'Let's Move' Spurs Mixed Reactions - Analyst Blog
January 26 2012 - 12:08PM
Zacks
First Lady Michele Obama’s keep fit campaign ‘Let's Move,’ which
has been launched nearly two years back for protecting children
against obesity, is causing worry for some food giants. The
campaign suggests the inclusion of more vegetables and fruits and
less of meat and fats in US school meals. The processed meat
producers are among the worried lot, as this definitely means
lesser consumption of their products.
Obesity among children has spread like an epidemic. Nearly 57%
of New Yorkers are overweight or obese, and about 10% of the obese
children have been told they have Type 2 diabetes. The health
officials report that many obese children are under treatment in
the city hospitals and need knee replacements, among other
things.
The ‘Let's Move’ campaign has changed the way the Americans eat.
Mrs. Obama has addressed governors, mayors, school groups, food
makers and other constituencies, urging them to promote a healthy
and obesity free lifestyle for the future of America.
She visited schools across the country to encourage students to
plant vegetables and fruits in their own school gardens and also
open salad bars in their lunchtimes. She has been working hard at
exercise clinics with kids, including those on the White House
South Lawn.
Her first major victory since the launch of the movement came
when U.S. Department of Agriculture (USDA) passed a rule which
calls for a major overhaul of the menus in school kids’ lunchboxes.
It set a platter of new federal standards for the lunch
program, which feeds roughly 31 million children each school
day.
The updated school lunch standards are expected to spell
the end of "mystery meat" served in the schools, and instead fill
plates with offerings such as whole wheat pasta, fresh
cantaloupe, grilled chicken and chef salads.
Moreover, Friday's menu, cheese pizza with tater tots and
canned fruit will be replaced by whole wheat crust, baked sweet
potato fries. Pineapple in sugary fruit syrup would be replaced by
grape tomatoes, which will be served with low-fat ranch dip.
The new endeavors by the government to reduce obesity have,
however, caused food giants to worry. Processed meat producers like
Tyson Foods Inc. (TSN) and Sara Lee
Corp. (SLE) are not happy with the new regulation.
The National Cattlemen’s Beef Association feels that meat is an
important part of diet as it provides protein, they also point that
the variety of beef options available allows schools to incorporate
lean beef into their menu plans on any budget.
The government, however, feels that dropping meat at breakfast
won’t impair nutrition because children get plenty of protein from
whole grains, and breakfast meats are often processed and
fatty.
However, the campaign has been a blessing for some food giants
in America. For example, this development marked a victory for
ConAgra Foods Inc. (CAG), maker of Hunt’s tomato
products and Schwan Food Co., which holds 70% of the market for
pizza in the $9.5 billion school food-service industry.
The campaigns seem to be forcing the retailers reconsider
things, as most recently Walmart Stores Inc.
(WMT), the country's largest retailer, promised to cut the levels
of salt, fat and sugar in their products. It also pledged to bring
down the prices of fresh fruit and vegetables so that they are
easily available to people who strive for healthy eating habits.
ConAgra Foods lobbied to block its limits on potatoes and tomato
paste in pizza.
Currently we hold a Zacks #3 Rank for Tyson, Sara Lee and
Walmart, implying a short term hold rating. For ConAgra we hold a
Zacks #2 Rank, implying a short-term Buy rating.
CONAGRA FOODS (CAG): Free Stock Analysis Report
SARA LEE (SLE): Free Stock Analysis Report
TYSON FOODS A (TSN): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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