Healthier fare here to stay - Reuters Food Summit

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Growing consumer demand for healthier and more nutritious food is expected to have a lasting impact on major food and restaurant companies, many of which have struggled to keep up with diet trends in the past.

“Any business has to ask themselves… Am I going to be relevant to the consumer tomorrow?” Jack Schuessler, chief executive of Wendy’s International Inc. said at the Reuters Food Summit in Chicago.

“Consumers want the option of more healthy or wholesome food,” Schuessler said, adding that his belief in the staying power of that trend has led to the addition of fruit bowls and other new menu options to the No. 3 hamburger chain’s menu.

Like Wendy’s, restaurant chains and packaged food makers are focusing more of their efforts on addressing consumer concerns about their expanding waistlines.

“Weight management will continue to be something consumers seek for,” Kraft Foods Inc. CEO Roger Deromedi said at the summit. Kraft’s new line of foods co-branded with the South Beach Diet, which Deromedi called “basically common sense” as opposed to a “fad diet,” will hit grocery stores in April.

Last year’s low-carb diet craze combined with growing concern about the roughly two-thirds of U.S. adults considered overweight or obese has led to a recent spike in demand for foods that are lower in carbohydrates, fat and calories.

The low-carb trend has since fizzled out, but executives expect consumers to continue to be vigilant about food.

“A lot of that has faded in terms of the specific focus on low-carb, although we believe that people will continue to have a real interest in what they are eating and the nutritional content of that,” said Clarence Otis, CEO of Olive Garden and Red Lobster parent Darden Restaurants Inc.

In response to the shift toward healthier eating, companies like No. 1 hamburger chain McDonald’s Corp. have enjoyed success with new menu items like entree-sized salads.

That company and others, however, expect to keep feeding their pipelines products aimed at health-conscious consumers.

Maura Havenga, McDonald’s senior vice president for its North American supply chain, said it continues to talk to suppliers about adding more fruits and vegetables to its menu.

“They are bringing us different examples with pineapple, with banana, with carrots,” Havenga said at the summit. “You are going to see more of that.”

Those types of products represent one of the most important long-term opportunities food companies have to drive growth in their mature businesses, according to one industry watcher.

“Having a perspective on what aspect of health consumers care about is going to be the key driver of success,” said John Blasberg of consulting firm Bain & Co., who added that new products will likely purport to have specific health benefits “as opposed to being not so bad for you.”

Soft drinks and confectionary maker Cadbury Schweppes, for instance, is banking on a “fortified” version of its 7Up soft drink, called 7Up plus, to help boost sales. The company is also reformulating Diet 7Up while it looks to tap into growing demand for diet soft drinks.

“If we continue to offer consumers good-tasting diet products, we have the ability to bring people back into the category that for whatever reason have left,” said Gil Cassagne, president of Cadbury Schweppes Americas’ beverage business.

SABMiller Plc’s Miller Brewing unit also expects the 25-year consumer migration to light beers to keep going. That trend was helped along by the low-carb craze that revitalized sales of both Miller Lite and light versions of lower-priced Milwaukee’s Best and Miller High Life brands.

“We got consumers to reconsider and come to Miller Lite for carbs, and we are keeping them,” said Bob Mikulay, Miller’s executive vice president of marketing. “By no means has that disappeared.”

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