocates, and business—is already moving the needle in the right direction without legislation, lawyers, and lobbyists. The group, the Partnership for a Healthier America, is a model of how activists and every industry should try to resolve their differences and make an impact. Its novel approach: getting the free market to help solve a societal problem in which it plays a role.

PHA is laser-focused on childhood obesity, which affects an estimated 18% of all U.S. children. The group has assembled a broad range of business leaders, health and fitness advocates, and thought leaders to find solutions. It is nonpartisan; its leaders include First Lady Michelle Obama as honorary chairman, former Republican Senate Majority Leader Bill Frist, and Newark Mayor Cory Booker. Its members include major health insurers such as Kaiser Permanente, mega-retailers like Wal-Mart, and food companies like Darden and Birds Eye Foods.

In his March 16 Times opinion article, Mudd, a former executive vice president of global corporate affairs for Kraft Foods, derided food industry-sponsored public health programs as “posing for holy cards.” They are public relations initiatives that distract the public from the industry’s dastardly deeds and a rogues’ gallery of products, he opined.

But that’s not what PHA stands for.  As Sam Kass, senior White House policy adviser on healthy food initiatives, told me, “We will only solve the obesity epidemic if the food industry takes substantial action toward a healthier marketplace, which is increasingly what consumers are calling for. We have seen some exciting progress but we have a long way to go. PHA is a serious effort to get the food industry behind a solution.”

PHA is already getting results. Among its most impressive so far: dramatically expanding access to fresh fruits and vegetables in “food deserts,” areas of the country where 23 million people have only convenience stores and fast-food outlets nearby. PHA partners have so far expanded access to more than 500,000 people and opened or renovated 141 stores. They aim to eliminate the food deserts for 10 million Americans by 2016. PHA members have also removed French fries from day care centers and some chain restaurant children’s menus, and started exercise programs for nearly 3 million children.

Why is PHA working? It believes strongly in putting market forces to work to alleviate childhood obesity, but also it does not kowtow to any of its members. Like the best chief executives, PHA expects its members to set concrete goals. It then measures how well they reach them and publishes the results in an annual Progress Report.

I observed PHA in action, speaking at its summit in early March, along with Ms. Obama and representatives from health care, the food and restaurant industries, academia, and government. Their approach should be imitated by every industry whose products and practices are under fire, and by activists who want to achieve their goals more quickly.  Here are some key lessons from PHA for any industry:

• Don’t shame and bludgeon the other side. As we’ve learned from 100 years of activist-vs.-industry wars, when one side is demonized, progress can come to a halt.
• For businesses: Acknowledge the problem and address the role that your company may be playing. Major companies like Darden, Wal-Mart, Walgreens, Hyatt, and Birds Eye, as well as other large regional firms, have committed to make real change to help solve the obesity problem through PHA. Across four of its restaurant chains, Darden Restaurants Inc. (an $8 billion company; NYSE: DRI) has established specific nutrition standards for meals that children will enjoy and will simplify their parents’ search for healthier options. Drew Madsen, Darden’s president and chief operating officer, shared with me that “PHA is an effective partner in working with us to deliver greater choice and variety for our guests and helping address childhood obesity and children’s health.”
• For the activists: Don’t demonize capitalism; celebrate it. Accepting an industry’s need to increase sales and make a healthy profit will make it far easier to get that industry to listen to you. Few companies can afford to alienate shareholders. But if activists and an industry look for creative solutions to a problem, both sides can get what they want.
• For regulators: Don’t mandate change; demonstrate the benefits of it. Gather the facts that show an industry how delivering healthier products will deliver a better bottom line. Fortunately, lower-calorie, better-for-you foods have been shown to deliver higher profit and sales growth for companies. That’s a key selling point in getting food and restaurant companies to shift to them. One PHA partner, Birds Eye, started a campaign that cleverly marketed vegetables to children. The company said sales rose as a result.
• Keep a report card to maintain accountability. Set goals that are measurable, realistic, acceptable to both sides, and available to the public. Then track progress. An outside agency tracks PHA member companies’ progress.

PHA’s free-market approach has achieved real results. It’s a playbook that should be read by every industry and activist group that are at war or about to start one.