12. Percent of U.S. Adults Overweight 64.5% 56.0% 46.0% 30.5% 23.0% 14.4% Source: Centers for Disease Control
13. Childhood Obesity in the U.S. Source: Centers for Disease Control 6.5% 5% 11.3% 10.5% 15.3% 15.5%
14. Food Expenditures – Nominal Dollars Total Food At Home Food Away From Home Source: USDA Economic Research Service http://www.ers.usda.gov/briefing/CPIFoodAndExpenditures/Data/table7.htm
15. Food Expenditures – Constant Dollars Total Food At Home Food Away From Home Source: USDA Economic Research Service http://www.ers.usda.gov/briefing/CPIFoodAndExpenditures/Data/table7.htm
16. Food Expenditures as a percent of Disposable Income Total Food At Home Food Away From Home Source: USDA Economic Research Service http://www.ers.usda.gov/briefing/CPIFoodAndExpenditures/Data/table7.htm
17. Food Expenditures as a % of Disposable Income vs. Prevalence of Adult Overweight / Obesity Source: USDA Economic Research Service / CDC NHSC http://www.ers.usda.gov/briefing/CPIFoodAndExpenditures/Data/table7.htm Obesity is defined as a BMI of 30+ % Overweight % Obese
18. Food Expenditures as a % of Disposable Income vs. Rate of Overweight Children in U.S. Food Away From Home Food At Home Total Ages 6-11 Ages 12-19
19. Foodservice Sales by Type of Outlet All Other Lodging Source: USDA Economic Research Service http://www.ers.usda.gov/briefing/CPIFoodAndExpenditures/Data/table17.htm Full Service QSR Education
20. Calorie Supply Per Capita Per Day Total Vegetable Animal Source: USDA Economic Research Service (Adult male requires 2800 calories)
21. Total Supply: Calories vs. Other Components Calories Grams Source: USDA ERS Per Capita Supply Per Day Carbohydrates +27% Calories +15% Total Fat +3% Protein +16%
22. Cost Per Calorie Current Prices 1988 Prices Source: USDA Economic Research Service Total Supply / Per Capita Expenditures
23. Cost Per Calorie Some studies suggest that the low cost of highly processed “unhealthy” calories contributes strongly to the obesity epidemic, particularly among lower-income segments. 580 $0.99 Big Mac 710 $0.99 Original Whopper 190 $.19 Ramen Chicken Vegetable 390 $.79 Kraft Macaroni & Cheese 150 $3.85 Fruity Pebbles AVG. COST PER CAL 80 $2.49 Wonder Light Wheat Bread 80 $0.69 Red Delicious Apple 230 $2.69 Atkins Advantage Bar 35 $1.59 Beefsteak Tomato Calories Cost Item
46. Causes of Obesity Source: The Hale Group, Ltd. More Calories Consumed than Burned Declining Food Costs Food Supply Chain Over-Capacity New Realities of Society, Family and Education Consumer Confusion – Diet Fads, Food Pyramid
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48. Tobacco History 1800 2000 Early 1800s – Cigarettes first introduced to U.S. 1864 – First Federal tax imposed WWI – Doctors praise cigarettes for helping soldiers relax and ease their pain Late ’40s – Early ’50s – Smoking first linked to lung cancer, other diseases
49. Tobacco History 1800 2000 1964 – S.G. report concludes smoking is a cause of lung cancer 1965 – Congress requires health warnings on cigarette packs 1969 – TV and radio ads banned 1973 – AZ first state to restrict smoking in public places 1979 – Smoking restricted in gov’t facilities 1988 – Smoking banned on short domestic flights 1990 – Smoking banned on all domestic commercial flights 1993 – Smoking banned in White House
50. Tobacco History 1800 2000 1994 – US tobacco manufacturers testify nicotine is not addictive and they do not manipulate nicotine in cigarettes 1994 – Mississippi is first state to sue industry seeking to recover medicated costs (settled 1997) 1996 – Liggett offers to settle class action suit by taking financial responsibility for related disease and death for first time 1998 – Industry approves 46-state Master Settlement Agreement for $206 billion (paid through 2025)
51. U.S. Cigarette Consumption Source: U.S. Tobacco Production, Consumption, and Export Trends, Report for Congress, Updated June 3, 2003 (Primary data source: USDA, ERS
52. Per Capita Alcohol Consumption (gals.) Source: USDA ERS 1980: MADD established
53. Per Capita Alcohol Consumption (gals.) Source: USDA ERS 1982: Presidential Commission on Drunk Driving
54. Per Capita Alcohol Consumption (gals.) Source: USDA ERS 1984: Federal “21” minimum drinking age enacted
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56. Implications For Food System So, who will voluntarily trim sales to accommodate lower calorie requirements?
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62. Innovation Innovation . . . a winning strategy to create sustainable profitable growth 1982 1995 Market Value Top Tier Innovators 24.5% Return S&P 500 Bottom Tier Innovators 8% Return The Innovation Premium Historical Market Value
68. Expectations Exceed Growth For many manufacturers, growth mandates targeted acquisitions and alliances . . . Growth Expectations 8 – 10% Growth Gap 3 - 7% Foodservice Industry 2 - 5% 10% 5% 1990 1995 2002 Years Change in Sales Growth Source: The Hale Group, Ltd.
69. The Strategic Planning Matrix Existing New Existing New Products Customers Status Quo Innovation Customer Acquisition Acquisitions & Alliances A Useful Framework to Structure Strategic Thinking $$$ Future Goal
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73. The Foodservice Manufacturer Response Internal Strategies Contain costs & maximize revenue Shift focus from obesity to wellness Source: The Hale Group, Ltd. Customer Strategies Product Strategies
