We live in a world today where one billion people – that is one in every seven people on the planet – are undernourished. At the same time, more than one billion people are overweight, including some 300 million people who are obese. Both undernutrition and overnutrition are forms of malnutrition, and both harm human health and impose enormous costs on society. Transnational food corporations are intimately involved both in feeding the overnutrition crisis through their investment in the global snack food industry and in their investment in new food products to treat the crisis of undernutrition.
The twin problems of overnutrition and undernutrition were highlighted by the UN Special Rapporteur on the Right to Food, Olivier de Schutter, in the presentation of his latest report to the UN Human Rights Council yesterday: “The Right to an Adequate Diet: the Agriculture-Food-Health Nexus.” At first blush these two trends – under-nutrition and overnutrition – seem to be quite opposite from one another. Yet there are a number of connections between them and they exist side-by-side in many countries.
The forces driving both of these trends, as de Schutter points out, are in fact tightly linked. High levels of agricultural subsidies in industrialized countries bring down prices for maize and soy that end up as ingredients (fillers, sweeteners, oils) in highly processed food. These subsidies make unhealthy foods cheap and drive poor country farmers into poverty by undercutting their markets for basic grains.
At the same time, the growing global reach of agrifood supply chains has globalized diets rich in highly processed ingredients, sugar and fats. Many developing countries are encouraged by multilateral lending agencies to export their high-value and micronutrient-rich fruits and vegetables to wealthy countries, while at the same time they become dependent on imports of cheap refined grains that are micronutrient-poor from those same countries.
De Schutter’s policy recommendations include a range of measures: impose taxes on unhealthy foods, regulate the amount of fats, salt and sugar in processed foods, curb advertising on junk food, cut agricultural subsidies and support local food systems that promote sustainable, diverse and healthy diets. All these suggestions are excellent. But there is one potential hitch that may slow down progress on these fronts: the vested interests of the transnational food companies that profit handsomely from unhealthy eating habits (which contribute to overnutrition) are at the same time developing products to address undernutrition.
First let’s take a closer look at the firms driving the overnutrition trend. The snack food industry is a major growth sector for transnational agribusiness. Not all snack foods are bad, but sugary drinks and high fat, high salt, and highly processed snacks form the bulk of this sector, and these are the very products that contribute directly to overweight and obesity. The global value of the snack foods industry is expected to reach $330 billion by 2015. Corporate concentration in this sector is accelerating as global food giants rush to get a piece of snack action, especially in emerging economies.
Just a few weeks ago, for example, Kellogg purchased Pringles in a $2.7 billion deal that makes the company now second in the global snack market only to PepsiCo (owner of 4 out of 5 of the top snack brands in the world). Kellogg’s aim was explicitly to make the firm “truly a global cereal and snacks company.” Indeed, Pringles potato chips are already sold in over 100 countries.
The Pringles deal comes only months after Kraft spun off its grocery business in order to create a high growth snack-oriented unit separate from its slower-growing groceries unit. It was Kraft’s hostile takeover of Cadbury just 18 months earlier (a deal worth $19 billion) that bolstered its snack food lineup to enable this split. Kraft now expects fully 40% of its $32 billion snack business to come from rapidly growing developing countries.
But it’s not just the foods contributing to overnutrition that have transnational food companies excited about market opportunities. As pointed out in this recent report of the UN Standing Committee on Nutrition, these firms are also investing in the development and marketing of new food products designed to address micronutrient deficiencies, including ready-to-use therapeutic foods (RUTFs) that are the new darlings in the humanitarian aid industry. These RUTFs closely resemble snack foods products in the way they are packaged and designed to be eaten.
Plumpy'Nut is a prime example. A micronutrient rich and highly caloric peanut paste, this product is widely seen as a “wonder cure” for severe acute malnutrition. It is hermetically packaged in a shiny plastic and foil pouch and can be easily administered at home. But it is also patent-protected. Nutriset, the French company that developed the product, guards its patent carefully. It only provides a licence to certain developing country producers while shutting out potential producers in industrial countries. The patent is currently being challenged by several US based nonprofits. Nutritset has also developed other patent-protected products, such as Plumpy’Doz, as supplemental foods for the prevention of malnutrition, that are designed for a much wider group of mildly malnourished people. The current global market for RUTFs is around $200 million.
Nutriset claims that it protects its patent to ensure that developing country producers of the product are not undercut by cheap versions from industrialized countries. But other agrifood giants are edging in on the rapidly growing RUTF market. Pepsico, Unilever, and Campbell’s Soup, for example, have developed their own RUTFs. These firms claim that they are entering this market in a nonprofit capacity, as part of their corporate social responsibility.
There may be an important role for transnational firms in the fight against undernutrition. But at the same time, it is important to watch these developments carefully. It would be a tragedy if the undernourished recover from their condition with corporate nutritional products only to become consumers of unhealthy snack foods made by the very same firms.