When Sir Francis Bacon said in 1597 that knowledge is power, he certainly wasn’t referring to an obesity epidemic 400 years in the future. Today, however, with 57 percent of Americans tipping the scales as overweight, some researchers are counting on Bacon’s mantra to prove true.
While lifestyle and genetics play a role in affecting overall health, the quantity, mix, and type of foods Americans consume may have some of the most serious consequences on them. According to most health professionals, poor choices in what Americans eat is a major determining factor of obesity. Steven Vickner is working to see if labeling trans fats in processed foods, such as crackers, could give consumers the information they need to make better choices.
“Consumers have the need and the right to know what is in their food,” says Vickner.
“Not many Americans understand what trans fats are, and they need to understand how to look at food labels to determine what is good for them.”
Trans fats are a mixture of hydrogen and liquid vegetable oil, which converts it into a solid form. They are used to extend the shelf life of food and better maintain their flavor. They are present in food whenever the words “partially hydrogenated vegetable oil” appear on a food product’s label. Although trans fat is useful as a food preservative, it increases bad cholesterol level, and raises the risk of heart disease.
Prior to 2006, food manufacturers such as ConAgra, Kraft Foods, Nestle and Unilever, often dubbed “Big Food” by industry analysts, were not required to label trans fats on food products. As research and media publicity continued to document the negative health effects of trans fat consumption, however, the FDA responded by requiring it to be included on labels.
This change created an opportunity for Vickner to examine what effect labeling of trans fats has had on consumers’ ability to make healthy choices. By studying the trans fat label requirement, Vickner is searching to understand whether consumers changed their buying habits, how the media covered the issue, and how food manufacturers changed their marketing strategies.
To do this, Vickner acquired weekly grocery store scanner data from April 2002 forward for the cracker industry – nearly one gigabyte of precise demand data on quantities, prices, and even merchandising conditions for hundreds and hundreds of products. He also assembled media metrics over this time frame that account for the coverage of the trans fat debate in the popular press like the USA Today and Wall Street Journal newspapers.
After collecting the data, Vickner focused his research on one particular instance of labeling by the market leader Nabisco, a division of the huge Kraft Foods Company. Nabisco introduced trans fat-free Triscuit crackers and voluntarily labeled their products as such (and included a heart-healthy logo on the box to highlight the change). Using both time series and panel data methods, Vickner isolated and determined the impact of the media coverage and the Triscuit label changes on consumer buying behavior.
In this instance, Vickner discovered that trans fat labeling didn’t just make good health sense; it made good business sense as well.
“Nabisco’s strategic move to introduce the trans fat-free Triscuits in December 2003 preserved their dominant market position and forced Keebler and private labels to give up precious market share to the competitive fringe,” says Vickner. “And in a market where one percentage point in market share equals $10 million, the stakes of this game are quite high.”
Vickner plans to study not only the market response of consumers, but he also wants to consider strategic, supply-side responses as well. As time goes on, he hopes it will be possible to determine how accurate the econometric model predictions were, after actual market outcomes post-mandatory labeling are observable.
“By understanding market behavior, you can anticipate the reaction to the FDA-mandated labeling for trans fats,” Vickner says. “It is my hope that this research will contribute by helping Americans understand how to eat healthier and will lead us to becoming a slimmer, healthier nation.”