As Fast Food Goes Healthy, What Opportunities Await Food Companies?

Analyst Q&A: Shanon Trueman

Fast food chains have been jumping on the healthy food bandwagon with varying success for some time now. Enhancing their menus with foods featuring lower fat, lower cholesterol, and lower sodium, the idea is to bolster sales and invite a new demographic into their restaurants. The anti-obesity drive is also affecting fast food restaurant menus. In 2002, a man sued McDonald’s and other fast food restaurants, claiming that he became obese eating a steady diet of their high-fat foods. The suit was dismissed, but the publicity around it was damaging, contributing to declines in fast food sales for a time.

Restaurants have attempted to add healthier items to their menus in the past, with some hits but a lot of misses, too. McDonald’s low-fat beef burger, the McLean, flopped. Pizza Hut’s addition of lower-fat pizza toppings failed. Then, things started to turn around. For example, Burger King’s grilled chicken sandwich, the BK Broiler (now called the Tendergrill), was more successful.

As fast-food chains roll out healthier menu items, suppliers and food processors will see opportunities. Nerac Food Science Analyst Shanon Trueman shared her thoughts on where those opportunities might be.

Nerac: How have fast food restaurants modified their menus to offer healthier foods, and how does that affect manufacturers of raw or processed goods that supply to these restaurants?

Shanon Trueman: Besides BK’s Tendergrill, the most visible change in fast food restaurants has been the addition of salads, such as Wendy’s Garden Sensations line. Wendy’s also carries a line of baked potato menu items with various toppings. McDonald’s, which added salads featuring Newman’s Own dressings, markets a Fruit and Yogurt Parfait that contains strawberries, blueberries, yogurt, and granola. In all these cases, sales have been strong.

However, foods marketed as healthy may not be quite what the consumer thinks. Several of the fast food salads, at least those containing croutons, bacon, and high-calorie dressings, may be higher in fat and calories than burgers. Opportunities are there exist for ingredient manufacturers willing to work with menu designers to create low-fat and low-calorie options, such as turkey bacon and dressings with lower fat and calorie content.

One development with significant impact on food manufacturers was the decision of many fast food chains in the U.S. to replace cooking oils with new formulations that significantly reduced or eliminated trans fatty acids (TFAs). McDonald’s, KFC, Eat N’Park, Wendy’s, and Popeye’s are just a few of the major chains that eliminated TFAs. And many of them made the change before jurisdictions such as New York City mandated it.

What has the response been to these healthier items?

Restaurants are hoping that the changeover will boost sluggish sales, and in some cases, sales have gone up. An article in Nutrition Business Journal reported total sales of healthy foods in 2006 at $120 billion, or 21 percent of total food sales. That’s double the numbers from a decade earlier. However, simply labeling something as healthy is not a sure path to strong sales, as McDonald’s discovered with the McLean burger.

What modifications have been made, or should be made, to ingredients that go into fast foods, fast food recipes, or fast food menus?

Besides eliminating or reducing TFA content in cooking oils, fast food restaurants wishing to introduce “lighter” or “healthier” fare must remember that taste and quality will keep customers coming back for more. Menu items must be imaginative and pleasing to the palate, as well as remaining consistent with the “fast food” concept. Wendy’s tested melon cubes as an alternative to French fries on their menus; however, the idea was nixed after the company couldn’t find a dependable year-round supplier of fresh melon. The cost of cutting up the melons was a factor, too.

The salad introductions at fast food restaurants have seen challenges, as well. Vegetables and fruits cannot be frozen and stored as easily and as cheaply as meats and French fries. Canning is an option, but it will take an innovative company to overcome taste and nutrient-retention problems.

Other alternatives to investigate include organic and non-genetically engineered meats and cheeses, and ground turkey or chicken to replace ground beef in burgers. Whole grain breads and omega-3-fortified eggs are also worth looking at. McDonald’s already serves Newman’s Organic coffees, so there could be opening for other entrepreneurial innovators to enter the huge fast food market. The ingredients are definitely more expensive, but at least one survey indicated that when people decide to eat at a fast food restaurant, a healthy menu is more of a determinant than the prices.

So, is it worth it to the fast food restaurants to market healthy food?

More than half of U.S. consumers say that they like the trend toward healthier fast food. So there are additional opportunities for fast food restaurants. However, ingredient producers, menu consultants, and food manufacturers must carefully consider past trends and consumer preferences before spending a significant amount of money on the design of a healthy food item. Still, it may be worth it in the long run, if only to help people eat healthier.

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