Are higher gas prices hurting sales of health and wellness items? Let’s face it, higher pump costs are hurting everything. A new survey of some 26,000 consumers by The Nielsen Company in December found that half of them have reduced spending to compensate for the higher price of gasoline.

Measures they’ve taken include more shopping at supercenter formats, using more coupons and buying less expensive grocery brands, as indicated by the chart below.

“Manufacturers and retailers need to be alert to the fact that consumers are looking to save by altering where they shop, how they shop and what products and brands they buy,” said Todd Hale, senior vice president of Consumer Shopping & Insights for Nielsen Consumer Panel Services. “Value, convenience and competitive pricing will be more important than ever in the year ahead.”

The three criteria Hale mentions are not the first that come to mind when thinking about wellness, particularly organics. So, you have to wonder what kind of impact a recession (are we allowed to say that word yet?) is going to have on wellness category growth.

There is one good note sounded in the Nielsen survey. Forty-one percent of the consumers polled also said they planned to eat out less, and 39% said they plan to stay home more often. Supermarkets with flexible whole-health pricing strategies will hopefully be able to do something with those numbers.

Some operators, like Sunflower Farmers Market in Boulder, Colo., already position themselves as the affordable alternative to premium wellness prices. Mike Gilliland, Sunflower’s founder and CEO, noted as much recently, when he announced an infusion of $30 million in equity financing from private investors to expand the 13-store chain.

“There is tremendous demand for an alternative to the high price format that has predominated in natural foods for so many years,” he said.

Sunflower’s motto also fits in with the times: “Serious Food… Silly Prices.”

Higher gas prices likely would have less of an impact if the economy were stronger. Unfortunately, the one-two combination here makes it even less likely consumers are springing for higher-priced organics and wellness products. If anything, the current state of the economy will likely accelerate the growth of retailers like Gilliland, who emphasize the value segment of the natural and organic categories.

Green this, eco that, but take note: Monsanto Company announced today that its latest quarterly profits nearly tripled. Your wellness shoppers will find it ironic that the increase was due, in large part, to the strength of its herbicide business, which includes the popular RoundUp brand (the other growth area was corn seed).

Many consumers have placed Monsanto in their pantheon of corporate villainy. It’s the giant, faceless conglomerate, casting its large, very dark shadow over American agriculture. The list of crimes cited by activists is short but significant: Monsanto pioneered genetically modified corn and soy plants; created recombinant bovine growth hormone (rGBH); and has asked federal regulators to ban “hormone-free” labels on dairy products.

Yet, here it is, flush with cash and raising its forecast for 2008 upwards of $0.20 a share. This is coming off a stellar 2007, when the company’s stock price more than doubled, from $52 per share to almost $112 by the end of the year.

We’re not going to pretend to know why this is. All sorts of factors are at work. However, a recent story in Business Week described a critical strategic change after Hugh Grant took over the CEO’s office in 2003. After years of deflecting public criticism over its products and activities, Monsanto began focusing on four commodity crops, including corn and soybeans. The industrial-grade products were suitable only for processing plants, and far removed from supermarket shelves and restaurant menus. Consumers no longer had all this GMO news in their faces, and the opposition began to quiet.

As a result, the Grocery Manufacturers Association reports that, up to 70% of all processed foods made in the United States today contain GMO commodities.

Love ‘em or hate ‘em, you have to admit that Monsanto deserves credit for playing smart.

The holidays are a profitable time for retailers, but so is the period after New Year’s, when everyone flocks back to stores in search of post-party remedies. The Nielsen Company issued a short report profiling this activity, noting that U.S. consumers will purchase more than $61 million on stop-smoking aids and more than $46 million on diet solutions in the month of January.

Anti-smoking and smoking alternative products generated 8.7% of annual dollar sales in January last year, an above-average share; while complete nutritional diet aids generated 9.9% of their annual dollar sales during the same period.

The advice to supermarkets selling wellness solutions is to hit shoppers now, and hit them hard, because sales drop off significantly once the month passes. According to Nielsen researchers, anti-smoking products declined steadily from more than $61 million in sales in January to $49 million in September. After a high at nearly $47 million in January, sales of nutritional diet aids dropped more than 14% to $40 million in February.

What are you doing right now to promote your stores and your pharmacies as a destination? To be sure, consumers know what’s coming. They’re already thinking of the Day of Reckoning. So shove aside the holiday stuff and make room for the new personal improvement products people will be looking for. Make a sharp, comprehensive merchandising strategy your New Year’s resolution. Your shoppers might not thank you for it, but they’ll be grateful.

The Food and Drug Administration is soon expected to make room on the dinner table for products sourced from cloned animals. Everyone expects the idea to get the green light, given that regulators issued preliminary approval last year.

But shoppers and many in the food industry are far from convinced. Nearly two thirds of consumers say they don’t like the idea of ingesting milk or meat from clones, according to various polls. Washington, in response, passed an amendment in this year’s farm bill that delays the FDA’s decision until further testing can be done.

“Before we allow cloned animals in our food supply, we must know more about it,” said Senator Barbara Mikulski, D-Md., who forwarded the amendment.

The cloning industry also has a response to the skepticism. Yesterday two of the countries leading cloning companies, ViaGen and Trans Ova, announced the implementation of a tracking system that will use electronic ear tags to follow cloned animals throughout the supply chain. Doing this, they say, will support marketing claims for retailers and manufacturers regarding whether or not a steak or jug of milk came from a cloned animal.

“This enables the food industry to segregate cloned animals from the food supply, should they choose to do so,” said Mark Walton, president of ViaGen.

But the system only goes so far. It’s voluntary (“mandatory from the perspective of our customers,” according to Walton); it also doesn’t cover the progeny of cloned animals, which are the ones that end up getting slaughtered (the actual clones are too expensive to lose). Walton said they don’t have to extend the label to cover subsequent generations because “the offspring of cloned animals are not clones.”

Technically, that’s correct. Intuitively, it might be a tough sell.

Consumer and retailer confidence surrounding the cloning issue is a must. That’s why it’s up to the food industry to demand a competent labeling system that will create transparency and a true market of choice.

For low-income families, buying cheap, high-calorie processed foods isn’t just an easy decision — it’s often a necessity. According to a study published by researchers at the University of California-Davis, most low-income families can’t fit the USDA’s recommended amount of fruits and vegetables into their tight food budgets.

Whole health advocates would like this year’s farm bill to narrow the price gap between the snack food aisle and the produce bin, which sits at just under $17 per 1,000 calories, according to a recent study by the University of Washington’s Center for Obesity Research. But it appears that’s a bust. The bill, which just recently regained momentum after being stalled for weeks, has many of the same staple crop subsidies in place that it’s had in the past.

The USDA, however, has decided to step up. Last week the agency announced significant changes to its supplemental nutrition program Women, Infants and Children (WIC), which supplies vouchers for specific foods to approximately 8 million low-income individuals. This overhaul — the first in nearly thirty years for the program, according to the USDA — will rearrange WIC’s payouts so that it gives more for whole grains, fruits, and vegetables, and less for dairy, eggs and juice. These changes will go into effect next February.

Under the new guidelines, monthly vouchers for fruits and vegetables will be $6 for children, $8 for women, and $10 for breast-feeding women. That’s higher than previous years, but it may not be enough to adequately cover the rising cost of produce, which has jumped nearly 20% in the past two years (unlike the price of Twinkies, Doritos and the like, which has remained relatively stable).

Indeed, there’s been a string of studies and articles recently highlighting the negative link between the nation’s poor and the rising cost of healthy food.

“The gap between what we say people should eat and what they can afford is becoming unacceptably wide,” noted University of Washington researcher Adam Drewnowski.

Beyond the price issue, there’s also the troubling fact that low-income areas often lack access to grocery stores with healthy selections — “food deserts”, as they’ve come to be known. Last month, Louisville’s Courier-Journal commissioned a study that found the poorer west side of town to have only one full-service supermarket per 25,000 residents, while the rest of the metropolitan area had one for every 12,500 residents.

Supermarkets and the food industry as a whole have their work cut out for them. Whether they choose to actually take action is another story altogether.

In the days leading up to Thanksgiving, there was a lot of excited talk in the halls at Topco Associates, the Skokie, Ill.-based wholesale distributor. Strangers who were present would have overheard numerous references to a mysterious “On-key.” Unseen and unkown, it seemed that On-key’s arrival was imminent.

The mystery was solved on Nov. 28, when Topco officials unveiled the Overall Nutritional Quality Index. So, “ONQI” was not a person but a comprehensive system of evaluating food products based on nutrition content. This new scoring system had been under development for more than two years by independent researchers, before Topco officials heard about it and brought it in-house as a consumer resource.

“We didn’t have much to offer on the science side, but thought this was a much better mousetrap, and that we could be instrumental in making it happen and turning it into something real,” said Steve Lauer, Topco’s president and CEO.

The real news behind the announcement, and the one I think will be talked about for some time to come, is not what ONQI is, but what it represents: A shift among retailers to a truer, more authentic leadership role. I think this program — as well as Hannaford Bros.’ Guiding Stars program — marks a key turning point in this ongoing evolution of the retailer into a full-time customer advocate. No more walking the fine line between shopper needs and manufacturer requirements. Consumer-centric initiatives like Guiding Stars and ONQI have the potential to change the way food is sold.

Sound like a stretch? Not if you ask Jeff Posner, Topco’s executive vice president.

“The manufacturers endorse the science, they understand it and they also see the positive business implications that arise from doing the right thing in the health area,” he told us last week.

“ONQI will strongly encourage manufacturers to make more nutritious products,” is how Lauer put it, adding such programs have the power to control the tainted marketing claims made by some national manufacturers. “It will also take out some of the hype that’s all too often misleading.”

When’s the last time you heard senior supermarket executives talk like that?

The fact that Hannaford announced it would begin licensing its Guiding Stars program a day after the Topco announcement indicates there will be plenty of opportunities for supermarkets to use these turn-key systems in their own stores, and this is a good thing. As Lauer put it: “Hopefully, the sum total of all of these efforts will be improved health.”

We agree. Like food safety and charity, public health should not be a competitive element in any business. Every retailer should have the opportunity to offer their customers this type of service.

Highly subsidized and plentiful in supply, high fructose corn syrup has been the sweetener of choice among American food manufacturers since the early 1970s. Since then, its presence has become almost universal. HFCS is found in everything from carbonated soft drinks to less obvious products like commercial sliced bread.

Core health and wellness consumers have long placed corn syrup on their Ten Most Wanted List of ingredients to ban. Most protests fell on deaf ears, until now. Amid alarming increases in the rates of obesity, diabetes and diet-related health problems, natural food retailers are taking a leadership role on the issue.

Most recently, PCC Natural Markets, which operates eight natural and organic stores in the Seattle area, announced the elimination of high fructose corn syrup from all of the products on its shelves.

“HFCS is a highly processed sweetener with no nutritive value and has been linked to many potential damaging effects on health. Healthier alternatives exist,” PCC spokeswoman Diana Crane told us.

The action wasn’t as arduous an undertaking as it sounds, since the chain’s consumers already exhibited more healthful shopping habits, and were aware of the issue. Indeed, the ultra-cheap sweetener had already been shut out of all but 1% of the retailer’s offerings, according to Crane.

PCC isn’t even the first retailer to take this step. Back in 2004, Asheville, North Carolina-based Earth Fare phased HFCS out of its nine natural food stores.

To be fair, corn syrup is not the only cause of the country’s health problems. Neither is it likely the biggest one. But its near ubiquitous presence in many foods has more consumers questioning whether all this sweetness, in every food item, is necessary.

It’s safe to say that such bans won’t start cropping up in mainstream markets anytime soon. Like sodium, which we covered in a blog entry last week, HFCS is just too enmeshed in our food system for conventional retailers to cut. And remember, not every consumer dislikes the sweetener.

At the same time, rumblings like this in the health and wellness industry are hard to ignore. Could a label reading “Made without HFCS” be the next “Free of Hormones and Antibiotics”?

We wonder.

The Food and Drug Administration is holding its first ever hearing on sodium regulation today in the nation’s capital. This is mainly an informational session, but that shouldn’t downplay the significance of the occasion. Sodium has long enjoyed GRAS status, but this first-ever hearing could remove the Generally Recognized As Safe designation.

For the medical community and watchdog groups like the Center for Science in the Public Interest, this hearing is a big victory. For years they’ve decried overconsumption of the popular flavor agent and have prodded the agency to take action. Numerous studies have subsequently backed them up. The CSPI has been particularly persistent, appealing to the FDA regularly over the past three decades, and going so far as to sue them twice — in 1983 and 2005. Armed with evidence and overwhelming support from the scientific community, CSPI and others want the FDA to reclassify sodium and limit the amount food retailers and restaurants can use. They’d also like the agency to require warning labels detailing the health hazards of consuming too much salt.

Studies show there’s an urgent need for regulation. The average American currently consumes around 4,000mg of sodium per day. That’s bad news, considering the recommended daily amount is almost half that. According to the American Medical Association, cutting the amount of salt companies now use by half could save 150,000 lives each year.

So will the FDA take action? If change happens, it’ll come slowly. That’s because sodium is entrenched in our food system, to the extent that we’re not even aware of its presence. Just reading the amounts found in most processed foods like frozen meals is enough to make you thirsty. Even seemingly healthy items like Caesar salads can hold as much as 1,500mg. Please pass the water.

Clorox Co. just received approval from federal regulators to close on its acquisition of Burt’s Bees, the personal products company that makes lip balm, soaps and other skin products. The $925 million deal approved by the Federal Trade Commission took many in the industry by surprise when it was announced last month, since Burt’s Bees always exhibited a strong independent streak — certainly not a hive player.

But it was no more a surprise than Kellogg’s quiet announcement earlier this month that it had snapped up both Bear Naked, the natural/organic granola company; and California-based Wholesome & Hearty Foods Co., which markets vegetarian foods under the Gardenburger brand. This deal, worth a combined $122 million, only came to light when Kellogg’s filed its quarterly 10-Q report with the Securities and Exchange Commission.

It seems the the whole health business is poised for more surprises in 2008. The question is: Will large corporations come out from behind the curtain and start providing the transparency health and wellness consumers have come to expect from the companies making their food?