SOURCE: Packaged Facts

Packaged Facts

November 29, 2011 10:17 ET

The Carrot and the Stick: Health Concerns Are Transforming the Restaurant Industry

NEW YORK, NY--(Marketwire - Nov 29, 2011) - America's health issues have been well publicized, and consumer awareness of issues such as obesity and diabetes has increased considerably in recent years. For the foodservice industry, according to the just-released Packaged Facts report Health on the Restaurant Menu: Foodservice Trends in the U.S., the stages of attention being drawn to these health and nutrition issues, and then widespread awareness setting in, are now past. The restaurant industry is now undergoing transformation, driven in part by government pressures at the municipal, state and federal levels.

Obesity now accounts for 9.1% of all medical spending, up from 6.5% in 1998. An obese person spends $1,429 per year more on medical costs, or about 42% more, than someone of healthy weight. Costs for an obese Medicare recipient are even greater.

Obesity will continue to impose a significant burden on the health care system as long as the prevalence of obesity remains high. According to data from the Centers for Disease Control (CDC), in 2005-2008, the prevalence of obesity was 33.9% among adults age 20-74, up from 31.2% during 2001-04. With government cost cutting (including Medicare and Medicaid) on the table, the pressure to address obesity-related healthcare costs can only increase.

There is one simple reason for the rise in obesity: people take in more calories than they need, leaving them with excess calories stored as fat. Obesity trends mirror the rise in individual calorie intake, a trend that has only recently begun to reverse itself. The number of calories consumed has increased from 2,169 in 1970 to 2,594 in 2009, a 19.6% jump. However, calorie intake has actually dropped from the peak reached in 2002.

Moreover, according to David Sprinkle, publisher of Packaged Facts, the obesity trend is significantly influenced by socioeconomic factors, such as income level and race/ethnicity, that create complex questions for the food industry. There remains a clear relationship between household financial resources and diet perception: people who rate their diets as "excellent" tend to come from households with greater financial resources than those who rate their diet as "poor."

Black and Hispanic households have lower average household incomes and higher proportion of households at or below the poverty level. In poor neighborhoods across the United States, residents experience far higher rates of adult and childhood obesity than those in more affluent neighborhoods. Amidst poverty, scarcity, and food insecurity -- limited or uncertain access to sufficient food -- families struggle to keep food on the table. At the same time, many adults and children are overweight or obese.

But recent evidence suggests that change -- at least in the form of consumer self-awareness -- is underway. Historical research has shown that consumers tend to perceive that their diets are better than they are relative to widely accepted dietary guidance. During the past 20 years, however, consumers have become much less likely to rate their diets as "Excellent" or "Very Good" in terms of healthfulness, even though the healthfulness of the American diet has undergone little change over this period. According to Health on the Restaurant Menu: Foodservice Trends in the U.S., this finding implies that consumers may be becoming more receptive to dietary guidance.

As the nation struggles to combat the growing epidemic of obesity and obesity-related diseases, public officials, health professionals, and food industry participants are providing more and more information on the nutritional content of foods to help consumers choose healthier and truly nutritious diets. If a lack of specific information contributes to excess caloric consumption, then labeling in the away-from-home market may make it easier to moderate intake. Calorie labeling may help diners make healthier choices when eating out, or it may help them realize that they should consume fewer calories at other meals throughout the day to compensate for high-calorie meals away from home.

If the carrot of consumer education fails, society may increasingly turn to the stick. An Aon Hewitt survey released in June 2011 found that almost half of employers expect by 2016 to have programs that penalize workers "for not achieving specific health outcomes" such as lowering their weight, up from 10 percent in 2011.

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About Packaged Facts -- Packaged Facts, a division of, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, consumer packaged goods (including foods and beverages, health and beauty care, and household products), and pet products and services. Packaged Facts also offers a full range of custom research services. To learn more, visit: Follow us on Facebook, LinkedIn and Twitter.

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