Wednesday, August 27, 2003

Food oligopolies need to get in shape According to a recent New York Times article ("It's a Fat World, After All", July 20,2003), big American food oligopolies are facing new problems as they expand internationally and expand waistlines. It's not just lawsuits by the self-declared victims of food marketing in the U.S.; it's also a matter of regulation in other countries. Food companies grow by selling to more people or convincing existing customers to eat more. 'They don't have a lot of potential for expansion in the United States,' said Marion Nestle, chairwoman of the nutrition and food studies department at New York University …Because of that, she said, Americans are exporting the salty, sugary foods they are known for and undermining the generally healthier eating habits of other countries. But while FDA regulations are getting softer in the U.S. (thanks to the anti-regulation crusade in the Bush administration), European countries are staring to put into place more stringent nutrition rules, nit only for labeling, but also for dictating food content. For this reason, companies like Kraft, Kellogg's, and McDonald's are scrambling to come up with "healthier" versions of their products, a big move away from loading in the crowd-pleasing transfats, calories, and carbs. They have to develop foods that please the regulators and the consumers. And there's the kicker, according to a recent study by an investment bank, the advice is that "companies that cannot spend the money to develop healthier produce should consider acquiring them." It's an interesting trade-off. To build their multinational market presence, food oligopolies will have to change their way to doing business, for the better. This may be a good opportunity for small companies with good ideas to sell out to the big guys. Of course, it might make even more important the push to newer markets in East Europe, Asia, and Latin America, that don't have the European emphasis on regulation. 5:31:39 PM

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