If you are a retailer struggling to differentiate yourself against a Wal-Mart (or some other price-based discounter) and know that although low prices are crucially important, you will not be able to continue to grow profitably if you continue to attempt to compete with these outlets primarily on a price basis, you're in luck. The retailer Good Fairy has just dropped out of the sky with a once-in-a-lifetime market-driven opportunity to help you find a niche that, to-date, few if any other retailers have yet acted upon.


And just what is this market-driven "once-in-a-lifetime" opportunity?


As the federal government labels it, it is the current US "Obesity Epidemic." If this problem is not arrested, current projections are that in five years (by 2008), almost three-fourths of our adult population will be overweight-defined as having a Body Mass Index of 25 or greater-while 39 percent will be outright obese (BMI of 30 or greater).


Equally alarming is the overweight situation relating to children. Currently, the CDC reports that 27 percent of children between the ages of 6 and 19 are overweight-an increase of 125 percent since 1976. Because children invariably mimic the lifestyles and eating habits of their parents, this issue among children shows no signs of abating either.


Overweight and obesity are now the leading contributors to premature, preventable deaths in the US. The National Alliance for Nutrition and Safety estimates that approximately 310,000 people die each year as a result of improper diet and/or lack of exercise. That's 20 percent more than die from tobacco, 250 percent more than die from alcohol and five times more than the number of people killed by guns, AIDS and drug use combined. According to David Satcher, the US Surgeon General in 2001 and the person who identified this problem as a "national epidemic," treating obesity-related health problems (high blood pressure, high cholesterol, Type-2 diabetes, heart attacks, etc.) cost Americans approximately $117 billion in 2001. The problem is so serious that the IRS recently classified obesity as a "disease," thereby allowing Americans to deduct the cost of treatment from their taxes.


The key thing to understand now is that there are strong societal and governmental forces who are no longer buying into the "common sense" premise that either what you eat or how much you exercise is a personal responsibility. The new premise is that to arrest and correct the American obesity situation will require a massive, prolonged and focused effort requiring the cooperation of all key facets of society—federal, state and local governments, local school boards, food and beverage manufacturers, and the obvious linchpin in this—food and beverage retailers.


To give you an idea of what has happened with this issue since the government labeled it a national epidemic at the end of 2001 —and to lay the groundwork for why we think this is a unique and major opportunity for retailers —here's a brief recap:


The legal community has identified the American obesity issue as another "Big Tobacco" opportunity and has actually given it a label called "Big Food." Former anti-Big Tobacco lawyers like John Banzhaf III (who has a sign saying "Sue the Bastards" on his office door) have jumped into the fray with a multitude of class action lawsuits against various fast food companies and public declarations of "You will be sued!" against any member of the food community who they perceive to be part of the problem and not the solution.


Local school boards have busied themselves with promulgating policies regulating or even prohibiting the sale of soft drinks and other "junk foods" in school vending machines.


As of this writing, 41 state legislatures have proposed no fewer than 179 bills or resolutions dealing with the American obesity issue —a remarkable 149 percent increase over the number of similar bills introduced in these legislatures all of last year. Roughly one-third of these bills are directed at curtailing or even prohibiting the sale of soft drinks and certain snack foods in state schools. For example, the state of Texas has prohibited access to all carbonated soft drinks and certain candies and chewing gum in all Texas elementary schools.


Leading food and beverage manufacturers have also been quick to react and have declared their intention to become part of the solution by reformulating present brands and introducing new brands that will contribute to lower caloric and fat intake. In addition, most are presently in the process of funding programs that will ignite local community PE participation.


The federal government has thus far this year introduced three major obesity-related bills that would provide funding to states, counties and districts across a broad variety of initiatives targeted at promoting healthier lifestyles. While none of these bills has yet been passed, it is a safe bet that the enormity of this problem will eventually lead to a far-reaching, bipartisan act.


One result of all of this activity is the massive amount of publicity the subject of obesity has received & #x2014;publicity upon which retailers will be able to capitalize at no cost to them. Based on compilations provided by the International Food Information Council, the number of wire reports and print articles relating to obesity has literally catapulted from about 50 per quarter in 1999 to approximately 1300 per quarter in the April-June period, 2003. This is an increase of 2500 percent that does not include national or local TV stories on the subject, which are now occurring on an almost daily basis. Moreover, as one can see from the table below, there is little doubt that this publicity will continue to escalate:


So if you are a supermarket or a convenience store —or a food and beverage retailer of any nature —what's the opportunity for you to capitalize on this issue in positive ways and how does one go about this?


Certainly, we believe that food and beverage retailers —and particularly supermarkets —are potential lightning rods in the nation's fight against obesity. With 100 percent household penetration and a weekly trip frequency that is currently five times greater than supercenters, supermarkets have the broadest exposure to US households far more frequently than any other channel. In addition, supermarkets have the biggest incentive to take the initiative on this subject because it offers such a magnificent, built-in and natural platform for true differentiation on a basis other than just price. To become known and established as a community leader in the fight against obesity may prove to be the saving strategy for any supermarket struggling to find itself in the current environment.


For starters, here are some tips on how to proceed:


• Restructure (some of) your charitable giving to address the obesity issue and merchandise this fact to local communities.

• Familiarize yourself with what local schools are doing to address this issue and either reinforce or supplement these initiatives with your own initiatives-e.g., on-site Saturday morning cooking or nutrition courses, as Home Depot does every week with DIY home improvement courses —or programmed athletic activities, etc.

• By all means, link things you may already be doing —like sponsoring a local ball club —to the obesity issue and let people know that you are doing this.

• Broaden your variety of healthy food products and adjust in-store signage to focus your customers' attention on these products.

• Make sure your private label products stay on top of the trends.

• Insert a declaration in every ad that identifies you as an anti-obesity advocate. Do not just assume that your customers know this.

• Encourage your suppliers to work with you on this subject. Provide them with specific guidance on the types of promotions you would like to run and the products you would like to feature.

• Lastly, don't feel you need to de-list items perceived by the ill-informed to be at the heart of the American obesity problem, e.g., soft drinks, salty snacks or candy. After all, many of these items have been around for over 100 years and it is only in the last 30 years that obesity has become a national issue. ba

Chris Hoyt is President of Hoyt & Company LLC, an Arizona-based consulting and executive development firm, and can be reached at 480/513-0547 or on the Web at www.hoytnet.com.