The World’s Biggest Industry Just Got Served

The FDA’s new food labels catch up to reality — and will drive the biggest shift the industry has seen in recent history

It could save the US economy tens of billions of dollars a year, and its proponents claim it will save or extend millions of lives. The Wall Street Journal called it “radical.” Major industry giants lobbied against its implementation and warned of mass consumer confusion and uncertain scientific validity. It took years to crawl through one of the largest bureaucracies in the US government, and represents the largest update to that department’s public policy in more than two decades.

The subject at hand? A new version of the familiar Nutrition Facts label, which sits on every packaged food product sold in the US. Late last week the FDA finally announced a new food labeling regime, and it takes aim squarely at a new public enemy #1: Sugar.

The news came last Friday, the weekday all politically sensitive news goes to die. I’d have missed it myself had it not, by pure coincidence, come out one day after I sat down to interview my first guest on the Shift Dialogs, a new video series we’re producing with our partners at the Nasdaq Entrepreneurial Center.

My guest was Dr. Jordan Shlain, a peripatetic and entrepreneurial physician who has started several health-related businesses and has taken an active stand against processed sugar through a foundation he founded with Dr. Robert Lustig, a noted pediatric endocrinologist who has seen the devastating effects of childhood diabetes firsthand. Lustig’s 90-minute lecture, “Sugar, the Bitter Truth,” has nearly 6.5 million views on YouTube and has been called “sugar’s tobacco moment.”

Shlain is also a close friend, so he was willing to put up with all the hiccups and warts inherent to shooting the pilot of a new series. Toward the end of our conversation Shlain and I discussed his foundation, the Institute for Responsible Nutrition, and he noted that new FDA regulations were coming soon. The next day, the news dropped.

And the news is stunning. Among other changes, the FDA is requiring all food manufacturers to identify and call out all “added sugars” in their products. Previously, these added sugars were hidden in the “Total Carbohydrates” section of the label, and only naturally occurring sugars were called out. Take a look at the FDA-provided comparison of sugar labels — I’ve circled the shift in sugar content:

That looks like a twelve-fold increase in reported sugars in this one example, but this example isn’t exactly accurate — “Total Sugars” has in the past included added sugars, but until now those added sugars were not called out. The processed food industry regularly injects an extraordinary amount of sugar to our diet — but until last week, consumers weren’t informed of that fact. Here’s the Wall Street Journal on added sugar in the American diet:

“Government health officials recommend eating no more than 50 grams of added sugars — or the equivalent of 12.5 teaspoons of granulated sugar — a day, based on a 2,000 calorie diet. However, the FDA estimates Americans on average consume the equivalent of 20 teaspoons through added sugars like honey, high-fructose corn syrup and other sweeteners.”

Put another way, the average American consumes 60% more sugar than they should — and that’s based on US figures. Other health organizations suggest we should limit our sugar intake to six teaspoons a day, or less than half the amount recommended by the FDA. Lustig and Shlain were blunt when I asked about the impact of sugar in our society: They called it a massive public health and financial crisis. More than a third of all people in the US have diabetes-related diseases, and our healthcare system has ballooned to consume nearly 20 percent of our overall GDP, with healthcare costs are rising far faster than either real income or overall GDP.

That’s simply not sustainable — and it augurs a massive shift in consumer behavior and business practices. The food industry is the largest sector of the global economy, estimated by the World Bank to comprise ten percent of all economic output. And the largest food companies — Coca Cola, Nestlé, and General Mills, for example — have developed sophisticated economies of scale based on the chemistry of processed sugars. Sugar not only makes food taste better, it also helps foods retain their texture and form during transport and storage.

Because sugar is a fundamental building block of the worldwide food system, it’s also one of the most heavily subsidized by governments. We’ve built our society on sugar — and we’re now realizing that our approach is killing us, both physically and financially.

So while a label seems like an afterthought, the FDA news is actually a significant milestone. Nearly 8 in 10 Americans use food labels as a shopping guide. When the new labeling system goes into effect — in summer of 2018 — the impact on the food industry will be massive.

We live in an age of data. Food labels are a window into the data ecosystem that comprises the food industry, and that window just got a bit more transparent. Kudos to the FDA, and to the food industry itself, which fought the regulations tooth and nail, but in the end, capitulated to the reality of the facts on the ground. The new leaders of the food industry will be those who do more than simply bend to a new labeling regime, but instead focus on innovation and transparency to earn the newly informed public’s business by creating the next generation of healthier and more sustainable food products.

The video above is a short preview of my conversation with Dr. Shlain, who also edits a publication called Tincture. The Shift Dialogs will debut next month.

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