Calories and Cents

Abstract

In recent decades, obesity has become a critical global health issue. Experts and laypeople alike attribute high obesity rates to lifestyle choices involving diet and exercise. Following decades of increasing portion sizes and decreasing nutritional value, the food and beverage and fast-food industries have felt intense pressure to answer to new consumer priorities and what some see as their role in fueling the obesity epidemic. This article examines marketing and pricing practices implemented by some of the most popular food and beverage and fast-food industry players in the U.S. market that are involved in this response. Although marketers claim they are offering healthier choices and supporting the fight against obesity, our analysis reveals common industry strategies, including value pricing, psychological pricing, quantity discounts, and combo deals that undermine healthy food choices. We argue that in order to truly encourage healthy eating, these industries must revise not only their products but also their fundamental approach to creating customer value. It is also imperative that consumers, legislators, and the media be informed about deceitful strategies used pervasively by food and beverage manufacturers and fast-food restaurant chains that ultimately aggravate the obesity epidemic.

Keywords

corporate social responsibility customer value social marketing obesity public health

Introduction

Many consider obesity, a preventable disease, as one of the most critical public health challenges of the 21st century (World Health Organization, 2015). The societal costs of the obesity epidemic are colossal. In the United States, for example, a 2012 study estimated that obesity-related illnesses accounted for 20.6% of the expenditures in health care, more than twice the figures previously projected (Cawley & Meyerhoefer, 2012). Worldwide, the economic impact of obesity in 2014 was estimated at US$2.0 trillion a year. As evidence of the magnitude of the obesity problem, this sum was matched only by the economic impacts of smoking (US$2.1 trillion) and of armed violence, war, and terrorism (US$2.1 trillion; Dobbs et al., 2014).

Obesity is a complex and multicausal problem. Experts and laypeople alike largely attribute high obesity rates to genetics and to lifestyle decisions involving diet and exercise. In addition, myriad other factors have been associated with obesity. Ubel (2009) contends that economic forces have helped drive the obesity epidemic. More specifically, the Centers for Disease Control and Prevention, the American Heart Association (AHA), and the American Cancer Society have held the food industry partially responsible (Moss, 2013). International organizations, including Consumers International and the World Obesity Federation, claim that the food industry needs to be regulated, just as the tobacco industry is (Stephens, 2014).

Moreover, medical researchers maintain that morbidity rates, the incidence of medical issues, and costs related to obesity are higher than those associated with tobacco and alcohol use, and they hold “Big Food” responsible (Brownell & Warner, 2009; Stuckler, McKee, Ebrahim, & Basu, 2012; Sturm, 2002; Sturm & Wells, 2001). Some of the measures that have addressed the latter issue are increasing public awareness, harsh taxation, and legislation limiting or banning the sale and advertising of tobacco and alcoholic beverages. However, limiting food and beverage consumption, a physiological human need, presents a much more difficult social marketing challenge. Furthermore, the effectiveness of nascent efforts to tax and limit sizes of sugary beverages, educate consumers about healthy eating and exercise, and regulate the food and beverage and fast-food industries’ marketing and pricing strategies that encourage unhealthy eating is still abstruse (Fletcher, 2012; Fletcher, Frisvold, & Tefft, 2010, 2011).

An assessment of the sales of lower calorie foods marketed by 16 food and beverage manufacturers between 2008 and 2012 indicated that lower calorie products accounted for 52.5% of the sales and 99% of the approximately US$1/2 billion in sales growth in that 5-year period (Cardello & Wolfson, 2014). Marketers cannot ignore these trends and business opportunities.

Under intense scrutiny and market pressure, leading actors in the food and beverage and fast-food industries have attempted to counterbalance their perceived or actual role in the obesity epidemic by introducing and heavily advertising healthier food choices, such as Nabisco’s Snackwell product line and salads in fast-food restaurants, and smaller portions, such as 100-calorie packages. Yet at the same time, food and beverage manufacturers and fast-food restaurants rely on marketing strategies to increase consumption of their products, such as value pricing, psychological pricing, quantity discounts, and combo deals. These industry-initiated trends and practices have defined companies’ responses to the obesity epidemic in the absence of a cohesive regulatory system. The aim of this article is to conduct a critical review of these industry practices, especially surrounding the marketing of “healthy foods,” to determine whether they constitute a genuine effort to counter the obesity epidemic.

Objective

This article aims to examine common marketing and pricing practices implemented by some of the most popular food and beverage and fast-food industry players in the U.S. market. In particular, it discusses critically their approaches to food marketing in general and healthy food marketing in particular, which, they claim, represent a socially responsible approach to fighting obesity and encouraging healthy eating.

Method

This article is based on qualitative and exploratory research. The qualitative research approach, widely adopted in the social sciences, has also been employed extensively in other academic disciplines, including the health sciences and business. Typically, exploratory research collects information with the objective of defining and understanding problems and suggesting hypotheses or solutions.

Method

The first part of the research for this article consisted of the identification, collection, and screening of information from secondary sources. An extensive search of academic databases, newspapers, magazines, and other online sources was conducted. Key terms included combinations of “obesity” with numerous terms, including “marketing,” “consumer behavior,” “advertising,” “sales promotion,” “health/healthy,” “customer value,” “pricing,” “food and beverage,” “soda/soft drinks,” and “fast food.” Nearly 1,000 trade and academic articles and webpages were retrieved, screened, and selected for further examination.

The identification of relevant news and articles related to obesity and the marketing strategies of the food and beverage and fast-food industries led to more in-depth searches about specific topics. The secondary research also covered marketers’ webpages about sales promotions, public interest campaigns, and press releases, particularly those related to claims and campaigns to promote healthier eating and fight obesity.

As it evolved, the research focused on materials related to marketing and pricing strategies of four conspicuous companies: (1) The Coca-Cola Company—global sales of US$46 billion in 2014, 25.9% of the global and 42.3% of the U.S. soft drink market (Statista, 2015b); (2) Burger King (BK)—global sales of US$1.06 billion, 60% of which is in the United States and Canada (Statista, 2015a); (3) McDonald’s—global sales of US$24.4 billion and U.S. sales of US$8.65 billion, with 14,350 restaurants in the United States plus 21,908 international locations in 2014 (Statista.com, 2015c); and (4) Subway—approximately US$20 billion in global sales and US$12 billion in U.S. sales, with 44,000 restaurants in 111 countries in 2015 (Statista, 2015d).

In addition to secondary sources, additional information on the strategies and tactics of food and beverage manufacturers and fast-food restaurant chains that encourage unhealthy eating, including value pricing, nonlinear pricing, quantity discounts, combo deals, and celebrity endorsements, was obtained using field research and observation, conducted during visits to supermarkets, movie theaters, and fast-food restaurants.

Theoretical Background

Although obesity clearly has a physiological dimension and has accordingly been studied by medical researchers, it is understood that overconsumption can have psychological drivers as well. To combat the epidemic, therefore, researchers have sought to identify social and economic factors behind it. Much of the literature on marketing and obesity has focused on the negative effects of food marketing and food advertising to youth (Carter, Patterson, Donovan, Ewing, & Roberts, 2011; Cheyne, Dorfman, Bukofzer, & Harris, 2013; Fleming-Milici, Harris, Sarda, & Schwartz, 2013; Harris, Sarda, Schwartz, & Brownell, 2013; Hoek &Gendall, 2006; Kim et al., 2013; Kunkel, Mastro, Ortiz, & McKinley, 2013; Lobstein & Dibb, 2005; LoDolce, Harris, & Schwartz, 2013; Powell, Harris, & Fox, 2013; Ustjanauskas, Harris, & Schwartz, 2013). In addition, numerous articles have empirically tested how certain marketing tactics may influence food consumption. A comprehensive review of such investigations was published in Nutrition Reviews, followed by suggestions on how healthy eating can be encouraged without forgoing business objectives (Chandon & Wansink, 2012).

According to the definition endorsed by the Boards of the International Social Marketing Association, European Social Marketing Association, and Australian Association of Social Marketing,

Social Marketing seeks to develop and integrate marketing concepts with other approaches to influence behaviours that benefit individuals and communities for the greater social good. Social Marketing practice is guided by ethical principles. It seeks to integrate research, best practice, theory, audience and partnership insight, to inform the delivery of competition sensitive and segmented social change programmes that are effective, efficient, equitable and sustainable. (2013)

There is a copious literature on social marketing relevant to the present discussion mainly on public health, which has appeared in health-related journals (Truong, 2014). A common observation is that the literature on social marketing is mainly downstream, typically focusing on how to achieve behavioral goals and changes, rather than upstream, attempting to assist in policy formulation and strategy development (Truong, 2014). Social marketers tend to bank on cognitive models and deliberate commitment of their targets (Tapp & Spotswood, 2013). Recently, however, a trend toward upstream interventions has emerged (Spotswood & Tapp, 2011). Research has addressed the role of government in social marketing campaigns (Raftopoulou & Hogg, 2010). Nevertheless, empirical evidence, for example, suggests that young drinkers failed to respond to a government campaign discouraging drinking (Szmigin, Bengry-Howell, Griffin, Hackley, & Mistral, 2011). Shifting the focus to industry, corporate social responsibility (CSR) research can help to understand the urge of companies to invest in advertising campaigns with goals that are aligned with governmental public-health initiatives. Company- and individual-specific factors mediate consumers’ responses to CSR (Sen & Bhattacharya, 2001). CSR may also affect a company’s market value (Luo & Bhattacharya, 2006). According to the literature, cost-benefit analysis can suggest to managers the “ideal” level of CSR (McWilliams & Siegel, 2001). Nevertheless, critics contend that CSR and cause marketing, are, in reality, tools corporations embrace to influence politicians and public opinion about them, serving their self-interests. Therefore, consumers should, collectively, confront and restrain corporate power (Hastings, 2012).

Unquestionably, obesity has received substantial attention from scholars in myriad fields of investigation. Despite the assumed role of the food and beverage and fast-food industries as chief contributors to the obesity epidemic, limited upstream research effort has been made to discuss and critique the corporate/institutional side of the equation. This article aims to contribute to this significant side of social marketing.

Assessment

Scholars have suggested a link between CSR and competitive advantage and profitability (Malar, 2008; Porter & Kramer, 2006). Yet, leading food and beverage and fast-food industry players have consistently adopted various marketing and pricing strategies and tactics to increase customer value that undercut healthy eating habits. For instance, pushing larger portions has been a key strategy for creating value, which puts much of the food industry at odds with healthy eating practices. In what follows, after introducing the customer value concept, some prevalent marketing and pricing strategies that disfavor healthy foods are depicted.

Customer value

Customer value is the sum of all tangible and intangible benefits (B) one gets from an offering, such as the utilitarian, social, and emotional benefits of a product or service, divided by the price (P) incurred to get it, such as money, time, and effort. Hence, marketers can add to the perceived value of an offering by increasing the numerator (B) or decreasing the denominator (P). Restaurants and food and beverage industry players boost benefits (+B) by offering consumers larger portions, such as combo meals and super sizes, and improved taste, by adding salt, sugar, and fat, to hook consumers (Moss, 2014). They make their products and services widely available at convenient locations often open 24 hours a day and 7 days a week. In addition, they create intangible value through advertising and sales promotions. They enhance their brand equity by associating their images and products with celebrities, such as prominent actors and actresses, musicians, athletes, characters, events, and public interest campaigns. Alternatively, they can create value by reducing prices and the time and effort needed to purchase (−P).

Value pricing

Many leading food and beverage manufacturers and fast-food restaurant chains adopt value pricing, which entails modifying benefits and price concurrently—offering more for less. Value pricing encourages families and individuals to replace home-cooked and healthy food with widely available less-healthy foods, beverages, and meals, conveniently offered at very low prices. Research suggests that

there is an inverse relationship between energy density of foods (kJ/g) [i.e., the number of calories in an amount or volume of food] and energy cost ($/MJ). Energy-dense grains, fats, and sweets represent the lowest-cost dietary options to the consumer. (Drewnowski & Darmon, 2005, p. 900)

Nonlinear pricing and quantity discounts

Another key strategy for delivery of high-energy foods to consumers is nonlinear pricing. Typically, prices of goods or services are set on a per-unit basis, as when, for example, two sandwiches cost twice the price of one. This practice is known as linear pricing. When an additional product is offered free or for a marginal cost, which is lower than the original price, or there are quantity discounts, the strategy is known as nonlinear pricing. Restaurant chains and food and beverage marketers persistently encourage overconsumption by offering “combo,” “bundle,” “shareable,” “family,” and “supersize” portions as well as other variations of nonlinear pricing.

Popcorn, one of the most overpriced products in the market—sold by movie theater concessions with a markup of 1,275%—offers a good illustration of a nonlinear pricing strategy (Crowe, 2010). If movie theater concessions were to adopt a linear pricing strategy and charge US$0.35 per cup of popcorn, for example, moviegoers would pay US$3.85 for a small (11 cups), US$7.00 for a medium (20 cups), and US$14.00 for a large size (40 cups). In actuality, movie theater concessions adopt nonlinear pricing strategies. In one theater recently visited for this research, the price of a small bag of popcorn was US$6.25 (US$0.57/cup), a medium bag was US$7.00 (US$0.35/cup), and a large size, including one refill, was US$7.25 (US$0.18/cup). The large size offered the best customer value (V = B/P), helping theaters to sell more popcorn; implicitly, frugal eaters must pay, per cup, more than 3 times the unit price paid by those who overconsume.

As the example above illustrates, consumers are encouraged to buy food and beverages in larger quantities than they actually need. A 2-L (67.6 oz.) bottle of Coca-Cola is commonly priced around US$1.67 or US$0.025 per oz. Frequently, this product is on sale for US$0.99 per bottle, or about US$0.015 per ounce. An eight-pack of Coca-Cola 7.5-ounce mini cans typically retails for about US$3.67, or US$0.061 per ounce, roughly 3 to 4 times more per ounce. Rarely is this version of the product (Coca-Cola) on sale. Even though there may be additional costs associated with developing, producing, and distributing smaller packs of new low-calorie products, it is improbable that this could justify per-unit premiums of 300–400%.

How does this marketing strategy relate to obesity? There is evidence that most people consume more when the food or beverage is served in a larger container. In one experiment, moviegoers received either a free medium or large bag of 5-day-old popcorn. Although all participants disliked the popcorn, those given large containers consumed 33.6% more popcorn than those given medium containers (Wansink & Kim, 2005). Another empirical studied concluded that “unrestrained eaters consume more calories from large food in a large package” (Scott, Nowlis, Mandel, & Morales, 2008, p. 391).

In today’s marketplace, consumers must pay a premium for smaller portions or face the difficult task of limiting their consumption to some counterintuitive fraction of oversized containers. The result is that consumers are discouraged from limiting their caloric consumption through purchasing choices. Those determined to buy smaller amounts are faced with punishing prices. Moreover, scholarly research suggests that “restrained eaters consume more calories from small food in small packages” (Scott et al., 2008, p. 391).

Psychological pricing

Prices also have a psychological component. For this reason, most food and beverage and fast-food retail prices are expressed as “odd prices,” such as US$4.99 for a dozen 12-ounce cans of Coke instead of US$5.00. Research has demonstrated that foods and beverages offered for just a few pennies below a round number are more likely to be purchased (Schindler & Warren, 1988). Another pervasive and effective marketers’ strategy is the pricing of multiple units, such as “three for US$3,” instead of informing consumers that each unit costs US$1.00. In a study, a “three for US$3” offer increased sales by 32% compared to sales of the very same product priced at US$1.00 per unit (Wansink, Kent, & Hoch, 1998).

A related strategy, largely adopted by supermarkets, is setting quantity limits, as with “limit 12 units per customer” versus “no limit.” In a study, even with a modest discount of US$0.10 per unit, consumers bought an average of 3.3 units when there was no purchase limit. With a limit of 4 units per customer, the average sale per customer was 3.5. However, when a sign indicated a limit of 12 units per customer, the average sale per customer was 7 units (Wansink et al., 1998). Collectively, these strategies conspire to increase consumption with no upper bound rather than support consumers in matching consumption to need. These approaches may be inherently less effective with food perceived or marketed as healthy as discussed below.

Price elasticity of demand (PED)

PED indicates how changes in price affect sales of different goods and services. For instance, increases in price for essential products, such as gasoline, have smaller effects on their demand, so they are said to be inelastic. The converse is true for items that are considered as nonessential, where increases in price do cause steep decreases in demand. Various factors affect the PED of particular offerings, such the availability of substitutes, the proportion of the price relative to the buyer’s income, brand loyalty, and the amount of the discount. A review of 160 studies, published over seven decades and focusing on the elasticity of 16 different food categories, found that price elasticity for foods and beverages was generally inelastic but exhibited significant internal variability by food types. The article concluded that consumers’ responses to price changes varied the most for soft drinks, juices, and meats. They varied the least for eggs, sweets and sugars, cheese, and fats. In addition, consumers were more responsive to price changes of food away from home than of food consumed at home (Andreyeva, Long, & Brownell, 2010).

When the percentage of the change in quantity demanded is the same, as prices increase or decrease relative to a reference point, the elasticity of the demand is considered symmetric. However, for some products and services, PED is asymmetric. That is, the impact on the quantity sold can differ when prices are increased or reduced relative to a reference point. Studies have suggested that consumers’ responsiveness to food price changes is asymmetric (Talukdar & Lindsey, 2013). However, the direction of the asymmetry differs for healthy and unhealthy food. In the case of the former, consumers seem to respond more strongly to increases in price than to reductions. Suppose that the price of a salad in a fast-food restaurant, a healthy food item, is increased by 20%. This price change might cause a drop in sales of 30%. However, a price reduction of 20% in the price of the same item may only increase sales by 10%. In this case, the demand elasticity is asymmetric, and a price increase has a stronger impact on sales than a price decrease. Conversely, sales declines due to price increases of unhealthy foods are not as significant as the sales gains when prices drop. The result of these pricing strategies and demand dynamics favors unhealthy food items. Healthy food choices, because of asymmetric demand elasticity, are incompatible with traditional marketing practices that look to maximize consumption. Healthy approaches to consumption that make use of portion control are similarly at odds with traditional industry marketing. Sensitivity to price also varies for different groups. For instance, price tends to be more important in the purchase decisions of low-income consumers (Steenhuis, Waterlander, & Mul, 2011). As a result, the traditional industry marketing of healthy foods is likely to be particularly ineffective among low-income consumers.

Intangible value—The soda industry case

To influence the perceived value of products and increase demand for them, the food and beverage industry has also added intangible benefits to their offerings. They link products/brands with characters, cultural and sports events, and celebrities, and so forth, seeking to create positive associations that enhance the intangible value of their offerings. The investments are huge. In 2012, for example, music mogul Beyoncé signed a US$50 million contract with PepsiCo (Casserly, 2012), and Coca-Cola paid US$75 million to be one of six sponsors of the Brazilian TV Globo broadcast of the World Cup in 2014 (Wentz, 2014). Despite its massive investments in brand image, the U.S. soda industry saw sales decline from 2005 to 2013; in the final year of this period (2013), the decline was 3% (Wahba, 2014). More consumers are becoming aware that sweetened beverages constitute a major contributor to the obesity epidemic. Also, young Americans are now favoring water, coffee, and sports drinks (Esterl, 2013). The image problem and the sales decline have drawn responses by soda manufacturers.

Coca-Cola has undertaken a multimillion-dollar advertising campaign that addresses the relationship of its products to the problem of obesity, one which has taken a disingenuous approach to the enactment of CSR. The two key elements of this campaign are the characterizing of calories from food as equivalent, regardless of the type of food, and the targeting of lack of exercise, not calories, as a main driver of the obesity epidemic. The company has made generous grants to scientists, organizations, and universities willing to help the company shift the blame for obesity away from unhealthy diets (O’Connor, 2015). Rather than alter the caloric content of its products in any significant way, Coca-Cola has sought to remove negative associations with those products, thereby adding intangible value to its brand.

In early 2013, the Coca-Cola Company put out a press release entitled “Fight Against Obesity,” in which it announced its intention of “reinforcing its efforts to work together with American communities, business and government leaders to find meaningful solutions to the complex challenge of obesity” (Coca-Cola Company, 2013). The document introduced Coca-Cola’s global advertising campaign, showcasing the company’s actions to address the obesity problem.

Coca-Cola’s campaign comprised two commercials broadcast on TV and on the Internet. The first, “Coming Together,” informed consumers that all calories count, no matter where they come from. The suggestion that calories from soft drinks and from, say, broccoli are equivalent is likely to be laughable to nutrition experts however. The commercial also highlighted the company’s efforts to offer smaller and less-caloric beverage alternatives. These efforts represent an attempt to recast food items as “healthy” and “unhealthy,” by way of focusing more on the discrete nutritional value of products within a broader balanced diet.

The second commercial, “Be OK,” focused on physical activity but also followed the first commercial in the selective presentation of nutritional information. It mentioned that, to help consumers make better choices, 12-ounce Classic Coke cans would display the information—140 calories—up front. However, it did not mention that one can of Coke has 39 g (9-1/3 teaspoons) of sugar, more than the maximum sugar daily allowance recommended by the AHA. The AHA suggests that women consume no more than 25 g (six teaspoons) of sugar per day and men no more than 38 g (nine teaspoons; Coffman, 2013).

The primary thrust of the second commercial, as stated above, was to suggest that minimal levels of physical activity could prevent possible weight gain from consumption of Coca-Cola’s products. It referred to Classic Coke’s 140 calories as “happy calories” before encouraging consumers to “burn those calories off”—this may be understood as an attempt to reduce the perceived health cost of the product to boost its intangible value. The operative term was “happy”: The commercial claimed that “extra happy activities” such as “75 s of laughing out loud” and “one victory dance” were sufficient to offset the intake of calories (Hall, 2013). However, the average adult needs 15 minute of intense exercise to burn 140 calories (Ashe-Edmunds, 2014). A child would have to bike for 1 hour and 15 minute to burn off the calories of a 20-ounce can of Coke (Soechtig, 2014).

Reliable validations

Another technique food and beverage and fast-food companies have employed to persuade the public they are sincerely addressing the relationship of their products to obesity is the involvement of trustworthy public figures in their advertising campaigns. In early 2014, the fast-food chain Subway signed on to a 3-year commitment to support First Lady Michelle Obama’s “Let’s Move” initiative. To reciprocate, Ms. Obama visited a local Washington D.C. Subway restaurant and endorsed Subway’s new healthier menu choices for kids. The First Lady stated,

I’m excited about these initiatives not just as a First Lady, but also as a mom. Subway’s kids’ menu makes life easier for parents, because they know that no matter what their kids order, it’s going to be a healthy choice. (White House Press Office, 2014)

Encouraging parents to take their children to fast-food restaurant chains, instead of preparing healthy home-cooked meals, does not sound like good advice, since this behavior is universally considered a key cause of the obesity epidemic (Rashad & Grossman, 2004). Also, a look at the chain’s menu establishes that the statement, “[N]o matter what … kids order [at Subway], it’s going to be a healthy choice,” is incontrovertibly incorrect. Despite its efforts to include healthy items on its menu, Subway induces overconsumption by offering 12 in. sandwiches with nearly 1,000 calories for US$5.00, while it charges approximately US$4.50 for a 6 in. sandwich with half the calories.

Ms. Obama is in good company when it comes to endorsing restaurants and food and beverage marketers. Also in 2014, during the 10th Annual Clinton Initiative in New York, Coca-Cola, PepsiCo, and Dr. Pepper, the three largest soda companies, announced their commitment to cut the number of calories in sugary drinks by 20% by 2025. In an interview with The New York Times, President Bill Clinton observed, “This is huge. I’ve heard it could mean a couple of pounds of weight lost each year in some cases” (Strom, 2014). Mr. Clinton’s testimony about the impact of the initiative is conspicuously evasive and unclear. Experts claim that the three companies were promising and taking credit for something that will occur anyway. Nevertheless, the endorsement by such a prominent public figure guaranteed extensive coverage of the proposal and possibly helped to counter the soda industry’s negative image.

Calories and cents

In the second half of 2013, BK, the second-largest fast-food chain in the United States, launched the new “Satisfries” (Burger King, 2013). By way of touting them as healthy, BK claimed that the new crinkle-cut French fries had 40% less fat and 30% fewer kcal than the same-size portion (190 g) of the fries of their competitor, McDonald’s (with 154 g of fat and 500 kcal). BK chose not to mention that the same-size portion of its “Classic” fries also had 500 kcal. In fact, this serving size of Satisfries has 410 kcal, a reduction of merely 18%, not the 30% advertised. Moreover, customers choosing Satisfries over BK classic fries paid a 20% premium, or penalty, assuring BK a significantly higher margin. Undercutting this ostensible effort to provide a healthier option, during the same period of time BK was promoting the new Satisfries it aggressively advertised a two-for-US$5 sandwich deal, encouraging consumers to eat hundreds of extra calories for a slight marginal cost.

Evidence supports the idea that marketers have pervasively promoted combo and super-value deals that disproportionately raise calories as compared to cents. This approach to the pricing of the healthy alternative is by no means unique to BK. For example, Sbarro’s, a popular Italian fast-food chain, has also embraced the healthy trend by introducing the “skinny pizza,” a slice of which (183 g) contains 270 kcal, whereas a slice of the regular cheese pizza (210 g) contains 410 kcal. However, consumers must pay a premium of 20–30% for the savings in size and calories. Those looking for a better value are more likely to buy deeply discounted large pizza pies.

As illustrated, while leading fast-food restaurant chains have launched smaller portions and healthier product alternatives, in most cases, consumers pay a substantial premium for them. It is likely that consumers enticed by the new and heavily advertised healthier choices find themselves at the point of sale forced to choose between great deals for high calories and higher prices for healthier alternatives. In defending themselves from criticism, the restaurant and the food and beverage industries have argued that consumers have choices (Riemenschneider, 2013). Consumers only have choices if healthy products are marketed and made available at prices comparable to the unhealthy alternatives. Otherwise, the consumer choice suggestion is a fallacy.

Vicarious fulfillment: McDonald’s salads don’t sell

Many customers looking for the most bang for their buck turn to McDonald’s “Dollar Menu,” which accounts for almost 15% of sales (Bradford, 2013). In 2013, the chain’s list of deals was renamed “Dollar Menu and More” to include a few somewhat costlier items, such as the Bacon Habanero Ranch Quarter Pounder (610 kcal) and the Double Quarter Pounder with Cheese (750 kcal). Although the cost of many items on the new menu ranges from US$1.00 to US$2.00, McDonald’s salads (140–450 kcal) are priced just below US$6.00 in most stores. In light of the differences in PED for healthy and “unhealthy foods” described above, it is no surprise McDonald’s salad sales are consistently poor. McDonald’s, the fast-food industry leader, claims that it has allotted one sixth of its advertising budget to salads. However, they make up a disappointing 2–3% of sales and do not drive growth (Clifford, 2013). Apparently, “salads just don’t sell” (Jargon, 2013). Why is this corporate behemoth wasting advertising dollars on a failing product? Is it an altruistic bid to increase the demand for healthy food items?

Empirical investigations have examined how consumers’ food choices are impacted by the mere presence of healthy options on a menu. Research has suggested that “the healthy food option vicariously fulfills nutrition-related goals” (Wilcox, Vallen, Block, & Fitzsimons, 2009, p. 380). Thus, consumers not only reject the healthy alternative but also make poorer food choices than they would normally, if no healthy options were presented. The healthy item, ultimately, gives consumers a pass to indulge. This observation may help explain why some efforts to educate consumers to make healthier selections have not been as effective as initially thought. Studies assessing the impact of food labeling and food choices in New York City (Vadiveloo, Dixon, & Elbel, 2011), for example, have failed to find differences in calories purchased before and after the introduction of mandatory calorie labeling among low-income people (Elbel, Kersh, Brescoll, & Dixon, 2009), children, and adolescents (Elbel, Gyamfi, & Kersh, 2011). Advertisements for healthy items like salads could help drive health-conscious or well-intentioned consumers to the door. Once inside a restaurant location, advertisements for salads may actually facilitate the consumption of traditionally unhealthy food items, priced to maximize calories and portions.

Conclusions and Recommendations

This article has discussed how leading players in the fast-food restaurant and food and beverage industries have responded to public pressure about their roles in the obesity epidemic. They have engaged in public-interest campaigns related to obesity and have offered both smaller portions and healthier alternatives. Given the increasing interest in stakeholder marketing—“the design, implementation and evaluation of marketing initiatives so as to maximize benefit for all stakeholders such as customers, employees, shareholders (i.e., actors that operate in the business domain) as well as nonprofits, the environment and society in general” (Financial Times, 2015)—one might consider these campaigns to be an example of this phenomenon. However, the companies have taken these steps not only because they needed to confront their image problems but also because they saw attractive market opportunities. Coca-Cola, for example, has experienced a sales decline but a rise in its profits. According to Sandy Douglas, president of the company’s North American business, the higher profits are partially explained by strong growth in sales of small and “specialty” packages, such as 8-ounce cans and glass “contour” bottles, which account for less than 15% of all the soda Coca-Cola sells (Strom, 2015).

Advertising products as overtly healthy certainly appeals to some consumers; however, it may not create incentives for those consumers who are not already highly motivated. At the same time, representing products as healthy may oversimplify the nutritional profiles of products and needs of consumers. Ultimately, the industry’s fundamental approach to creating customer value is based on maximizing consumption. Current initiatives to limit portions or offer healthier alternatives seem more geared toward short-term profits than sustainable delivery of healthy value to consumers. In order to encourage consumption of healthful foods, the food industry must reexamine not only the nutritional content of its products but also its fundamental approach to creating customer value. We should note that we are not taking up the nutritional content of products, an important task best left to nutritional experts (Lingas, Dorfman, & Bukofzer, 2009).

Indeed, marketers have responded to consumer demands for healthier foods. However, many of them have been faster in revising their presentations than their products. Continually falling sales of certain unhealthy products, like sodas, may be an indication that consumers are taking note. As a way forward, marketers might work with nutrition experts to make items healthful but continue to emphasize the qualities that sell, such as taste and affordability or newly appealing categories such as “freshness” or “organic.” This approach might be combined with increased efforts to promote nutritional literacy among consumers, so the latter may assume greater control in deciding which products are healthy rather than relying on packaging and messaging. In addition, this process may benefit from campaigns demarketing certain products considered major causes of the obesity epidemic, such as sugary drinks, similarly to efforts discouraging tobacco and alcohol consumption.

For its part, the food and beverage and fast-food industry must be held accountable for the consequences of the use of its products, if it is truly to live up to a CSR standard. Practices aimed at communicating harm, restricting marketing practices, and developing safer products would be more appropriate (Massin, 2012). The current approaches are aimed at increasing, rather than tempering, harmful consumption by minimizing risks (Dorfman, Cheyne, Friedman, Wadud, & Gottlieb, 2012). This study contends that consumers, the media, opinion leaders, and legislators must be accurately informed and educated about misleading marketing and pricing subterfuge that, ultimately, aggravate the obesity epidemic.

There is a vast literature discussing the societal and individual causes and solutions to the obesity problem (Kim & Willis, 2007). One must only examine serving-size suggestions on nutritional packaging and the proliferation of tools to help manage portions to see how often mismatched serving containers are to nutritional needs. Likewise, myriad strategies to confront the obesity epidemic have been proposed and tested (Anderson, Harrison, Cooper, & Jané-Llopis, 2011; Andrews, Silk, & Eneli, 2010; Niederdeppe, Porticella, & Shapiro, 2012). Public-health experts and political leaders have advocated subsidies for healthy foods and tougher regulation to control the marketing of unhealthy foods, such as the taxation of high-fat and high-sugar foods and beverages (Jou, Niederdeppe, Barry, & Gollust, 2014). Taxation has proved successful in reducing tobacco use and has a crucial role in addressing obesity. However, obesity may be a more complex problem, since food marketing cannot be completely curbed and human beings must eat in order to live. Successful market approaches that encourage health and support sustainable profits will help companies adhere to regulations rather than look for ways around them. Business and public-health experts must work together to develop and encourage marketing and pricing practices that benefit consumers and businesses. The benchmarking of successful experiences to discourage unhealthy food consumption carried out around the world is also necessary. In some countries, for example, front-of-package traffic light signals are used to draw attention to the good, bad, or neutral health value of a food. As a result, many shoppers have been avoiding packages displaying red dots (Brody, 2014).

Recently, the rate of obesity in the United States has declined slightly. The discussion in the media of evidence on the causes and risks of obesity seems to have changed the attitude of the public toward this serious health problem (Sanger-Katz, 2015). However, this does not mean that a critical perspective is no longer necessary. Informed consumers must continue to demand that the food and beverage industry be more and more socially responsible in its business practices. The aim of this article has been to support consumers in their evaluation of what food and drink is being marketed to them.

Footnotes

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This study was supported by grants from the National Institute of Science and Technology for Health Technology Assessment (IATS) and the National Council for Scientific and Technological Development of Brazil (Conselho Nacional de Desenvolvimento Científico e Tecnológico: CNPq/Brazil).

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