• Selling healthy food is more profitable?

    I read an RWJF report yesterday that made me smile. It turns out that companies that sell foods that are better for you made more money than companies that did not. Healthier foods included “no-, low- and reduced-calorie items, such as flavored waters or diet sodas, as well as products that generally are perceived to be healthier, such as yogurts and whole-grain cereals.”

    The differences were pretty impressive. Companies with a higher percentage of sales in healthier foods:

    • showed a 50 percent growth in operating profit, as compared with just over 20 percent growth for the other companies;
    • outperformed the S&P 500 Index by 60 points on average, compared with roughly 40 points for the other companies;
    • delivered returns to their shareholders that were 15 percentage points higher than those generated by companies with lower sales of BFY items; and
    • recorded reputation ratings that were more than 30 percent higher than those of companies with lower sales of BFY items.
    It’s generally hard to make people change their behavior. It’s nice to see (1) that people are buying more and more healthier foods and (2) that companies may see a financial incentive to sell more healthier foods. It’s hard to see a downside here.
    • Just glad this wasn’t stimulus money wasted on a study that said Cheerios, Wheat Thins and Campbell’s Tomato Soup were “better for you” than Frosted Flakes, orange juice (processed I think they mean and mayonaisse. I think my mother told me that 60 years ago. Wish I took her advice. The report would be more interesting if they actually ranked the companies but probably couldn’t do that because the research funding was coming from those companies.

    • These foods are making more profit because they go to higher-income people who are willing and able to pay a premium for (perceived) healthiness! The model is not scalable to the entire population, ergo this isn’t really a solution or a map to one.

    • My question would be about their margins. Is healthier food really more expensive or is it a marketing illusion? I know that Whole Foods does make a higher margin than the standard grocer (2% vs. 1.5%)

    • Did you see the recent report on vitamin E:


      What makes you so sure that you know what are healthier foods ?

      • That is referring to isolated Vitamin E in a capsule or tablet, not naturally occurring in vegetables. Healthier foods in this report is referring to lower fat, lower sodium, lower sugar foods, since most of our food-related issues in America have something to do with obesity and chronic disease.