Junk food companies are trying to survive with an unlikely strategy
As Americans become increasingly invested in health and nutrition, some of the most infamously unhealthy companies are trying to regain their trust by encouraging consumers to eat — and buy — less junk.
Mars Foods, a subgroup of chocolate giant Mars Company and maker of brands including Uncle Ben's rice and Dolmio pasta sauce, announced in April that it would provide customers with guidance on which products should be eaten every day and which should only be consumed occasionally.
Further, Mars actively discouraged consumers from eating some of its products too often — like pasta sauces that are high in sugar – an idea that, at first, seems to run counterintuitive to any business's best interests.
However, Mars Foods isn't alone in this endeavor.
Soda giants Coke and Pepsi are both using reverse psychology on consumers and shareholders, as well.
While the sheer volume of soda that Americans drink is decreasing (the total volume of soda consumed in the US dropped 1.2% in the last year, compared to a drop of 0.9% in 2014, according to Beverage Digest's annual report), both soft drink behemoths are quick to emphasize that the number of bottles and cans that consumers are buying is increasing. Companies like Coke can make more money selling smaller bottles than they can selling larger ones.
At the same time, cutting down on the size of packaging is key to getting brownie points from nutrition and anti-obesity advocates.
It's a savvy trick: by serving smaller cans and bottles, Pepsi and Coca-Cola are able to fulfill the America Association's pledge to cut calories by 20% without necessarily cutting sugar from the recipe.
The trend of publicly proclaiming health initiatives that seem counter-intuitive to companies' goals of selling as many (often unhealthy) products as possible is becoming a common one in the food and beverage industry.
Nestlé and Mars Foods both recently announced plans to cut sodium from their foods, in addition to coming out in support of the FDA's efforts to release new voluntary sodium targets.
Fast-food chains have similarly announced initiatives to remake menus. Chains such as Papa John's, Pizza Hut, and Subway are cutting artificial ingredients from food. Taco Bell stealthily completed an initiative to cut sodium from the menu by 15%.
However, for many companies, charging more for less or remixing recipes to boost nutrition isn't enough to boost sales. Instead, these companies are investing in health-centric products that have traditionally stood in direct contrast to junk food.
PepsiCo CEO Indra Nooyi said in April that less than 25% of the company's global sales are from soda. Rather, the company is increasingly focusing on healthy snacks and non-carbonated beverages — a process the company calls "future-proofing."
Hershey, best known for its chocolate, has acquired brands such as Krave jerky and launched its own healthy snack line called SoFit. The reasons for the health-centric changes, according to the company, are customers' changing relationship with food, increased interest in ingredients, and the rise of "better-for-you" snacks.
Nestlé is taking the move towards health a step farther, majorly investing in the nutrition and health science business and creating medicines to treat issues such as malnutrition, digestive health, and even acute kidney injury, reports Bloomberg. From 2013 to 2015, the company's nutrition and health category has grown 25% in revenue, while its confectionery revenue has dropped 14%.
But the apparently altruistic actions may be rooted in the cold, hard reality of sales: many of these companies have suffered.
First, saleshaveslumpedas consumers have moved away from companies' most famous products — soda, chocolate, and other junk food. Second, because of the companies' close association with these less-than-healthy products, some consumers have become wary of anything the companies sell.
"Better-for-you" options have already proven to be bright spots in the portfolios of companies like PepsiCo and Hershey. However, only time will tell if these junk food giants will be able to divorce themselves from their negative reputations and regain consumers' trust.
And publicly encouraging consumers to eat less of products perceived as unhealthy (something Americans are already doing) allows the company to reclaim the narrative and hopefully win back lost customers. Though few companies are as direct as Mars Foods in defining which foods should or should not be eaten every day, these efforts may provide chances at gaining the trust of consumers again.
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