“close to 2 billion people overweight”

THE MODERN GLOBAL FOOD SYSTEM- ITS EVOLUTION AND CURRENT STATUS AND HOW IT IS RELATED TO HEALTH

THE W RLD IS FAT

Barry PopkinDepartment Of Nutrition

School Of Public Health And Medicine Department Of Economics

The University Of North Carolina At Chapel Hill

“close to 2 billion people overweight”

Outline• Overarching goal: understand this new set of players

and how little we understand them and their impact on health and the entire agriculture value chain

• History: modern food processing, consumer packaged foods and beverages began in 19th century

• Manufacture sugar-sweetened beverages 20th century• Grocery stores very old history but cheap food markets

relying on economies of scale, and later self-service food markets emerged in the 20th century.

• Post WWII very rapid evolution of both consumer packaged food and beverage sector and modern food distribution systems

• Major global expansion 1990 onwards, accelerating now

“close to 2 billion people overweight”

New drivers of the system jointly are profoundly changing agriculture and the full shift in the value food chain and its

nutritional impact is not understood• Consumers and massive shifts in consumer demand

driving and being driven by these two sectors• Consumer packaged goods food and beverage sector:

marketing• Retailer sector creation and marketing—I will focus on

this sector to give some sense of how little we understand, how new it is globally and certainly in LMIC’s and how rapidly it is transforming itself globally but I could equally have addressed either of the other two drivers and their shifts (CPG, agribusinesses)

“close to 2 billion people overweight”

Background: why of interest to LCIRAHMajor Food System Shifts : Linkages from Farm to Food Sales are Rapidly Shifting

• Traditional chain – Farmers sale directly in markets or sell to middlemen. – Small mills and processors at local level– Complex varied distribution

• Rapid transition to modern system varied across Latin America, Africa, Asia at various times over 1980-2010– Modern: farmer to processors or supermarkets– Reardon The quiet revolution in staple food value

chains: Enter the dragon, the elephant, and the tiger– Reiterated by the new Garnett and Wilkes case study

on China

“close to 2 billion people overweight”

1. Examples modern foods: Graham Crackers in 1829

• Graham bread invented by Sylvester Graham for his vegetarian diet. The Graham bread was high in fiber, made with non-sifted whole wheat flour and was made into little squares

• Now these are called graham crackers• This reverend wanted them to remove carnal urges

"Dr. Graham's Honey Biskets" • Like Kellogg’s and other cereals—health and a

vegetarian was the original focus

“close to 2 billion people overweight”

The Potato Chip‒1853

• Developed out of fried potatoes that became too thin. In 1853 Saratoga Chips emerged and soon they became known as potato chips

• Potato chips first became available in grocery stores in 1895

• Utz quality foods and Lay’s emerged in the 1930’s and began the mass-produced items that have now reached the globe

“close to 2 billion people overweight”

History of the Oreo Cookie

Year It Began: 1912 by the National Biscuit Company The Oreo was packaged as part of the Trio: the Mother Goose, the Veronese, and the Oreo Biscuit. The Oreo was the star, evolving from a lemon-cream variety in the 1920s to Double and even Triple Stuf Oreos more recently. Mini Oreos, Double Delight, Milk Chocolate Covered Mint Oreos Nabisco has produced nearly 500 billion Oreos all around the world.

“close to 2 billion people overweight”

Spreads for Snacking: Marmite, Peanut Butter, Nutella

• Marmite: Justus Leibig created the Marmite process in late 19th century. Manufactured in UK in 1902

• Peanut butter: 1890, 7th Day Adventist and vegetarian Dr. John Kellogg (of corn flakes fame), created peanut butter as a healthy protein substitute that was easy to digest for his sanatorium patients with no teeth.

• Nutella started during the period of chocolate shortage during WWII and was created as a way to extend limited chocolate support in the 1940s

“close to 2 billion people overweight”

Sugar-sweetened Beverages

• Long history of carbonated water• Pharmacists in 1870’s and 80’s in US began to

create beverages with herbs, sugar, cocaine, many other constituents that led to Dr. Pemperton’s Coca Cola and many other SSB’s. First Coke factory in 1910’s in Atlanta

• WWII saw a major spread globally of Coca Cola

“close to 2 billion people overweight”

Grocery Store History• First large-scale markets and serf-service grocery stores in

the US and Canada: began 1910’s• Greater Atlantic and Pacific—first larger chain sold only tea

and coffee until 1900’s • First self-service was Piggly Wiggly in 1916. Tesco started

in 1919 but emerged later in 1929-30’s in the UK, Aldi in Germany the same [really Aldi Sud and Aldi Nord)

• US Supermarkets expanded rapidly after WWI up to about 14000 stores but mainly meats, produce, dairy and limited packaged foods and beverages

• Because of the density of European cities larger supermarkets emerged a bit later

“close to 2 billion people overweight”

The Mega Chains and Global Growth• Walmart: completely a post WWII phenomena with all

growth from 1970 onwards but began earlier in 60’s and food in late 70’s

• Carrefour 1959 formed, grew from 60’s onward• Ahold(began as Albert Heijn) and expanded in early

1900’s as did Tesco • Most major growth as chains occurred after WWII• Our focus is on not only these global chains but all the

domestic clones across the globe in low and middle income countries

“close to 2 billion people overweight”

Fresh Markets are disappearing, replaced by convenience stores and supermarkets

• In 1990 15-20% of food sold in supermarkets in Latin America—all well documented by teams linked with Tom Reardon

• In 2000: 60% of the average population share. They are becoming the main buyers in the supply chains for processed foods

• Top 5 chains control two-thirds of the supermarket sector in Latin America (Wal-Mart, Carrefour, Ahold)

• Asia, urban Africa underway equally rapidly but a decade later for most

“close to 2 billion people overweight”

Shift In Growth and Size of Sales for a Subset of Retailers in Asia

• First wave South Korea($42B), Taiwan– Annual compound sales growth 2001-09: 10-12%

• Second wave: Indonesia, Malaysia, Philippines, Thailand ($18B)– Annual compound sales growth 2001-09: 13-18.5%

• Third wave: China($91B), India, Vietnam– Annual compound sales growth 2001-09: 28-50%

• Africa’s growth mainly from South Africa north along each coast and then inland.

“close to 2 billion people overweight”

Types of foods & beverages

Raw & Perishable

Packaged and processed

Prepared

Public dataIntake

NHANESFoods as reported

NHANESFoods as reported

NHANES2007/08: 30% of

calories prepared away from home

34% of calories eaten away from home ‡

Foodcomposition

USDA SR, FNDDS, MPED7,500 USDA food codes

Commercial data

Sales/ purchase

Householdpanel until 2006 only

Retail Scan & household panels

600,000 UPCsConsumer panels

Nutrition USDA SR ~ 200,000 unique formulations §

At least 1,800 Fast Food items/meals

The modern food supply is not what we think it is from our limited measurement

‡ Poti & Popkin, JADA, 2011§ Ng, & Popkin, JADA 2012

“close to 2 billion people overweight”

The Evolution from Minimally Processed Foods of The 20th Century to the 21st Century to Today

• Very slow evolution of technology (e.g. Tin cans—critical in development of commercial formula in late 1800’s)

• Food science discipline exploded as did new technologies during both WW’s and after

• Development of modern consumer packaged food sector—major companies long history (e.g. Nestle’s, Hershey in chocolate)

• Today, the impact of the processing of large portion of those 600,000 products needs research. Only minimal sense of size or impact on health of this shift.

Extent & Purpose of Processing Definition Examples

Minimally processed food

Single ingredient basic foods with no or very slight modifications that do not change inherent properties of the food

Fresh, frozen, or dried plain fruits, vegetables, roots, tubers, or legumes; unsalted nuts and seeds; fresh or frozen unseasoned meats; eggs; plain milk; grains; coffee beans; tea leaves; bottled water

Moderately processed ingredient

Extraction or purification of one specific component of a single basic food using physical and chemical processes that change inherent properties of the food

Oil, sugar, flour, spices, 100% juice, butter

Moderately processed for preservation or pre-

cooking

Physical and chemical processes applied to minimally processed foods for the purpose of preservation or pre-cooking that do not change the basic nature of the food

Canned fruit, vegetables, legumes, meat, poultry, or seafood; plain yogurt; cheese; instant oatmeal; instant rice; plain peanut butter

Moderately processed for flavor

Addition of moderately processed ingredients to a minimally or moderately processed food, combined for the purpose of enhancing flavor but not changing the basic nature of the food

Frozen, dried, or canned fruit with sweeteners; salted nuts and seeds; fresh or frozen meat or seafood with seasoning; flavored milk; flavored yogurt; flavored oatmeal; tuna canned in oil; sweetened juice

Moderately processed grain products

Combination of grains or flour with water, salt, and/or yeast to convert grains into grain-based products

Taco shells/tortillas, bread, plain pasta, basic cereals (puffed rice, shredded wheat, plain flakes)

Ultra-processed ingredient

Multi-component mixture of combined ingredients not resembling its basic components but NOT consumed alone

Margarine, mayonnaise, condiments, dips, salad dressings, jam/jelly, sauces, gravy

Ultra-processed food Multi-component mixture of combined ingredients not resembling its basic components and consumed alone

SSBs, cookies, frozen entrees, pizza, canned soup, processed meat, salty snacks, ice cream, dessert mixes, boxed or canned mixed dishes, candy

Todays processing and purposes: amazingly complex

16

Developed by Jennifer Poti, UNC Food Research Program

• Income • Culture• Market‐based food systems

• Income• Modernity• Convenience

Modern food system foods and beverages: a few insights

≈

“close to 2 billion people overweight”

Added sugars in consumer packaged foods and beverages: “Natural” sugars, especially Fruit Juice Concentrate is the new ‘healthy’ caloric sweetener

• NO import quotas cover FJC but cover other sugars in the US and a number of other regions/countries

• 10.3% of all food contain fruit juice concentrate out of all US commercial consumer packaged foods and beverages with a bar code and unique ingredients.

• large % infant formulas, bars, dressings, yoghurt use fruit juice concentrate. See next slide

Ng, Slining, Popkin JAND 2012) 11:1828

Total Calories and Volume of Food and Beverages Purchased in the United States Containing Nutritive Sweeteners (NS)

and Non-nutritive Sweeteners (NNS), 2005-2009

a. Containing any Nutritive Sweeteners (NS)

77.9%77.4% 77.5%

76.4%75.9%

73.4%73.7% 73.9%

71.2%

71.2%

70%

72%

74%

76%

78%

80%

2005 2006 2007 2008 2009% to

tal c

alor

ies

or v

olum

e pu

rcha

sed

cont

aini

ng a

ny N

S

% total calories purchased containing any NS (including FJC)% total volume purchased containing any NS (including FJC)

b. Containing any Non-Nutritive Sweeteners (NNS)

2.6% 2.4% 2.4% 2.5% 2.6%

13.3%

15.3% 15.7%

14.6%

15.2%

0%

5%

10%

15%

20%

2005 2006 2007 2008 2009% to

tal c

alor

ies

or v

olum

e pu

rcha

sed

cont

aini

ng a

ny N

NS

% total calories purchased containing any NNS

% total volume purchased containing any NNS

Sources: Nielsen Homescan 2005-2009, Gladson Nutrition Database 2007 and 2010

Ng, Slining, Popkin JAND 2012) 11:1828

Percentage of calories sold in the US in 2008 that contain various types of sweeteners by select food groups

9%

17%

22%

27%

27%

29%

31%

6%

88%

55%

50%

69%

30%

36%

68%

64%

3%

23%

32%

4%

27%

4%

44%

28%

0% 20% 40% 60% 80% 100%

Bars

Yogurt

Fruit, fresh, frozen, canned or dried

Salad dressings and dips

Baby Food, formula

Diet-Sweetened Bev *

Sugar Sweetened Bev

All Food Groups

Added sweetener – any FJCAdded sweetener – Other natural sweeteners onlyAdded sweetener – other natural + nonnutritive sweetenersAdded sweetener – nonnutritive sweeteners onlyNo added sweetener

Sources: Nielsen Homescan 2005-2009, Gladson Nutrition Database 2007 and 2010.• diet-sweetened beverage includes sodas and fruit drinks with < 20 calories per 100g• Ng, Slining, Popkin JAND 2012) 11:1828

“close to 2 billion people overweight”

The Growth in Dollars of the Modern Consumer Packaged Food Sector in

LMIC’s• Use of Euromonitor international passport data. Not all

inclusive but provides for segments monitored growth patterns

• After this we present more in-depth data from our China Health and Nutrition Survey (also Mexican national survey) and also from case studies in 3 Asian countries by Reardon et al

Source: Reardon et al (2012) Proc. NAS 109: 12332-7.

0

200

400

600

800

1000

1200

1400

1600

1800

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

real

US

$ pe

r cap

ita

Year

Packaged Food Expenditure Per Capita (in Real US$) among Higher Income Countries

Australia

USA

Spain

Brazil

Mexico

Singapore

Source: Ng and Dunford Obes Revi(2013). Euromonitor Global Market Information Database.

0

50

100

150

200

250

300

350

400

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

real

US

$ pe

r cap

ita

Year

Packaged Food Expenditure per Capita (In Real US$) among Lower Income Countries

South Africa

Malaysia

Thailand

China (excluding HK)

Indonesia

Vietnam

India

Source: Ng and Dunford Obes Revi(2013). Euromonitor Global Market Information Database.

0

500

1000

1500

2000

2500

3000

3500

4000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

real

US

$ pe

r cap

ita

Year

Food Service Expenditure Per Capita (In Real US$) among Higher Income Countries

Spain

Australia

SingaporeUSA

Brazil

Mexico

World

Source: Ng and Dunford Obes Revi(2013). Euromonitor Global Market Information Database.

0

50

100

150

200

250

300

350

400

450

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

real

US

$ pe

r cap

ita

Year

Food Service Expenditure per Capita (In Real US$) among Lower Income Countries

Vietnam

Malaysia

China (excluding HK)Thailand

Indonesia

South Africa

Egypt

Philippines

India

Source: Ng and Dunford Obes Revi(2013). Euromonitor Global Market Information Database.

The Chinese Health and Nutrition Survey CCDC-UNC-CH

The modern food system is growing rapidly

• A more detailed analysis has produced more detailed data

• China in 2001 had only $13.1 billion in sales from the 47 retail chains measured

• This grew rapidly to $91.5 billion in 2009 and has accelerated in growth since then

• Source: Reardon et al (2012) Proc. NAS 109: 12332-7.

The Chinese Health and Nutrition Survey CCDC-UNC-CH

Purchase of consumer package foods and beverages are increasing rapidly! In China, in 2011 we asked in 3 days

of daily 24-hr recall about the source of each food item.

8173 70

59

813

1118

11 14 19 23

0

20

40

60

80

100

Rural Small city Big cities Mega cities

% o

f kca

l by

sour

ce Processed

Restaurant

Home

“close to 2 billion people overweight”

Packaged and Processed food consumed in Mexico, 2012

• In Ensanut 2012 (national nutrition survey) we asked each person with 24-hour recall if the food was consumed not raw, came from a packaged item, had the word industrial in the title or the nutrient data came from the nutrition labeling on the package. All were considered packaged and processed.

• Source: Popkin, in process from Ensanut(Mex. Nat’l Nutrition Survey)

The Chinese Health and Nutrition Survey CCDC-UNC-CH

Percentage of kcal by Source, Mexico 2012

34.4%42.8% 44.7%

65.6%57.2% 55.3%

0%

20%

40%

60%

80%

100%

Mexico City Other Urban Rural

% o

f kca

l by

sour

ce

Processed

Not Processed

Modern Food Chains Market Share of Sales

37

2832

60

51

79

0

20

40

60

80

100

Thailand Mexico China

Mar

ket s

hare

(%)

Country

Produce and meat Packaged Food

Source: from Gomez et al Food Policy 2013. Originally fromGorton et al 2001, Euromonitor 2012, and Goldman and Vanhonacker 2006.

“close to 2 billion people overweight”

The Global Food Industry

• The global food industry is NOT as omnipresent as believed. In many countries, at least 50-60% of all consumer packaged food and beverages are locally manufactured though often global companies have a share of ownership that is almost impossible to discover

• Retail sector tends to be more foreign dominated in Asia• China: top retail chains are Dairy Farm and China Resources

from Hong Kong . Also Lotte and Emart from South Korea are key players. But another data set shows Euchon, China Resources, Walmart, Kianhua and Carrefour in order of size

• Similar retail ownership in Vietnam, Indonesia, Malaysia. Local ownership only allowed in India/Phil.

“close to 2 billion people overweight”

The Global Food Industry

• The global consumer packaged food industry is NOT as omnipresent as believed. In many larger countries, at least 50-60% of all processed foods are locally produced

• The good: Great technologies • The bad: Require government regulations for truly

positive changes • The ugly: local manufacturers do not answer to global

audience’s health and environmental concerns • The ugly: both produce the same ultraprocessed foods• The unknown: how are they interacting with farmers

across most countries and changing the food value chain

“close to 2 billion people overweight”

Summary• The growth of the modern food sector—both

restaurant and especially retail is very rapid.

• While there are some benefits in terms of sanitation and handling of the cold chain, the costs in terms of the shift toward ultraprocessed and processed foods high in added sugar, saturated fats and sodium are significant but really not studied or fully understood.

• This sector is transforming agriculture in ways we only barely understand. Reardon et al The quiet revolution…IFPRI/ADB documented this for 3 Asian countries. see also Garnett and Wilkes China case.

• Challenge for LCIRAH, others in ag sector to address, not ignore before it is too late.