Between the 1960s and 1980s, the percentage of overweight children in the US hovered around 6%. Since 1980, the rate of obesity in children aged 6 to 11 has more than doubled, and the rate in adolescents has tripled to 16%. Currently one child in five is overweight. The increase is in all age, race and gender groups. The main culprits are the same as those for adult obesity: eating too much and moving around too little. Almost half of children aged 8-16 years watch three to five hours of television a day. Kids who watch the most hours of television have the highest incidence of obesity, not only because little energy is expended while viewing but also because of concurrent consumption of high-calorie snacks. Other factors of obesity are: poor nutritional habits, life style, heredity.
Since obesity in kids is now epidemic in the United States, Kraft is taking a stand and addressed the issue by banning some food ads targeting children and by introducing healthier food for children (lower content of fat and sugar). Under Kraft’s new policy (at work since 2003), any product advertised on a TV show where more than 50% of the audience is under 12 (as measured by Nielson Media Research) has to meet the nutritional standards set by the company.
The new line of conduct brought a wave of panic in the food industry, in the media, which rely heavily on consumer products for advertising income and among Kraft executives who were concerned with the potential sales loss. According to Kraft employees, some estimates of the initial impact hovered at around $75 million in lost profits. Perhaps the introduction of healthier products is not happening fast enough or maybe, the response from consumers to switch to new products is and will be lagging behind, with the exception of the LOHAS customers?
Top executives at Kraft might have been guided and haunted by another vision. The one that took the tobacco companies by surprise, in a wave of law suits and huge sales decrease. Kraft’ sister company is Philip Morris USA (Altria group), which disputed for years a body of evidence: the link between tobacco and cancer. Kraft, avoiding Philip Morris’s initial mistakes, is taking control of the discussion about marketing to children. Per Sarah Ellison’s interview with Roger Deromedi, CEO, Kraft felt that inaction might invite a greater threat. The company could eventually be depicted as a corporate villain! Deromedi admits that “they have learned from Altria”.
The fact remains that the Kraft group is shaking up the industry towards a healthier marketing practice. Many channel distribution and marketing channels are affected by its decision but the cause is serious enough to play a “thought leader”. It might very well benefit Kraft in the long run.