Can companies Unilever and PepsiCo make us healthier?
With an ever-growing number of health-care consumers becoming ever-more cost-sensitive, CVS is at an advantage.
For five years, Derek Yach pushed to make PepsiCo – the brand behind munchies like Lays and Cheetos – a producer of healthier, lower sodium, lower sugar foods and beverages.
The responses were both sweet and salty.
“There are parts of a company where the support and awareness of the needs to change are very high,” Yach reflects. “But of course there were many who isolated me.”
Yach is attending this year's Aspen Ideas Festival in Colorado as corporate insiders reflect on their role in creating a healthy society. He was brought on by PepsiCo’s CEO, Indra Nooyi. Yach says she saw the potential of a multinational to influence public health with different products.
“While I was there, I saw the growth of hummus, the launch of dairy products for the first time, yogurt, and we saw a range of other healthier products being tested," says Yach.
Still, the company wasn’t willing to invest as much into research and new products as Yach had hoped. He's now with a health research group called The Vitality Institute, but says unlikely companies are coming together with an interest in health and prevention.
“They include companies like Samsung, Microsoft, General Electric, small startups,” he says. “They’re looking of a root to profitability through new products to promote better health, whether it's devices or smart phones, or alerts, or adherence. And they’re looking at how it’s going to benefit the bottom line, and people’s personal health.”
Power From Behind The Counter
Rather than wait for consensus, or for the government to make the first move, drugstore chain CVS is trying to make the products behind its counters healthier. In October, CVS will stop selling tobacco products altogether, wiping out an estimated $2 billion a year in sales.
Dr. Troy Brennan, Chief Medical Officer and Executive Vice President of CVS, says it will be only a short-term loss.
“If you’re creative, you’ll be creative to the bottom line,” Brennan says. “Taking two billion out now, long-term that’s going to be a smart decision.”
He admits a lot of people were holding their breath before the announcement, expecting the stock to drop. Instead, Brennan says, it went up.
“We’re beginning to know we have to do something to take better care of ourselves. Companies that do those sorts of things, I think consumers are attracted to that and that’s the business interest.”
Across the pond, supermarket chain Tesco is also trying to nudge customers towards healthier decisions. By the end of the year, Tesco will remove displays of chocolates and candies at the checkouts in grocery and convenience stores.
Many more corporations are turning inwards and focusing first on wellness among employees. Yach says whether companies are changing products in stores or implementing health programs for workers, evaluation by a third-party will be key to understanding what works.
“The win will come through seeing whether the companies who do the right thing will see the uplift on the share price over the long term,” he says.