The food industry plays its marketing strategies like cards — close to the vest. That’s why it was so interesting to see this week’s congressional report on kids marketing prepared by the Federal Trade Commission. Based on a round of subpoenas sent by the government, the results show that 44 major food and beverage companies spent a total of $1.6 billion promoting their products to kids in 2006.

Who did the spending? Fast-food restaurants, carbonated beverage companies and breakfast cereal manufacturers were tops, according to the study. This is unfortunate for a number of reasons, the most obvious being that there is an inordinate number of overweight and obese children in this country. One recent study shows that this trend might be leveling off, but that’s not entirely conclusive: Another report from John Hopkins University postulates that 86% of Americans will be overweight or obese by the year 2030.

More to the point for retailers and manufacturers, though, is the fact that kids these days don’t just crave Pop Tarts and Cocoa Puffs. As studies and stories are showing, their tastes are becoming more sophisticated. Part of this is because mom and dad have started buying them things like all natural and organic snacks. It’s also because a lot of kids have come to the conclusion that, gee, going green is pretty cool. Not only are they asking for environmentally friendly products — they’re pestering their parents to do the same.

In its report, the FTC gives credit to the self-policing strategies that many companies have adopted, including the Children’s Food and Beverage Advertising Initiative, established by the Council of Better Business Bureaus in 2006. The commission notes, however, that more needs to be done to promote nutritious food to children.

This isn’t something that companies should do because the FTC said so. Promoting healthful and sustainable products for kids can pay off big for retailers. And it just so happens to be the right thing to do, too.

Consumers are getting the message that they need to eat more local, organic and fair trade certified food. But, as I’ve mentioned before, they’re having trouble deciphering what exactly these terms mean. How fair is fair trade? What are the standards for organic? And, for that matter, how do you define local?

How about this for a solution, then: Eat a peanut butter and jelly sandwich. This is the simple proposal behind a new grassroots movement that’s building momentum with eco-minded consumers. The PB&J Campaign, as it’s called, doesn’t advocate eating just PB&Js, however. They’re pushing for people to consume more plant-based foods, since the production process creates significantly less greenhouse gases than their animal-based shelf mates. Instead of a hamburger or chicken nuggets, try a salad. It’ll conserve the equivalent of 2.5 pounds of carbon emissions, according to the campaign website.

There’s a lot of complicated science behind the campaign’s proposals, but the PB&J gang manages to sum things up pretty succinctly. This is a measure of not just how sophisticated the sustainability movement is, but how accessible it’s becoming. You don’t have to be a food nut or an activist to know what’s required to make a difference.

Supermarket retailers do a pretty good job of tapping into the various movements out there, like providing local and seasonal products. But they also need to understand the desires and attitudes that fuel these movements. Shoppers want to do their part to conserve energy and help the environment. They not only want the transparency that will help guide their choices — they want the message to be simple and compelling enough to act on.

Did you see the two-page Q&A in the current issue of Smart Money magazine conducted with Jim Skinner, CEO of McDonald’s? Here’s a bite:

Q: …. If you wanted to shift eating habits more, you could.
A: If the consumer wants it. We can sell anything we want, but people have to buy it. If you look at the quality of the products and balanced choices we have, we’ve done more than anybody in the industry. But if you can’t get your kids to eat vegetables, why is it my job?

The italics in the last sentence are mine, because that’s one heckuva interesting point. At first, it sounds arrogant and callous - typical Big Business thinking. But Skinner (whose leadership has doubled the company’s stock price since he took over four years ago) points out that McDonald’s buys 39 million pounds of apples a year, more than anyone else in the country. Sure, some of them go to make those deep-fried apple pies, but others go into salads and the kids meals as Apple Dippers.

But Mickey D’s is not going to go around shoving these products in people’s faces. In his comment, Skinner implicitly acknowledges a fundamental truth about all fast food: It’s where convenience and taste and price trump health — always. Remember, McDonald’s is a burger chain. Its iconic status prevents it from being anything else. Remember Wendy’s and that chain’s 10-month fruit bowl experiment in 2006?

Skinner puts it this way in the Smart Money interview: “It’s not my job to take away; it’s my job to add and say, here are some choices. You have to make the decision.”

Indeed. Here that, Los Angeles? The city council there is weighing a moratorium on new fast food restaurants in one part of the city where QSRs proliferate among low-income neighborhoods. The idea is to implement a year-long ban so civic officials can try and attract more healthful outlets.

Our question is, Why? Spend the money educating consumers about proper dietary habits. Invest in community supported agriculture and farmers markets. Highlight diet and exercise as part of the local school curriculum. Armed with these “options,” consumers will have the power to create more change than any city council could.

Read Skinner’s comments again, and you see he alludes to the true solution, even while defending his company’s nutrition leadership. Until consumers want to change, fast food venues like McDonald’s and Church’s won’t.

This week, we found out that soy has been linked to male infertility, particularly in certain classes of men. Researchers at Harvard University found that half a serving of soy food per day may lower sperm counts. While the exact cause hasn’t been determined, there’s a suspicion that soy somehow affects estrogen activity. One clue supporting the theory came from overweight and obese test subjects, who naturally seem to produce more estrogen. Their results were worse than those of mid-weight of skinnier guys.

Soy is a bedrock of the wellness business, and is one of the the true break-out categories of the whole health universe. Vegetarians use tofu as an alternative protein; lactose intolerant consumers get to have breakfast by pouring soy milk over their cereal; and health-minded individuals try to incorporate at least a little soy into their diets because it’s known to lower cholesterol.

The last reason has been largely responsible for soy’s success. In 1999, the Food and Drug Administration concurred with research showing that soy protein lowers total and low-density lipoprotein cholesterol levels and reduces the risk of coronary heart disease. The resulting health claim, sanctioned by the agency, caught the public’s attention and today there’s everything from soy burgers to soy ice cream.

Now the wave of support seems to receding. Besides the Harvard study, the soy industry has to deal with other threats. The FDA is currently re-evaluating the Soy Protein and Coronary Heart Disease Health Claim, following a 2006 analysis of 22 clinical trials by researchers at the American Heart Association which found soy’s benefits to be much less effective than believed when the original FDA claim is was issued.

No matter what happens, soy has a place in the American diet, and on store shelves. Supermarkets are about options. Those who like soy, believe in its health properties or need it as an alternative to animal foods aren’t going anywhere.

Supermarkets have taken quite a bit of flak for their seafood standards — or lack thereof, in some cases — but it appears they’re starting to turn things around.

Yesterday, Ahold announced that all of its U.S. banner stores, including Stop & Shop, Giant-Landover, and Giant-Carlisle, have thrown their support behind the Conservation Alliance for Seafood Solution’s “Common Vision.” This is essentially a commitment to providing more sustainable seafood, as well as educating customers and supporting environmentally responsible policy. This, combined with Ahold’s ongoing relationship with the New England Aquarium, shows that the Netherlands-based company is taking seriously the threats that world aquaculture is facing today. Right now, Stop & Shop is in the process of dropping three over-fished species from its cases: shark, orange roughy and Chilean Sea Bass.

Ahold’s decision reflects an attitude that seems to be catching on in the industry. Earlier this month, Whole Foods announced that it would step up its already much-respected farmed seafood standards, incorporating additional guidelines for traceability and ecosystem management. Wal-Mart has also gotten into the game, rolling out Marine Stewardship Council certified fish and setting up standards for its farmed shrimp, among other things.

Many other companies have expressed interest in expanding and establishing standards similar to these. This is doing right by the environment, and right at a time when the seafood category could use a boost. The average American ate 16.3 pounds of fish and shellfish in 2007, a one-percent decline from 2006, when they ate 16.5 pounds, according to newly released federal statistics.

As with any measure aimed at helping the planet, sustainable seafood guidelines will mean changes for shoppers. Doing without trawl-caught haddock or orange roughy certainly won’t be the end of the world, however. And besides, there are a growing number of responsibly caught options out there.

Managed correctly and with good conscience, seafood departments should be able to meet consumer demand and still promote healthy aquaculture.

The organic community has always been of the opinion that organic food, particularly produce, is better for you than conventional. That position has been difficult to prove, but it’s been heartily defended by supporters.

Then in March, the Organic Center released a study that could prove what had long been suspected (and hoped for): Organic was more nutritious than conventional. In fact, it was 25% more nutritious.

We were waiting for the claim to be refuted. And now it has come, courtesy of the nonprofit American Council on Science and Health, which just released its own review of the OC study. It concludes that conventionally produced food is nutritionally superior to organic. A professor of food science at Rutgers University and scientific advisor to the ACSH, Joseph Rosen, re-crunched the same data that the OC used, in the end finding in favor of conventional — by 2%.

So who’s to believe in all of this? Perhaps a bit of context is needed first. The ACSH has received funding in the past from corporations like Monsanto and Archer Daniels Midland that would have a keen interest in maintaining the staus quo, which currently favors conventional agriculture. Although they enlist 350 technical advisors and have for years come out swinging against big tobacco, the organization is nonetheless widely viewed as being very industry friendly. The ACSH website even has a tribute to Norman Borlaug, the father of industrial agriculture, in celebration of his 90th birthday a few years back.

On the other hand, the OCs interest in promoting organic food makes it hard to tell if organic is truly 25% more nutritious than conventional produce. With all of the various agendas orbiting the food industry, it can be difficult for retailers and consumers to get unbiased information.

But oftentimes it’s not the latest study or statistic that supermarkets need — it’s common sense. Organic agriculture, when practiced to the ideal, is a return to methods that have sustained us for centuries. Our ancestors certainly didn’t need pesticides and artificial fertilizers to survive, and to think that the lack of these chemicals would make us any less healthy today is just silly.

Healthy employees make for happy associates. The message is coming through as more retailers announce wellness programs directed at their workers. What’s interesting is the different tactics companies are using.

Safeway has been talking about tying its consumer-centric FoodFlex custom nutrition system to employee health plans; Hannaford Bros. recently began promoting a new health care program that asks associates to take more responsibility for their own wellness and their health benefits.

These programs are tied the healthcare coverage offered by employers. In fact, Safeway CEO Steven Burd has gone on record as saying he’d be willing to consider a reduction in premiums for employees who can demonstrate a healthful lifestyle. Good idea: Premiums for employer-based health insurance rose by 6.1% in 2007, according to an annual survey by the Henry J. Kaiser Family Foundation. It also notes that the annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $12,100 in 2007; while workers contributed nearly $3,300, or 10% more than they did in 2006.

Other retailers are taking a less formal route, in some cases using current events as a springboard to action. For instance, St. Louis-based Schnuck Markets is sponsoring the chain’s 15,000 employees to participate in its “Steps to the Olympics” program, which invites associates to participate in group activites in the weeks leading up to the 2008 Olympic Games in Beijing.

The program is centered on team-based activities like walking or biking. For the next six weeks, the company will record participants’ steps as they walk, jog or bike the theoretical 13.5 million steps separating St. Louis and China’s capital. Scott Schnuck, chairman and CEO of the retailer, will act as captain of his family’s walking team.

We have a feeling this is only the beginning. Stay tuned. More companies to come.

Now that it’s OK to eat tomatoes, let’s talk turkey: The most obvious losers in this most recent foodborne illness outbreak might be farmers — but the silent victims are supermarket retailers, who have to suffer the questions, the doubt and the loss of confidence expressed by shoppers.

Many supermarkets I visited during this ordeal were diligent in erecting signage at their tomato displays, in turn stating the known facts about the salmonella saintpaul outbreak, followed by reassurances that their suppliers had been cleared by the feds and that their products were safe.

Yet the displays stayed full - those big, beautiful summertime pyramids and stacked clamshells of red rounds, plum, Roma, Ugli, heirloom, local, grape and cherry tomatoes piled up in front of you like a giant Stop sign. Retailers did everything right to reassure their customers but the matter was completely out of their hands.

This being stuck in the middle is what makes the supermarket business so tough, particularly in dealing with commodities like produce, meat and seafood. Compared to five years ago, there are a lot more brand names in these categories, but bulk displays retain a level of anonymity that comes back to haunt retailers at a time like this. Consumers, seeing no label or name on the product, tend to fault the retailer who’s selling it.

This is why retailers should support any effort to develop new safety standards and implement a thorough traceback system. Hit with several big-time recalls recently, consumers are all for action, according to the AP-Ipsos poll of 1,000 adults conducted last week. One shopper quoted in the survey said she had all but “given up” on supermarket produce and now patronizes farmers markets and like venues.

“I see the same farmers every single week,” she said. “You meet the people and you see where the [produce] is coming from.”

Produce buyers can make that claim — and it seems now that consumers want to, as well.

Label claims are proliferating at a rate never before seen in the food industry, and still consumers want more. According to the results of a recent survey by Deloitte Consulting, more than two out of five people say they don’t feel they have enough information about the food they’re consuming. They want to know country of origin, along with the healthfulness and safety of ingredients. And they say they’re willing to pay more for this.

From umbrella certifications like USDA Organic to very specific claims (“a great source of calcium!”), whole health labels have become a way to better match products with the needs and goals of shoppers. This has certainly resonated with consumers, and so it’s no surprise that they desire even further clarity.

But bear in mind that too much labeling can leave consumers feeling overwhelmed. They’re especially confused right now by all the green messaging that’s out there, studies show. And who can blame them? All those claims about nutrition and ethics and sustainability add another layer to the complex choices that people already face in the supermarket.

Don’t get me wrong; I’m not trying to diminish the importance of transparency in the food system. Today’s consumer wants and deserves detailed product information. In working to accomplish this, however, the labeling emphasis shouldn’t be on “more” but, rather, “smarter.”

We’ve already touched on Wal-Mart’s sustainability drive a couple times since starting this blog last November, and we certainly hate to be repetitive. But given the company’s industry clout and the rate at which they’re rolling out these initiatives lately, the subject deserves to be revisited.

Just yesterday, the Bentonville retailer announced it would start sourcing wood for its products from sustainable, certified sources. Teaming up with the World Wildlife Fund, Wal-Mart will conduct a yearlong survey of its supply chain, then start weeding out anything that involves unscrupulous or environmentally destructive harvesting practices. The company estimates that it will take five years to transition everything over to these standards.

Barely pausing for a breath, Wal-Mart then today announced a new line of sustainable, traceable jewelry. Customers who buy anything from the Love, Earth collection can go online and track their purchase back to the mine where it originated, and also find out about the supplier’s labor and environmental practices. Wal-Mart hopes to make this a trend in its jewelry business, aiming to hold 10 percent of its offerings to sustainable standards by 2010.

There’s more, of course. Wal-Mart is also increasing its selection of local produce, sourcing more organic cotton, transitioning to 100% sustainable seafood, and selling only hormone-free milk. Among other things.

In making this commitment to ethical, eco-friendly retailing, Wal-Mart has seemingly become a gentler giant. It’s unclear whether this comes out of genuine conviction, or whether the company’s massive growth of years past backed it into a corner. Wal-Mart did garner a considerable amount of animosity on its way to the top, after all. It also remains to be seen how effective these measures will actually be within the company’s supply chain.

What is clear, however, is that these sustainable initiatives send ripples through the supermarket industry. Wal-Mart has the power to alter the supply chain and influence fellow retailers, and that could end up being a very good thing for this world.