Food Marketing and Its Impact on Health and Budget

View Transcript

Hi everyone. My name is Jennifer Youngblood, and I am a health educator with the health and preventive services department with Optima Health and Sentara Healthcare. And today we're going to have a really great educational PowerPoint presentation on food marketing and its impact on health and budget. So, we have a little agenda item here.

I thought, first, we would talk about food marketing; just of a general sense, how food marketing has evolved, food and marketing advertising to children, food marketing budget, and food marketing regulations in the United States.

So, food marketing. Before we get into the meat and potatoes of this presentation, I thought it would be important to just know the basics. So, before we jump head in, let's talk a little bit about the definition of food marketing. When we think of food marketing, a lot of different things come to mind. You're probably thinking about being in the grocery store aisle like this, and all the packages, advertisements, all the artwork kind of come together and just overwhelm you. But according to the American Marketing Association, marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that value for customers, clients, partners, and society at large.

Marketing is also a tool that can be used in ways that either promote or harm health. Marketing is a priority for success of any business from small scale, independent farms to multinational food manufacturers. Food marketing takes many forms and can involve building relationships with customers, raising brand awareness, developing new products, promoting them through advertising, and even paying grocery stores for prominent shelf space, all with the goal of promoting sales. And here is a little example of an advertising campaign for broccoli that was successfully increased broccoli sales and improved consumers perceptions of broccoli as a tasty and healthy food. And it was all about the cute little guy here holding the broccoli. So, their hope was that this would increase broccoli sales because if the dog ate the broccoli, then you would be more likely to eat it also. So, if that's the case, I posted a question here. Why are the US food marketing budgets overwhelmingly used to promote sales of nutrient poor products like sodas and sweetened breakfast cereals? Well, ya’ll ready? Adding value increases profits for manufacturers. Unfortunately, some of the most highly processed and nutrient poor products generate the greatest profits, believe it or not. And when we talk about added value, added value is the difference between the cost of manufacturing a product, and the price consumers pay for it.

It increases profits for food marketers and it's highly processed typically, and nutrient poor products that generate the greatest profits. And profitable products tend to get the most marketing attention. So, for example, we have the goat milk here that would cost around 3 dollars and 20 cents. However, if we processed it into60 ounces of goat cheese, it's going to raise that value to 16 dollars. Added value is the reason people pay 4 dollars for a box of corn flakes, perhaps, or convenience, taste, or an appealing cartoon animal on the box, even though the corn used to make it is worth only a few cents. This just goes to show that adding value increases profits for food manufacturers. And again, some of the most highly processed foods generate the greatest profits. Food marketing has a powerful effect on what people eat and ultimately their health. U.S. food and beverage manufacturers focus most of their marketing efforts on promoting sales of soft drinks, breakfast cereals, candy, snacks, and other nutrient poor products. In environments engineered to encourage purchases of these products, will power and knowing how to eat healthy, while important, are often not enough to stop people from indulging and eating those behaviors that increase their risk for diet related diseases.

I just want to go over quickly the types of marketing. We talked a little bit about what food marketing is and there's a wide variety of types of marketing if you do a quick Google search, but I found the main types of marketing that are mentioned on the National Advertisers Association. So first, we have the influencer marketing, which rather than marketing directly to a large group of consumers, a brand inspires or compensates influencers. So, we're really leveraging individuals and influencer marketing.

Number two is relationship marketing. Relationship marketing leverages database marketing, behavioral advertising, and analytics to target consumers precisely and create loyalty programs. So, this is basically strategies and tactics for segmenting different populations. Viral marketing is named viral because the number of people exposed to a message mimics the process of passing a virus from one to the other. And this is basically a marketing that facilitates and encourages people to pass along a marketing message. Green marketing, number four, is the development of presumed environmentally safe products.

Number five is keyword marketing. This is going to be a marketing where we place that marketing message in front of users, or we use specific key phrases that they are using to search to catch their attention. About last six, number six, is guerilla marketing. And this is from an unconventional and creative strategy, intended to get maximum results for minimal resources.

And throughout the presentation, you're going to hear a lot about product placement, price, product, and promotion. So, again, I thought I would take just a few slides here to explain what we call the 4 P’s of marketing. The 4 P’s of marketing, our product, price, place, and promotion, and we're going to go over each one quickly. Here, product is a bundle of attributes, capable of exchange or use, usually a mix of tangible and intangible forms. Two is the price which you'll hear a lot; the formal ratio that indicates the quantity of money, goods, or services needed to acquire a given quantity of goods or services. Place, or sometimes known as distribution, refers to the active marketing and carrying products to consumers. It's also used to describe the market coverage for a given product. Which brings us to promotion, which is number four. That includes tactics and encourages short term purchase Influence, trial, and quantity of purchase and are very reasonable in volume and share and profit. So, just a little history lesson there, and a little marketing lesson for you as we move forward with the presentation. Just some terms that I thought would be beneficial for you to be familiar with as we go through.

So, now let's talk about how food marketing has evolved. Big marketing has made a big shift. As the Internet becomes more ubiquitous in consumers everyday lives, consumers today have a wealth of information at their fingertips and can easily do in depth research on what is in the product, or how it is made. People are interested, not only what they're eating, but they like to know the background on the company that manufactured it; how the animals went into it, how they were raised, in the story, the food product and founders. So, we all like to research what we're eating. And then this quote here pretty much sums it up. About 30 years ago, marketing was more about what interests them as humans and how we can connect with them to make this product either desirable or deliver an experience that will last a lifetime. So, the marketing world and, specifically, food marketing has really changed over the last 30 years. Those lifetime experiences were harnessed by popular brands, aiming to target messages about different products and all the different stages they go through. Just a generation ago, a commercial for cookies targeted at children would get their attention. They use that same idea and that same commercial type, including cookies, years later to attract those same people that saw the commercial when they were younger. And it still would spike their interest 20 years later.

How creative is that?

And messages to moms were different. Baby boomers attempted to be super moms and do everything: work, take care of their kids, run the household and advertising targeting those moms focused on the process of meal preparation. The baby boomer moms placed a lot of trust in others to make decisions. And these women didn't have a lot of spare time to research. So, they left some of those decisions to others. If a baby boomer mom saw her child drinking a certain brand of apple juice at daycare, for example, she would be likely to keep buying that brand for her child. It eliminated the time of research and decision making that she had to invest, and she trusted that. When the baby boomer’s daughter became a mom, she drew on some of her own childhood experiences. Half of the moms in generation X grew up to divorce parents in separate households. Many of them are latchkey kids who went home from school to empty houses while their parents were working. People in generation X are used to doing things themselves, including their own research. Messages to these generation X moms focus on giving them something convenient that they can make independent decisions about. These moms grew up with convenient items like toaster pastries and so they are likely to want the same thing for their children. If more technology and knowledge information became freer and marketing content and messaging began to shift. Access to more information also had a major impact on the food industry in the 1990s and we saw a shift in the way people looked at food.

We had the Food Network, the cable channel that was founded in 1993. It was filling the airways with programs about cooking food, manufacturing and eating and we still see those shows today plus many, many, many more. Suddenly people were more interested in food in general. When social media came on the scene, it became central, not just in the lives of consumers, but directly with those brands who wanted to communicate with their customers. Marketing strategies are now premised on the assumption that custom consumers will be able to easily do their homework on their own products. It's all backed by access consumers have to knowledge. They are their own researchers and they are their own formulators of data. Social media gives us the opportunity to make marketing a 2-way conversation.

Moving on to food and marketing advertising to children. I know in the past, we did a similar presentation on this same topic or a topic very similar and some of our feedback included, um, that they wish we didn't talk as much about children. So, keeping that in mind while researching this presentation, I wanted to say that, um, a lot of this research, if you just do a quick Google search, um, provides a lot of information and the research is being done on children because children are the targets. If they can target these children, it molds them and shapes them into their adulthood. So, that's why a lot of the focus is on children, because that's where it all starts; the healthy choices or not so healthy choices and shopping and just overall giving that impression to a child when they're little. So just wanted to throw that out there as we move into this next section.

Research shows that marketing and advertising of high calorie, low nutrient foods and beverages increases the child's preference and intake of unhealthy foods and beverages. Unhealthy food marketing aimed at children and teens is a significant contributor to poor diet, quality, and diet related diseases worldwide or diet quality is a major cause of ill health contributing to those chronic diseases like heart disease, stroke, Type 2 diabetes and obesity. Youth who have cardiovascular disease risk factors, such as the high blood pressure, obesity and diabetes are far more likely to have these risk factors as adults. And this puts them at a greater risk for all sorts of diseases, but especially heart disease and stroke.

Children are regularly exposed to advertising and marketing through television, the internet, social media, magazines, schools, product placements, video games, cell phones and other means. Just many, many venues out there to advertise to kids. These advertisements are designed to boost brand recognition, sales, and loyalty more often for unhealthy, high calorie foods, Again, we can, we continue to hear that same theme, and unfortunately most of these products have excessive amounts of added sugars, salt and saturated fats as well, as inadequate amounts of fruits, vegetables, and grains. Promotion of these products is not limited to just advertisements. They also include promotions, product placements (there's those P words we talked about), celebrity endorsements and incentives.

Young children are especially vulnerable to these marketing and advertising strategies because they are developmentally less able to comprehend their intent. They just see these marketing as fun things to eat. They don't realize the, um, the long-term effects of these poor nutrients or high calorie foods.

So, the next time you go to the grocery, when you walk in, just think about a few things in store; location influences your purchase. I mean, who knew the proximity of categories to one another can influence purchases. Does store location influence your purchases? I have a picture here of an end cap with some sprite and different sodas. I have flowers here not necessarily on an endcap, but maybe at the front of the store as well as some children’s fruit chews with different marketing advertisements on the boxes. Does the end of the aisle display mean that something is on sale? Not always, but a lot of people will see these things on the end cap and purchase them because they're there.

Um, the store layout secrets. Did you know there's layout secrets to the store? Gosh, and there's banks in the store too. Did you know that the goal is to get more money in the hands of the shopper? So, by having a bank in the store, you can cash a check, deposit money, withdraw money, all those things. And then you're right there at the grocery so they feel that by having the bank inside the grocery, you’re more apt to spend money because it's there. They have flowers. Flowers are said to enhance the grocery or any sort of store when you walk in. It enhances the notion of fresh smelling; everything's nice and clean. The bakery, for instance, is going to get those salivary glands going, make you feel hungry, purchase them. Don't those cupcakes or whatever it is that smells so good as you walk past the bakery. And then, of course, those grab and go items that are always in near the checkout, or maybe near the entrance usually up front, so you're more apt to grab something as you walk in and place that in your car, or as you're checking out.

We also think about product placement. We talk about kid’s eye level again. We're marketing to kids, to children. Look at the sample here that I gave with the fruit chews, they look very, very close to the floor for some of us. We wouldn't notice those, but as a child, that's right at child's eye level. The 2nd and 3rd shelves are considered the bull’s eye zone and those are the leading brands. Manufacturers pay for the shelf space. I was amazed at that. I had no idea there was a whole science about placing items on shelves a certain way.

The top shelf is for smaller brands, regional brands, or maybe brands they don't have the budgets to pay for the favorable placement. So, they pretty much get what's left. And of course, the bottom shelf, a store and private label brands, oversized and bulk items if they're not items that are attracting children. So, there's a whole science on packaging, placement, and storage geography.

Let's talk a little bit about food marketing budget. Gosh, this this was amazing to me to find, um, what food companies spend on budgeting marketing. Food companies spend close to 2 billion dollars annually on advertising techniques, include use of characters, celebrities, cartoons, top giveaways, collectibles games Contests, and kid's clubs. Again, we're seeing a lot of, a lot of effort here to single out children and attract children. We're using celebrities, cartoons. I can think of Marvel characters, of Disney characters. You know, if there's a new movie out they might have a new skill to go with the movie or a new candy, or, you know, a type of cookies. Um, so it's just everywhere. However, the sad part is that only 10% of children’s food products are promoted that meet nutritional standards.

That's incredible. Thirty-million-dollar marketing budget spent on just one sugarcoated cereal. Wow. 50,000 dollars spent per state on nutrition education. You see the difference there.30 million dollars on marketing budget on one cereal. But, only 50,000 dollars spent per state on nutrition education. The federal government allows companies to write off expenses for marketing and advertising, unhealthy foods, and beverages.

Gosh, unbelievable. Now I'm going to talk a little bit about food marketing regulations in the United States. Although many countries across the world tightly control or ban advertising and marketing aimed at youth, that is not the case in the United States, surprisingly. In 1980, in response to corporate pressure, Congress removed the federal trades commission authority to restrict advertising. It’s crazy. In 2009, bipartisan legislation directed the creation of the Interagency Working Group, or the IWG, on food marketing to children to curb the marketing of unhealthy foods for children age 2 to 17 years.

Although the American Heart Association supported the IWG’s recommendations as being based on robust science, based nutrition principles, organizations pushed back saying the recommendations were unworkable and inconsistent with the Dietary Guidelines for Americans. Ultimately, their efforts failed. While the food industry is made strides in self-regulation through the Children's Food and Beverage Advertising Initiative, the program is not strong enough. There are still companies that do not participate. And many of the foods allowed to be marketed to children under these voluntary standards are still unhealthy. In 2018, the food and beverage industry spent 29 million dollars lobbying on food and beverage issues at the federal level.

So, we have a lot of work to do here and it seems like there's been a lot of initiatives or a lot of tips, gosh, in the past, what, 20 30 years to improve this marketing and nothing seems to work. Nothing has worked so far. Think about food labels. They tightened restrictions with food labels. Michelle Obama had tried to initiate the healthier children's lunch alternatives. So, there's been a lot of lot of money spent, and a lot of lobbying, for stricter regulations in the food marketing, but we're not quite there yet.

The American Heart Association supports policy change that limits the marketing and advertising of low nutrients, high calorie foods and beverages to the United States children. The association supports healthy eating research and recommendations for food advertising and marketing to children. The food industry should incorporate these recommendations into the children's initiative. Only healthy foods, such as fruit vegetables, low, fat, dairy products, and whole grains should be advertised in marketing to children.

Implicit in this recommendation is that foods that are advertised meet criteria that the association has set for nutrients that can affect cardiovascular disease such as added sugar, sodium, saturated fat, and fiber. The association also supports establishing nutrition standards for restaurant children’s meals and making the default options and kids meals healthier since having kids’ meals is a way that the restaurant industry markets to children.

Advertising and marketing and brand awareness strategies used by most in the industry should not be allowed in schools or placed in educational materials. The association supports robust food and beverage marketing standards in local school wellness policies. And that brings us to the end of our presentation today. I'd like to add a few final thoughts before we sign off.

Our nation can't be healthy until everyone is healthy. Is the food industry marketing food or marketing junk? And last, what are we paying for? Are we paying for our food? Are we paying for advertising? And I think you guys all know the answers to those questions. For the next time you're at the grocery store, just keep in mind, some of the things that we talked about and look for those things that we mentioned, and you'll be more aware of how things are placed, how the advertising and the food marketing industry works and everyone always asks, what can we do? What can we do to help? Of course, you can do your own research. You can choose to purchase what food you want and don't fall into the trap of that food marketing and advertising, and, you know, drawing in the different items to your children. Of course, you can always lobby and send recommendations to the state.

Those are some small ways that we can help in a big way. And last here I placed a list of resources for you. Um, the 1st one here is our Optima Health website and I will show you that here in just a second. We have for members under the wellness and prevention, I’m sorry, the health and wellness prevention and wellness Eating for Life. And I'll show you that here in a second. There's a wealth of information from videos to different nutrition options. And a great resource for all of you who might be interested, I also have the website for myplate.gov, um, healthy eating on a budget. This is a great tool.

Um, when you open up the website, there's 4 tabs and it doesn't look like there's a lot of information, but once you click on each individual tab, it gives you grocery shopping tips, meal planning tips, nutrition tips, tips for children. So, there is a whole wide variety of resources under that link. Of course, eatright.org is a big website that a lot of registered dietitians use for nutrition information and healthy eating. If you're interested, there's that website and the healthypeople.gov 2020 website. There's a ton of resources in there. You might even find a lot of information about restrictions and rules and regulations on nutrition on this site here.

So just thought I would provide a few resources there for you in case if you're interested in looking further. And last year, if you click on the Optima Health link that I posted in the previous slide, this is where it'll take you to the prevention and wellness and then underneath will have prevention and wellness and then I've circled here the Eating for Life link. This is where you'll want to click for all your nutrition information. There are tons of videos, resources, nutrition information, just a wealth of information, and, of course, don't limit yourself to just Eating for Life. As you can tell there are many, many resources listed here on this page and they're right at your fingertips.

I hope you enjoyed the presentation today. And if you have any questions, reach out and let us know, we'd be glad to answer. And have a great day. Thank you.