Lower calories, higher profits for food companies

Food brands have taken trillions of calories out of their products, and products deemed more nutritious are boosting profit margins. But have diets actually changed?

What would a 6.4 trillion-calorie reduction look like if we were looking at the US shopping cart? It would be like taking 42.6 billion cans of Pepsi, 23.7 billion Butterfinger bars, or 106.6 billion cans of Campbell's chicken noodle soup off the grocery list.

A group of the best-known food brands in the United States has collectively cut more than 6.4 trillion calories from shelves over the past three years. Whether the move has actually changed consumers' diets has yet to be seen, experts warn. The effect on food companies' financial reports, however, is a little clearer: Products perceived as "better for you" have been a key force driving profits in recent years.

The calorie reductions came from 16 companies that make up about one-third of the nation's food market, including Nestlé, PepsiCo, General Mills, and Campbell Soup. In 2010 the companies originally pledged to cut 1.5 trillion calories by 2015 as part of the Healthy Weight Commitment Foundation (HWCF) and the Partnership for a Healthier America (a wing of first lady Michelle Obama's "Let's Move!" campaign).

The 16 companies were held accountable by researchers at the University of North Carolina at Chapel Hill – funded by the Robert Wood Johnson Foundation (RWJF), a nonpartisan health nonprofit, which tracked food sales from 2007 to 2012.

The calorie reductions were both woven into everyday products, such as Quaker rice cakes, and rolled out in new products, such as Gatorade's low-calorie drink G2 and Frito-Lay's baked potato chips. Overall, the reductions translate to about 78 fewer calories sold per US citizen per day.

Numbers like those don't come around every day, according to James Marks, senior vice president and director of the Health Group at RWJF.

"We made sure the researchers did the calculations correctly," Dr. Marks says. "To some that might not sound like a lot, but that is a large portion of the estimated excess calories per day," he says. It's about one cookie per day, or half the excess calories that the average US 10-year-old was consuming in the 1990s, according to the foundation.

Companies also made another discovery: "Better" food sells. A 2011 study from the Hudson Institute, a Washington-based think tank, found that foods perceived to be more nutritious drove more than 70 percent of sales growth between 2007 and 2011.

"Better" food also resonated well with customers: Reputation ratings for companies that sold such foods were, on average, 30 percent better than competitors that don't include many such foods in their product lineups.

"You saw this shift occurring where everyone started driving toward specific changes, and suddenly the whole market shifted," says Lisa Gable, president of HWCF.

She calls the recent calorie drop and sales numbers the product of a "perfect storm" of factors, in which consumers demanded healthier options, food companies responded to these demands, and food scientists developed innovations that have helped low- and reduced-calorie foods taste better than ever before.

For example, since 2005 General Mills has "improved the health profile" (e.g., lowered sodium, added vitamins, increased fiber) of products that count for 73 percent of its annual retail sales. Some of those innovations have really paid off: The company's Yoplait Greek 100, a lighter version of its Greek yogurt offering, made $150 million its first year, the most profitable Yoplait debut in 20 years.

Calorie counting and revenue aside, these numbers don't tell the whole story. The study results are still waiting for peer reviews, but will likely be published later this year. Publishing study results without releasing the data to back it up is not standard procedure, says Margo Wootan, director of nutrition policy at the Washington-based Center for Science in the Public Interest.

"What's unclear is exactly how that happened and ... how much of this decrease is due to proactive efforts on the part of the food industry versus changes in consumer tastes and trends," she says.

The study started measuring calories in 2007, she notes, two years before the initiative began, and two years before the recession hit consumer spending.

This could account for less food being bought overall. She also questioned whether people were substituting cooking at home with eating out as a product of busier lifestyles.

However, she says that anything that takes away calories and challenges people to think about portion sizes is a step in the right direction.

"Little 100-calorie packs of cookies are not apples, but it does make it easier for people to control their portion sizes, and pre-portioned snack foods make it easier for people to manage their portion control," she says.