Obesity Drugs vs Behavior, Sodium Battle, $29 Hot Dog

Welcome to the Lempert Report LIVE. On today’s broadcast:

• A look at Obesity Drugs vs. Changing Behavior
• The USDA rescues Alaska's salmon
• Wendy's tests underground delivery
• The foodservice battle over sodium
• A $29 hot dog in New York City
• On the bullseye an update on Smell-a-vision

Hope you’ve had a chance to check out my multi-part food trends series on Forbes. 

Transcript

Phil: 0:04

Welcome to the Lempert Report Live. On today’s broadcast we look at obesity drugs vs. changing behavior, the USDA rescues Alaska's salmon, Wendy's tests underground delivery, the foodservice battle over sodium and a$29 hot dog in New York City On the bullseye an update on Smell-a-vision. I hope you’ll check out my latest Food Trends series on Forbes.com to get there just log on to SupermarketGuru.com. Let’s get started. So Sally, you just wrote a great article for RDBA weekly on the obesity drugs, what's going on? And, we are seeing a lot of activity from food companies that are trying to hopefully balance this situation where people are not spending a thousand bucks a month on an obesity drug and changing behavior. What's going on here?

Sally: 1:09

Well, Phil, as we've talked about the popularity of these weight loss drugs, Ozempic and Wegovy specifically, these are semaglutide which are typically used to, to treat type two diabetics. Wegovy being one that a 2021 was approved for chronic weight loss. But now, a lot of people have figured out that using this drug can help them drop pounds very quickly. And it's not surprising that people would want to want to get this prescription, especially when we have an obesity crisis that is affecting so many Americans right now. It does cost an average of$820 a month, and typically your insurance will not cover this. So that is an issue for it being inaccessible to the average American. So the conversation has come up, are these obesity drugs really fixing long-term problems while they can be potentially beneficial to people that are in urgent situations of obesity? Are we looking at the long-term solutions, which is creating better eating habits? I recently read an article by a great writer, Hank Cardello who writes for Forbes, and he proposed this idea that companies like PepsiCo are stealthily changing their ingredients. He calls it stealth health, which I think is a great way of describing it. What's happening is that they are making changes. They're lowering sugar, they're lowering fat, they're lowering sodium. Some food companies are even fortifying their foods and adding some nutrients that we really need to help with those products that we love to buy, but haven't been traditionally so good for us. But the thing is, is that they're not actually publicizing this to consumers, which their hope is that as they gradually lower these ingredients that we don't want, that their consumers that are loyal to their brand and their products won't really notice the differences and they'll be eating a little bit better gradually and conditioning their pallets in a positive way without feeling turned off by something labeled as low sugar or low sodium.

Phil: 3:31

Yeah, I think that the messaging is critical, and we're gonna talk a little later about sodium later, but again, we go back to the Campbell Soup example, when they declared that they were lowering sodium in their soups, everybody was in an uproar and didn't like it. So they had to put the sodium back in. So I think that what Pepsi's doing and what other companies are doing this stealth nutrition, if you would, I think is really smart. If we look at these weight loss drugs, it's projected that it's gonna grow to 13 billion a year by the end of this decade, which is unbelievable. And also, another good reason not to be doing this is besides the points that you make, but number one, when you stop taking these drugs, you put all the weight back on. And also one of the big proponents of this is Elon Musk. So for no other reason, don't do it because Elon Musk wants you to do it and he's doing it. So let's not do that. USDA is saving Alaska salmon. What they've done is they've invested$70 million and bought Alaska Sockeye for different food assistance programs around the country. And I think that this is terrific, not only for Alaska. I love Alaska seafood. I love the Alaska seafood marketing board. But what it also does for these participants in food assistance programs, it's giving them healthier food.

Sally: 5:17

Yes, I agree, Phil, this is a wonderful thing to do to support the fishermen in Alaska or fisherwomen as well. But also a 2021 study was published on the National Library of Medicine and it estimated that 90% of US citizens do not meet the recommendation for seafood consumption. Now, the reason we want to eat seafood if we're not vegan, is we wanna get that omega-3 fed fatty acid. Our bodies cannot produce that without us getting it from food or some other form. And so we wanna get those nutrients because they're really good for our heart and our brain.

Phil: 5:56

Absolutely. And I love this program. The only thing that I don't like about it is the federal process of buying and distributing food is cumbersome. It took eight months, eight months for USDA to agree to make this purchase of Alaska salmon. And that's just way too long. But the good news is that it's going to food assistance program, better health, better nutrition, and as we talk about better health and nutrition. Here's technology that I just don't get, and Sally, maybe you can help me figure this one out. But Wendy's is piloting underground robots to deliver food to cars. It happens in seconds. They're partnering with PipeDream and what I don't really understand, and I don't think that this is that complicated or that much faster than a drive-through, you still have to pull up to Wendy's. They have these automated things that look like they're in a bank teller that bring your food up to your car and you have to order on your phone to get delivered. Is that gonna be that much faster? I don't get it.

Sally: 7:19

Well, I'm not sure how this is saving these companies money. I don't have numbers on that to compare that to to what it costs to have humans deliver food to these cars, like in the way that Sonic does. How we have someone bring the food out to our car, which I think is wonderful. But what we do know is there have been studies, in fact, there was one published in 2022 just last year by Big Red Rooster that said that 75% of customers still believe interaction with a human is a critical component of going to a restaurant. So I wonder if people will want to get their food that way. What if you get it and you know there's a problem or you need something else, do you have to pick up your phone and type that back into your app? And that that seems kind of cumbersome rather than just asking someone, can I have some ketchup, please?

Phil: 8:12

Yeah. I forgot the name of the restaurant, but there was a restaurant, I want to say about 10 years ago that was started in Southern California. I actually went to visit it, we did a story on it, it's somewhere in our archives, that basically the restaurant was above ground. People parked underneath the restaurant and they ordered not with their cell phones at that point, but with a little box and it was delivered down to the cars. They went bankrupt in probably about a year. So I don't think that this is a solution and it's not necessary. It really isn't necessary. The drive-through, sure, there might be two cars in front of you, but it's very efficient. And what we're seeing with a lot of McDonald's and Dunkin Donuts is they're now building where there's two or three drive-throughs at the same time so that you can get your order. But this to me sounds like technology looking for a solution for a problem that doesn't exist. Sodiim. Sodium sodium sodium. About 55% of our food budgets are spent on foods that are prepared and consumed away from home. And what we find in a survey of over 6,000 adults, while 52% of respondents prefer low sodium, low salt menu selections when dining out, only 6% of us or them actually ask for them. Customers choose a restaurant most often for the deliciousness of the cuisine according to the survey, and only 29% select a restaurant for its healthfulness. This is a study that was just published in the Journal Advances in Nutrition that really talks about the fact that, bottom line is, food service operators are at a standstill. They know that consumers want lower sodium but they're struggling to create tasty foods that have lower sodium. We talked about the Campbell's example before, and, what are we gonna do to get people to have less sodium?

Sally: 10:32

Yes, it is a challenge for creators of these foods and these chefs to come up with. Ingredients that taste as good as those high sodium ones, and it's also a matter of availability of those ingredients. But, as we reported last week here on the show, we heard from the USDA from one of their reports that we are still getting too much sodium as Americans, and we're getting it mostly from eating out of our homes at restaurants. But I did see something really interesting in the news last week, Phil, about MSG, which has been considered for a long time, something that we wanna stay away from. However, that myth as this article is saying, is being debunked by a lot of popular chefs right now. There are some chefs in New York that create Asian dishes and they are using MSG, they're using this glutamate to bring that flavor. If we don't remember glutamate is the original umami flavor. And so that is one way that we can start bringing some of that balancing some of that sodium flavor.

Phil: 11:45

Yeah. And there's a lot of controversy over MSG but most of it has not been scientifically proven. So it's really one of those ingredients that we really need to re-look at. Talking about re-looking, a couple weeks ago we reported about Zabars E. A.T restaurant that was selling a ham and cheese sandwich for$29. And there was a whole controversy about it. New York Post did a story on it. Now what we're seeing is a new restaurant called Mischa's in Midtown Manhattan serving a$29 hotdog.$29 and it comes on a potato bun with chili and condiments. I happen to still love Pink's hotdogs in Los Angeles and Gray's, Papaya hotdogs in New York, even Sabrett on the street corners where you're buying a hotdog for a buck. I don't think that I would spend$29 for a hotdog.

Sally: 12:56

Yes, I agree, Phil, and I'm really glad that you brought up Pink's because I was looking at Pink's website today and they are probably the most famous hotdog stand in the country located in the West Hollywood area. And so I was looking at their menu, just curious to see what their chili dog goes for, and I was so surprised to see that their chili dog is only$5.95. And I was surprised because I just was out in LA and I noticed t hat a lot of the food prices had really, really gone up. But Pink's seems to somehow, k eep their prices down and that's a big difference from a$29 hotdog.

Phil: 13:35

Absolutely. And you're probably gonna cringe at this, but when I was growing up in New Jersey, we had a restaurant, I wouldn't even call it a restaurant, a hotdog stand called Ruts Hut. And it was a hut. And what they basically did is they cooked the hotdogs by deep frying them. So you would get a hotdog, they deep fried it, they put it on a bun. It was actually very crispy, as you can imagine, by being deep fried. And sometimes you would bite into it and it would actually squirt your mouth because there was so much fat in that hotdog. And I think those days it was probably, again, about a buck. So this idea of a$29 hotdog, and I don't care whether you're a midtown Manhattan, you're in Paris, I don't care what city you're in, whether it's$29 for a ham and cheese sandwich, or$29 for a hotdog, or$29 for a burger, it just doesn't make sense. We just don't need to have that kind of debauchery, if you would, as it relates to simple, basic foods. And I think that all these companies are doing it to get PR to have folks like us talking about it and putting them on the map for me, it just doesn't work. Thanks, Sally. Appreciate it. Grocery store and mass channel visits were down year-over-year in Q1 2023, but it’s important to view this in context. In a recent webinar for CMA| SIMA members, Placer.Ai explained how shopping trip durations increased during the pandemic– and this trend continues today. Check out this clip for more, and members can view the entire webinar in our Resource Library. Take a look.

Placer.AI: 15:41

So we're thinking about segments like grocery and superstores that were really at the, kind of the top of the mountain when we looked at retail even just a year ago in terms of where they were compared to where they had been pre pandemic, where they had been the year prior. Yeah. And when, when we see declines in these spaces, there's this initial tendency to say, oh, that success has now dried up. And I think the reality is it's, it's not true, even though it looks true surface level. And I think a big part of that is what we've already discussed in these segments, specifically the visit duration has gone up really significantly. So yes, fewer visits, but more significant visits. I also think the strength is, is necessary to, to consider when we know that those were the segments that had been the most adaptable throughout other periods. These are, these are kind of essential categories. They're necessities, they're staples, they're things we absolutely require. And these are retailers that are really well positioned to maximize even fewer visits. So these, and another piece is what we saw in terms of the difference between, group size, especially in q1. So we're thinking about April. This is less of a consideration, but when you think about January for example, we know that when there were rises in Covid and 2022, especially the earliest start of the year was kind of the peak of that omicron run. Yeah. Group sizes increase, people are going to less things, so when they go out, they're going out together to the supermarket. Right? We another, again, kind of pandemic trend that we saw in, in certain periods. Okay. Yeah. So that all has an influence, and I think when we really think about it, groceries, superstores, and some other segments, they've actually shown not just tremendous resilience and success, but also the ability to ebb and flow alongside the consumer. So when the consumer wants to make its their normal amount of visits and have them be a little bit shorter, great. When the consumer needs to shift that pattern, they're still really well positioned for that environment. And it speaks to, I think, the, the strength and the gains that these segments have made since the onset of the pandemic

Phil: 17:46

On today’s Bullseye– if you were a kid in the 50s and 60s- the way I was- you'll probably remember all the hype over what was being called the next generation of moviegoing. First there was AromaRama then came Smell-O-Vision followed by Odorama and Aroma-Scope. AromaRama and Smell-O-Vision used, what was for the time, cutting edge technology that would release particular aromas during the course of a movie that would add another layer of excitement to the experience. Neither really worked that well as the machinery was noisy and made a hissing noise when the aroma was released. In some cases there were tubes that ran under the seats to distribute the aroma and in other cases there were single machines that were placed at the back of the theater and the aromas weren't evenly spread throughout the theater. So depending on where you sat you might be overwhelmed with the fragrance of, for example, warm bread coming out of the oven, or not get even a whiff. Then in 1981 director John Waters released his cult film Polyester and audience members were given scratch and sniff cards- each card had numbers 1 through 8 and when the number showed up on screen you then scratched that number to release that aroma.There were others who tried the same technique as Waters used for some kids TV shows, in the mid 1980s MTV tried it with their movie Scent of Mystery, then again in 2003 with the movie Rugrats Go Wild and then in one installment of the Spy Kids movie. We just keep trying to solve the problem and stimulate all 5 senses. Disneyland's It's Tough to Be a Bug movie releases a stinky odor coinciding with a stink bug when it appears on screen. Other Disney attractions release pie scents, orange blossom scent, pine forest scent, sea air fragrances, grass scent and cherry blossom scents. If you waited long enough on line to take the Monsters, Inc Mike& Sully to the Rescue ride you are treated to a ginger scented sushi house. The list goes on and on for those who have tried to add aromas to enhance our movie going experience. And now fast forward to AromaPlayer- a neck worn dispenser that releases scents that match the mood of the video that is being played. The Japanese tech startup Aromajoin says that the palm sized device can switch scents instantly without any residual aroma. Just download the AromaPlayer app on Google Chrome. You start with a YouTube link then you can add the aroma you wish on the video's time line to set up what they say is the perfect smell, timing and duration. The AromaShooter is available to both consumers and web developers and has hundreds of different scents available-the device has a holder for the different scents cartridges. It's similar to the ink cartridges for your computer printer. The Aroma Shooter first suctions ambient air, then the air passes through the sent particles released from the cartridge and then sends the scent directly to the users nose. Maybe this iteration will finally take hold? Or are we doomed to spend the next 50 years with people still trying to get their noses involved in every digital experience? For me, in a movie theater, I still like the aroma of freshly buttered popped popcorn. The Lempert Report is all about inspiring ideas, making our industry think and challenging each other. Let’s think about“being the shopper” and how we can bring our supermarkets and restaurants closer to meet their needs. I hope you’ll come back to join us on next week’s installment of The Lempert report LIVE when we focus on the biggest and best insights– and the things that really matter. Be sure to visit SupermarketGuru.com for the latest marketing analysis, issues and trends and don’t forget to join us back here next Monday at 2:30pm Eastern for more.