Industry may see long term benefits from a 'people not profits' strategy

By Nathan Gray

- Last updated on GMT

Related tags Nutrition

Industry may see long term benefits from 'people not profits' strategy
Industry they may see benefits in lowering prices and making products available to broader markets, according to one expert who suggests that manufacturers should consider people not profits by looking at the bigger 'socially responsible picture'.

While the goal of any business is to maximise its profit, the food and nutrition industry should not put health at a premium, according to Professor Yu Ma from Alberta School of Business, USA.

The marketing expert suggests that looking at the big picture of social responsibility could lead food companies to consider changing their strategies. Making less profit per customer, but making more money overall would go hand in hand with enhanced brand identity and recognition, said Ma.

"They might have to sacrifice some short-term profit, but once they build up their brand name, and the goodwill in the consumer's mind, then it's a win-win for the customers and the company in the long run,"​ he said.

Writing in the Journal of Marketing​, Ma notes that consumer spending contains a wealth of information to show that decisions consumers make after being diagnosed with a major health issue such as diabetes may seem sound on the outside, but actually expose them to greater health risks.

Halo effect

Ma's analysis shows that after a diagnosis of diabetes, people tend to cut down on sugary beverages and foods that may increase risk for future problems.

Yet, while being hyper-vigilant with these choices, he suggests that they tend to load up on other foods that are high in sodium or fat—two ingredients that could increase risk of heart disease or high blood pressure.

Ma said that another other critical factor is that people have a tendency to divide foods into two groups: healthy and unhealthy - and in doing so, they tend to over-consume foods that they class as 'healthy'.

"What we found is that people paid too much attention to categorisation, but they failed to monitor how much of those healthy alternatives they actually take in,"​ said Ma. "It's what we call the health halo effect."

Expensive foods

However, the expert said that that such a halo effect is not the only problem with healthy eating - since the cost of making a switch to healthier foods may be the biggest hurdle.

Ma noted that purchasing and consuming more fruits and veggies or organic foods is not an option for consumers in all income brackets - adding that a that lack of access to better nutritional choices difficult to overcome.

He said that people may think middle-class consumers can easily afford to switch, but the price difference from the healthy option to the "next best thing" ​can be significant once the whole food bill is totalled up.

"If you compare the price of healthy, whole-grain bread versus regular white bread, there's a cost increase between them,"​ he said. "Sometimes, if you have a family to feed, it's hard to justify the price difference."

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