the next big leap in packaged food

There’s never been a more opportune time here in the US for packaged food companies to make their products healthier.

Data from the US Centers for Disease Control and Prevention, more than 40% of Americans are obese and many struggle with comorbidities such as Type 2 diabetes, hypertension, heart disease and cancer.

The ultra-processed foods that make up the bulk of the US diet are among the major culprits, according to an increasing number of government, academic institution-affiliated and independent nutrition experts, including those at an online panel hosted last month by Harvard University’s T.H. Chan School of Public Health.

The symposium discussed why the processing of packaged foods that dominate the centre aisles of the grocery store may be driving the weight gain seen in the US and was one of an increasing number of events shining a light on ultra-processed foods and the industry that produces them. The Harvard panel was moderated by journalist Larissa Zimberoff, whose book Technically Food: Inside Silicon Valley’s Mission to Change What We Eat is drawing the attention of consumers and public health experts.

The introduction of the GLP-1 class of diabetes drugs, including Ozempic and Wegovy, and the outsized publicity they are receiving are adding to the scrutiny of the obesity problem in the US, how it is contributing to the deteriorating health of so many Americans, and the role ultra-processed foods are playing.

A nuanced view of ultra-processed foods

At the Harvard symposium, Kevin Hall, senior investigator at the National Institute of Diabetes and Digestive and Kidney Diseases at the NIH, said initial research he’s leading into diets high in ultra-processed foods shows strong links to an overconsumption of calories.

He outlined a paradigm packaged foods companies are going to be hearing a lot more about. According to Hall, “ultra-processed foods are one of the four categories of something called the NOVA classification system” developed by the School of Public Health at the University of São Paulo, Brazil.

Category 1 comprises minimally processed or unprocessed foods like fresh fruits and vegetables, poultry, and eggs. Category 2 includes “processed culinary ingredients” such as sugar or salt that you add to Category 1 foods to make dishes. Category 3 processed foods are a combination of Categories 1 and 2, such as canned beans or vegetables, cured meats, fresh bread and cheeses. Category 4 ultra-processed foods are everything else: packaged snacks, frozen TV dinners, protein bars, pastries, and more.

Physicians and other medical professionals are increasingly advising their patients with diabetes, hypertension, heart disease and the like to focus their diets primarily on Category 1 foods.

Hall, as well as others at the Harvard symposium, made a point to note that not all ultra-processed foods are necessarily equally bad. He said his research team is conducting a follow-up study that aims to look at different qualities of ultra-processed versus whole foods, including energy density, palatability and portions.

Another researcher, Josiemer Mattei, the Donald and Sue Pritzker Associate Professor of Nutrition at the T.H. Chan School, agreed with Hall. Mattei said she too is seeing evidence in her research that some ultra-processed foods might have a higher risk of disease and chronic disease than others.

The comments suggested a thoughtful research approach to ultra-processed foods is being taken. Contrary to what some food company executives believe, the foods aren’t automatically being demonised.

Nevertheless, despite this caveat, Mattei argues for the lowering consumption of ultra-processed foods across the board. She says research suggests the “higher consumption and higher intake of ultra-processed foods overall was associated with higher risk of eventually developing Type 2 diabetes, and more emerging evidence coming with cardiovascular disease, especially for coronary heart disease”.

All the panelists at the Harvard symposium agreed that obesity and negative health outcomes have risen alongside the consumption of ultra-processed foods.

This isn’t an isolated consensus. The majority of physicians and health and nutrition experts in the US say the same thing.

There’s also majority acceptance today among consumers, the media and public interest groups that obesity and negative health outcomes have risen alongside the consumption of ultra-processed foods.

Based on my research, the majority of US consumers want to buy and eat healthier food, including healthier ultra-processed food products. 

A recent survey conducted by the Harris poll is illustrative of the latter. More than two-thirds of respondents (67%) said they are willing to pay more – up to $3 more in some cases – for healthier, ultra-processed foods.

The opportunity for Big Food

My analysis is that we’re at an important inflection point in the US packaged foods market.

First, the tide has shifted from primarily defining healthy foods as those produced using organic growing methods or non-GMO – which has been the case for decades – to defining healthy foods as those that are processed the least. Heart disease, for example, is the number one killer in the US, not pesticide or GMO poisoning. Diet and exercise matter most when it comes to longevity and quality of life.

This shifting tide will eventually lead to a paradigm shift in the industry. This new paradigm is the producing and marketing of healthier packaged food products across the board, including healthier ultra-processed foods.

It’s also going to result in the elevation of various product types to higher positions in their respective categories. In fact, it’s already happening. In the snack food category, for example, nuts and popcorn, both healthy snacks, are on the ascendancy. Peanut butter and almond butter, both deemed heart-healthy foods, are booming.

And when it comes to alternative proteins, it’s not plant-based meat, which in most cases is highly-processed, that’s on the rise – quite the opposite is the case – but rather less-processed foods like beans, legumes,  mushrooms and the like, including branded products in various categories made from these ingredients.

The next big leap in the packaged foods industry is going to be the creation of significantly healthier products, including healthier ultra-processed foods.

I’m not talking about the around-the-edges approach we call “better-for-you” either. Instead, I’m talking about a truly paradigm-shifting approach to healthier packaged foods. We’re seeing green shoots of what I describe above, for example, in the food as medicine movement among a handful of big brand and emerging brand packaged foods companies.

Major packaged food companies have historically ceded nearly all of the major paradigm-shifting developments – organic, premium, better-for-you, etc. – to early-stage and emerging businesses, instead getting in the game via M&A.

The opportunity I describe – the creation of a new class of truly healthier packaged foods, including healthier ultra-processed foods – is too big for the majors to avoid. They are the companies that make most of the ultra-processed foods and therefore are the ones in the crosshairs. Those crosshairs will only get sharper.

GLP-1 drugs have the potential to turn the packaged foods business on its head, particularly if they’re approved for direct use for weight loss. Usage will then rise because the cost will come down and private health insurance, Medicare and Medicaid will cover their cost.

The damning scientific evidence that ultra-processed foods are a major contributor to obesity and all the health ills it brings people is eroding consumer faith and trust in the packaged food companies behind them.

The business case for creating healthier packaged foods, including healthier ultra-processed foods, is there. The major companies that become the first-movers will be the winners.

It’s also where the big opportunity for start-ups is, rather than in cell and plant-based meat, which is where investors continue to invest way too much money.

Developing truly healthier versions of what Americans like to eat is the right thing to do from a public health perspective. It’s also a prescription for profit.