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The Salt Wars of a New Era
In the late 1800s, wars were fought over salt in West Texas. In the early 1900s, Gandhi marched against English salt taxes. In the early 2000s, many are looking to banish salt from our lives in the name of healthy lifestyles.
Perhaps banish is too harsh a word; limit is a better description. The latest call on the Food and Drug Administration to set national standards for salt comes from The Institute of Medicine, the health arm of the National Academy of Sciences. Salt is associated with such ills as hypertension, heart disease, and stroke. In its plea, The Institute of Medicine warns that the average salt consumption in this country is several times what the human body needs.
The suggested regulation would hit processed food companies particularly hard. In fact, salt finds its way onto grocery shelves in foods ranging from breakfast cereal to canned soups—and literally everything in between. Such venerable names as General Mills (GIS) and Campbell Soup (CPB) have taken a proactive approach to this issue, likely realizing that the high sodium levels in their foods would eventually come under fire, as Value Line has highlighted in previous articles.
It will be interesting to see what becomes of the increased push for the regulation of salt. The heightened profile of salt comes on the heels of efforts to curb the use or consumption of other flavor enhancing ingredients that customers seem to love.
One successful effort to regulate an ingredient started in New York City with the ban of trans fats in restaurant foods. The change caused major consternation for fast food chains like McDonald’s (MCD), YUM! Brands (YUM), Burger King (BKC), and Wendy’s/Arby’s Group (WEN). Note that curbing salt levels would likely have a material impact on these companies, too.
With the trans fat ban, however, restaurants with a certain number of stores (a way to target fast food chains) had to post the calorie counts on their foods and, ultimately, remove trans fats from their offerings. Not all fat is bad, but trans fats are considered particularly harmful. The problem is that, like salt, they enhance flavor. Although nothing seems to have come of this concern, some companies publicly worried that the taste change would hurt sales.
Recently, there has been a drive to take on another social pariah—sugar. Taking the lead again, New York proposed—though it did not enact—a tax on sugary drinks. Publicly, the effort was intended to help reduce consumption of what are, more often than not, empty calories. The true intentions and the political intentions may, of course, not be one and the same in this situation because of the method used to alter customer behavior, but the end result is an attempt to change the consumption of yet another of the world’s favorite flavor enhancer. Clearly, drink manufacturers, such as The Coca-Cola Company (KO) and PepsiCo (PEP), were against such a tax. It should be noted, however, that both have been bringing out more “healthy” offerings over the last few years because of increased demand for such drinks from consumers.
The battles over food additives touch on volatile and complex issues, including taxation (consumption taxes are regressive in nature), civil liberties (should people be allowed to choose foods that are bad for them?), taste (many of the ingredients being targeted are popular flavor enhancers), and profitability (it is often more expensive to produce healthy fare). How these issues are handled will be interesting for both society and the companies that provide it with food.