Over the past two decades, obesity rates for children and adults have grown to epidemic proportions, according to a new report—“Better-for-You Foods: It’s Just Good Business”—from the Hudson Institute, New York, NY. In 1990, no state had an obesity rate above 15%. Today, 38 states have obesity rates over 25%, and just one has a rate lower than 20%. The medical cost of adult obesity is estimated to be as high as $147 billion each year, and the cost to businesses due to absenteeism and lost productivity is estimated at $73 billion annually.

There has been great momentum by government at all levels to pass and implement laws to improve school nutrition, make communities safer for walking and biking, and increase access to affordable healthy foods. And many industry members have signaled their intent to help prevent obesity through individual efforts and in collaboration with organizations like the Partnership for a Healthier America and the Healthy Weight Commitment Foundation.

However, until now, there has been little evidence for how companies can do well by doing good. In this landmark study, researchers examined Nielsen sales data from grocery stores, drug stores and mass merchandisers; financial metrics, such as operating income, share price appreciation and return to shareholders; and company reputation and favorability rankings to analyze whether or not sales of better-for-you (BFY) foods affect key business performance measures. For the purposes of this report, the term “foods” includes both foods and beverages.

The study concluded that food and beverage companies that have a higher percentage of product sales in the BFY category perform better financially. In short, sound strategic planning with a commitment to growing sales of BFY foods is just good business. Selling more BFY foods can help CPG companies improve the key performance metrics demanded by their shareholders and Wall Street, while also providing more nutritious foods and beverages for parents and children. Healthier products yield healthier profits.

This was excerpted from the report’s executive summary. More information can be found at www.obesity-solutions.org.