The United States is in the midst of a food identity crisis.
The American diet, in many ways, appears to be failing the country's health. The obesity rate, although having plateaued, has settled at a preposterous 35 percent. More Americans suffer from diabetes than ever before. And there's little sign of abatement. That said, food has never been so widely available -- or so cheap. The average American family spends a smaller percentage of its income to eat than ever before.
Few companies are as well positioned to influence our diets as Nestle USA, which sells food to 97 percent of U.S. households. The global food giant is one of the nation's largest food manufacturers, churning out popular brands that range from frozen pizzas (DiGiorno) and packaged meals (Hot Pockets, Lean Cuisine), to dairy products (Skinny Cow and Haagen-Dazs), baby food (Gerber) and chocolate confections (Crunch, Toll House, and Butterfinger).
I sat down with Nestle USA's CEO Paul Grimwood to discuss how the company is perceived here, what it owes the public and how it's working to promote better food policy in the country. The interview has been edited for length and clarity.
Let's start with a pretty general question. From a consumer perspective, what is Nestle USA?
In the U.S. if you ask consumers, what do you think of when you think of Nestle, 61 percent will say chocolate.
Is that wrong?
Actually chocolate is the smallest part of our business in the U.S.
Is that something Nestle wants to change?
Yes. We want to make sure people understand the breadth of our portfolio. We're the number one or number two supplier to all the key retailers in the U.S. The US is actually very much like the UK, because why we're known for chocolate is a jingle in an ad in the 1950s. That little diddy still caries today as what Nestle stands for.
When people turn to the back of a packet and it says Nestle, we want that to be an endorsement of good quality, safety and reliability.
Do you consider that part of the company's obligation to the public good? How does the fact that Nestlé is a food company, and therefore major player in the formation of the American diet, affect that obligation?
You have a huge responsibility to the public as a food company, and an obligation to do the right thing in terms of the wellbeing of the general public. At the end of the day, you can have no stronger relationship than the one with someone whom you ask to trust you to put something in their mouth, or into their child's mouth for that matter. Our commitment to the quality and safety of our products is first rate, and it should be.
But we also have a responsibility as new ideas and concepts come along to rigorously review and test our products to make sure that the consumer actually has a need for it.
Speaking of needs, Nestle has been working to build its reputation as a health and wellness comwpany.
When we talk about ourselves being a nutrition, health and wellness company, it can be in a variety of ways.
Take Nestle health science, for instance. A lot of the work we're doing with health science is not only finding solutions to health problems today, but helping turn them into the mainstream foods of tomorrow.
We give strong portion advice on each of our products to make sure consumers eat the right amount. We have another called nutritional foundations, which are guidelines in terms of sugar content, in terms of salt content. So as we design products, whether it be for adults or for kids, we're always designing them with these nutritional foundations as guidelines. Around the world, people talk about 10 percent of your caloric intake being what some call empty calories or snacking calories or indulgent calories. We work within our guidelines to make sure our driver is not to produce a massively more indulgent product, because ultimately that's not in our interest.
Over the last 18 months, for example, we've taken 10 percent of sodium content out of all of our products.
What are policymakers not doing to protect consumers? And how can companies like Nestle help promote better food policy?
You have to remember that food manufacturing is the number one industry in the U.S. And food quality and safety have never been better than they are today. That said, going forward there will always be questions of public health and nutrition and wellness, and from my perspective, one thing we have to do that we're not doing is helping to fill in the blanks in the debate about nutrition science. One reason there's always a new narrative about a food type or food product that's good for you or bad for you is that there is a general interest in the consumer about whether what they're feeding themselves and their families is good for them. We have to enter into the debate.
So what needs to happen then that isn't currently happening?
We need to bring a diverse group of stakeholders into the room and have a logical, sensible, rational discussion, and then together come out with a recommendation on policy. There are simply too many extremes in the media today, and I think the consumer is generally confused. There needs to be more working together between academia, manufacturers and government regulatory agencies. There needs to be more communication.
Is there a particular food issue that comes to mind?
Sodium is an excellent example. The average American takes in between 3,400 and 3,500 milligrams per day. Now, the World Health Organization recommends closer to 2,000. The Food and Drug Administration recommends 2,400. Recently, there was an academic paper that reasoned 1,500 milligrams is what people should be consuming. What proceeded was a big discussion about whether we should go from our 3,500 milligram intake to 1,500. But there was no way consumers are going to be able to do that. Because in terms of the taste profile, consumers might be able to make that cut over, say, the next fifteen years, but certainly not over the next fifteen months. The conversation then should be about how to achieve incremental goals. And everyone needs to participate. It needs to be holistic. If everyone isn't participating, a consumer will walk into a restaurant that isn't curbing its salt use and say "hey, that's got a lot of flavor," and then shun the products on shelves with healthier portions of salt.
So something like salt regulation could work like, say, price regulation, for competition's sake. Regulating sodium levels helps, on some level, ensure equal playing field.
Is there an arm of Nestle's U.S. business that is struggling amid current health narratives?
The area that's challenged at the moment is the frozen category. The frozen category is not in growth at the current time. We've got to better understand that, because people are especially concerned with convenience and portion size, in terms of controlling the overall diet, and that's at the core of what you get with frozen foods and frozen meals.
Do you think that has anything to do with a growing paranoia about processed foods?
People want to look out for and understand their own health, so that's definitely part of it. But there's also an economic trend where people are looking to get more calories for their money. There are so many positives to frozen foods that the industry isn't currently articulating well enough.
Well, there's a calorie benefit. But also, depending on whom you ask, 40 to 50 percent of food from farm to fork is currently wasted in the U.S. That doesn't happen with frozen food. There's a cost benefit to frozen food, too, since there is no inherent waste. Consumers might want more natural, fresher foods, but there are natural and fresh ways of preserving and freezing foods that aren't properly being articulated at the moment.
So it's a casualty of consumer sentiment at the moment?
Exactly. And we hope to see that sentiment shift over time, but fortunately, save for the frozen category, business is looking quite good at the moment.