With a busy week behind you and the weekend within reach, there’s no shame in taking things a bit easy on Friday afternoon. With this in mind, every Friday TriplePundit will give you a fun, easy read on a topic you care about. So, take a break from those endless email thread and spend five minutes catching up on the latest trends in sustainability and business.
American eating habits have been the joke of the world for years. The fat, lazy American filling up on junk food and soda proved to be both a punchline and an unfortunate reality. But if recent trends are any indication, the American food industry may be changing for the better.
As consumers become more conscious about calories and wary of mysterious ingredients, food and beverage companies are forced to take notice — and take notice they have: in the form of healthier options and expanded corporate social responsibility (CSR) programs. So, are Americans really ready for a turnaround when it comes to food? These five signs point to yes.
1. Old favorites feel the pinch
Long gone are the days of Americans chowing down on double cheeseburgers and extra-large sodas in their SUVs. Sure, drive-thru joints are still popular with some, but fast food and soda companies are seeing sales drop in the U.S., leaving them scrambling to regain market share.
Case in point: Each American consumed roughly 56 gallons of soda — the equivalent of 1.3 oil barrels — every year in 1998, Bloomberg Businessweek reported. In contrast, Americans now drink around 450 cans of soda annually (roughly 42 gallons), the same as they did in 1986. Likewise, fast food chains like McDonald’s are seeing sales plummet, worrying executives and shareholders alike.
In an attempt to win back favor with consumers, fast food and beverage companies are rolling out more health-conscious options — from Coke and Pepsi’s stevia line to McDonald’s ‘artisanal’ buns. But the question here is: Will it be enough?
2. CSR leaders take first place
While companies once synonymous with American eating habits — like Coca-Cola and McDonald’s — take sales hits, modern and progressive alternatives are stepping into first place. Often cited for its industry-leading minimum wage of $10.50 an hour, In-N-Out Burger has one of the highest per-store sales in the business. And while the company doesn’t franchise, leading to fewer stores and more modest systemwide sales, many investors admire its slow, steady expansion.
Likewise, Chipotle — the fast-casual Mexican chain that’s taken the lead on everything from local ingredients sourcing to supply chain transparency — has seen sales surge: The company raked in more than 4.1 billion last year, compared to 3.2 billion in 2013, which amounts to a 27 percent increase. Comparatively, McDonald’s saw its U.S. sales drop 4 percent in February alone.
3. Transparency becomes a must-have
As American diners become more conscious about what’s on their plates, transparency is no longer optional for food and beverage giants. In response, we’re seeing companies roll out sustainable sourcing policies for ingredients like seafood and palm oil.
Beyond that: More than two-thirds of supply chain executives surveyed in PwC’s 2013 Global Supply Chain Survey said sustainability will play an important role in managing supply chains through 2015 due to the potential to improve resilience, reduce costs and support growth. In an op-ed on TriplePundit, PwC’s Shannon Schuyler predicted that this year “investors can expect to see increased collaboration at the supply chain level, leading the way for more sustainable sourcing.”
4. Brands get real about controversial ingredients
From a Change.org petition targeting ingredients in sports drinks to Subway’s “yoga mat chemical” debacle, it’s clear that American customers are starting to give a hoot about what’s hiding in their favorite foods and beverages. While some companies turn a deaf ear to mounting pressure to ditch controversial ingredients, a growing number are heeding the call — and reaping the rewards in the form of higher sales and accolades from consumers.
5. Animal welfare initiatives gain traction
Chipotle made headlines earlier this year for removing pork from hundreds of restaurant menus after discovering a supplier had violated its standards. As Co-Chairman and Co-CEO Steve Ells put it in a February earnings call: “We could have chosen to replace this supply with pork from conventionally-raised pigs, [but] we decided not to because most conventionally-raised pigs are subjected to conditions that we find unacceptable.”
Its move was surely big news, but it came as no huge surprise to those in the CSR community, as Chipotle is a known leader in sustainable sourcing. But other brands seem to be taking notice of customers’ mounting concern over animal welfare as well: Last month Costco, which sells 80 million rotisserie chickens a year, announced it will stop selling chicken and other meats treated with antibiotics. Other food giants — from Starbucks and Panera Bread to Nestle, Chick-fil-A and even McDonald’s — have also adopted new animal welfare standards in the face of consumer pressure.
So, have Americans finally turned the corner when it comes to their eating habits? Only time will tell, but it sure looks promising.
Image credit: Flickr/badlyricpolice