A Not-So-Smart Balance for Your Portfolio

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If you think the organic-food movement is just a foodie fad, think again. Organic sales have been growing at a steady 18% clip per year for more than a decade.

Along the way, Michael Pollan's books have become mainstays on the New York Times best-sellers list. And as the public has gotten educated about where its food comes from, the landscape of the industry has undergone a marked transformation.

It was with surprise, then, that after reading Pollan's In Defense of Food I found myself thinking that companies such as Smart Balance (NAS: SMBL) , which manufactures "heart healthy" products, or Herbalife (NYS: HLF) , which makes nutritional supplements, could actually be in the crosshairs of this movement.

But first, the usual suspects
I'll get back to Smart Balance and Herbalife in a minute, but first I want to make clear how influential this food movement can be. Remember all those "Supersize It" commercials we saw McDonald's (NYS: MCD) running back in the 1990s? They disappeared shortly after the release of Morgan Spurlock's documentary Supersize Me, which showed just how unhealthy the chain's food was when Spurlock attempted to eat nothing but McDonald's for a month.

It's no coincidence that shortly after the documentary, McDonald's started offering healthier-sounding alternatives, like fruit and yogurt parfaits and its Real Life Choices program.

Similarly, Yum! Brands' (NYS: YUM) Taco Bell was recently in the spotlight over health claims regarding the content of its beef. And though the company won in court, it took a serious hit in the court of public opinion.

It hasn't just been the fast-food chains to take hits, either. In 2009, Pollan contributed to the documentary Food,Inc., which showed how agribusiness conglomerates such as Monsanto (NYS: MON) and Archer Daniels Midland (NYS: ADM) have fueled the epidemic of obesity and heart problems in the United States and abroad.

What should we eat?
Pollan's book doesn't mince words: The near-obsessive focus on nutrients in American society is actually leading us to poorer health.

In 1977, George McGovern's Senate nutrition committee was forced to avoid telling people to eat less red meat and dairy products. The dairy and meat producers from McGovern's home state of South Dakota wouldn't have it. Instead, the committee told people to avoid the nutrients from dairy and red meat that were unhealthy, without actually mentioning red meat or dairy.

With that move, Pollan argues, we began to view food as simply a means by which certain nutrients were delivered to our bodies. And though, in a sense, that's true, the oversimplification of the process has led to a gross misunderstanding of what we're eating.

Whole foods vs. processed foods
Pollan calls the method behind this misinformation "nutritionism" and says that "one of the most troubling features of nutritionism ... [is that] any qualitative distinction between whole foods and processed foods is apt to disappear."

If you sit back and think about it for a second, this is cause for alarm. We humans have been on Earth for literally millions of years, and for 99% of that time, we've been perfectly healthy eating whatever the earth provides for us. Otherwise, we wouldn't still be around.

It is only recently that our bodies, which are evolutionarily designed to eat whole foods, have been inundated with processed foods. Clearly, something has to give, and based on recent statistics, that "something" is our health.

So what's the point?
Which brings us back to Smart Balance, Herbalife, and others that are trying to engineer healthy supplements. Though their intentions seem well placed, the packaging of different vitamins and minerals in forms that nature doesn't naturally provide just adds to the list of processed foods being marketed at us.

Smart Balance's best-selling products are its buttery spreads, which come in varieties that have calcium, flax oil, Omega3 fatty acids, and extra virgin olive oil infused in them. Herbalife offers weight-management, energy-enhancing and heart-healthy supplements. And though both of these types of products intuitively seem good for us, we're slowly learning otherwise.

For example, Jaakko Mursu, the lead author of a study recently published in the Archives of Internal Medicine, said his team's findings "add to a growing collection of research showing that people who take dietary supplements are getting few health benefits in return."

And before dismissing the thoughts of Pollan, Mursu, and others, remember this: Customers of companies like Smart Balance and Herbalife are a health-conscious and educated bunch. Though the winds of nutritionism tend to shift every few years, the difference between whole and processed foods isn't going anywhere soon. As this realization trickles back down to customers, consumption patterns will change.

That's why I plan on benefitting from the organic-food movement the only way I can see how: by putting my money into Whole Foods (NAS: WFM) . Though the company offers varieties of Smart Balance products (for shame!) in its stores, Whole Foods' focus on local, organic food aligns it with the only thing that's remained a constant in the food movement for the past 20 years: the benefits of eating what the earth naturally provides.

If you'd like some more food for thought about health care and consumer goods stocks, I suggest checking out our newest special free report: "The Shocking Can't Miss Truth About Your Retirement." The report will detail how an investment in certain funds, ETFs, and health-care and consumer-goods stocks can help you maximize the money you have ready for retirement. The report is yours today, absolutely free!

At the time this article was published Fool contributorBrian Stoffelowns shares of Whole Foods. You can follow him on Twitter, where he goes by@TMFStoffel. The Motley Fool owns shares of Whole Foods Market and Yum! Brands.Motley Fool newsletter serviceshave recommended buying shares of Yum! Brands, Whole Foods Market, and McDonald's and creating a synthetic long position in Monsanto. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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