Big Food companies rush to rejig recipes

With their soft, mashed potato insides and crispy exteriors stamped in the shape of a happy face, McCain Foods’ frozen Smiles are marketed as a fun-to-eat children’s snack. They’re not supposed to explode. And yet, that’s what happened inside the Canadian food giant’s laboratory in Florenceville-Bristol, N.B., as researchers attempted to “reformulate” the Smile’s long list of unpronounceable ingredients, part of a company-wide strategy to make its packaged foods more natural and wholesome.

Tony Locke, McCain’s director of product development, says the trouble began while trying to ditch mono- and di-glycerides, emulsifiers that help retain moisture in some packaged foods. Emboldened by previous success with frozen pizza pockets, Locke’s team added a mixture of yeast, wheat gluten and flaxseed to the Smiles. “It was working very well in the lab,” says Locke, referring to what was the 40th attempt to rejig the recipe. “But then when we went to scale it up, we actually had these little Smiles going down the line in the plant and coming out of the fryer and exploding. They would literally come out of the oil and burst.”

And that, in the form of a combustible little potato snack, is the huge and complex challenge faced by food companies as consumers increasingly demand meals that are not only healthier, but more “natural” and therefore, it’s reasoned, better for you. With the public spooked by everything from processed foods (too much salt, too many additives) to hormone-raised beef, food producers are suddenly bending over backwards to portray themselves as purveyors of local, fresh ingredients, and their suppliers as earthy, family-run outfits, as opposed to giant factory farms. The phrases “all-natural,” “naturally raised” and “cage-free” are everywhere.

The latest big name to jump into the fray is Burger King. The fast-food giant recently promised to serve only “cage-free” pork and eggs at all of its 7,200 U.S. restaurants by 2017, marking the first time a big fast-food chain has made such a definitive pledge. McDonald’s, meanwhile, has said it will work with its pork suppliers to phase out restrictive gestation crates used to house sows while they raise their piglets. And Tim Hortons is facing calls to go completely cage-free from the Humane Society of the United States, which holds a small number of shares and is proposing a shareholder vote at the company’s annual meeting next week. The ethical treatment of animals is one argument driving the changes, but so too is the assertion that happier livestock translates into healthier food.

As for packaged foods, McCain is just one of several companies that’s now focused on simple, easy-to-understand ingredients. Others include General Mills, with its Pillsbury Simply line of cookies, and Häagen-Dazs’s Five ice cream (with just five ingredients).

But while the sudden shift in focus may seem like a welcome change, critics say it is as much about marketing as it is science. And it has left food producers faced with the prospect of spending billions to overhaul their operations, even though the new and improved approaches may, in reality, do little to improve the nutritional value of the food we eat. Everyone likes the idea of food that’s “natural” and ethical, but, it must be asked, are they willing to pay the price?

For many big food companies, the pressure to change their ways intensified earlier this year. In February, Chipotle Mexican Grill (once owned by McDonald’s) aired an animated ad during the Grammy Awards that became an Internet phenomenon, with some six million YouTube views. The spot depicted the evolution of factory farming over the years, starting with a farmer and his wife standing in a field with a pig and ending with hundreds of pigs being deposited by machines onto conveyor belts, where they were stuffed with pills, stamped into cubes and loaded into the back of trucks.

Then, in March, a long-simmering debate about “pink slime” (beef scraps ground into a slurry, treated with ammonia and used as hamburger filler) went from being a favourite whipping boy of celebrity chef Jamie Oliver to a mainstream public issue. By the end of the month, everyone from McDonald’s to Safeway said they would no longer buy beef made with the stuff, while one of the product’s major producers, Beef Products Inc., had to shut down several of its factories, and another ground beef processor, AFA Foods, filed for bankruptcy due to lack of demand.

It’s against this backdrop that Burger King, under pressure from the humane society and shifting consumer sentiment, made its decision to promise to use only cage-free eggs and pork in the U.S. within five years (there are no immediate plans to do the same in Canada). Other companies that have offered similar promises include McDonald’s, Wendy’s, Subway, Costco and food giant Unilever, which makes Hellman’s mayonnaise. “We’re going to continue to consume beef, pork, chicken, fish, but we want to feel better about the practices,” says Darren Tristano, the executive vice-president of Technomic, a food industry consulting firm in Chicago.

The idea that getting rid of cages is more “natural” comes as news to many producers. Florian Possberg, 61, has been raising hogs in Humboldt, Sask., near Saskatoon, since 1975. Possberg started out raising sows in communal pens and then eventually switched to the more restrictive gestation crates in the 1980s. Research at the time suggested it was better for the animals and consumers, decreasing the risk of disease and injury. “Sows are pretty aggressive when they live in groups,” says Possberg, a director of the Canadian Pork Council. He adds that roughly half of the 5,400 sows on his farms are housed in gestation crates, while the rest are in groups, estimating that it would cost more than $1 million to switch over the rest of the operation.

It’s a similar story with egg farmers, who, several decades ago, moved to caged systems because it was viewed as cleaner and helped prevent the birds from attacking and eating each other. But animal welfare groups claim the use of small “battery” cages that each house several laying hens are too cramped, preventing the birds from engaging in natural behaviours such as scratching, nesting or flapping their wings. With pressure mounting south of the border, the United Egg Producers reached a deal last year with the U.S. humane society to promote the use of so-called “enriched” cages, which are bigger and offer extras like perches and nesting areas. The two groups are also calling for Congress to pass laws requiring new standards in a bid to avoid a costly patchwork of state regulations, and also to ensure individual operators who make the switch aren’t put at a “competitive disadvantage.” Translation: if everyone has to absorb the same costs, they can more easily be passed on to consumers via higher prices.

In Canada, both pork and egg producers are looking to the National Farm Animal Care Council for guidance. The seven-year-old group devises codes of practice for the industry with input from producers, scientists, government and animal welfare groups. It’s in the process of updating several of its codes, including those for hogs and poultry, although results aren’t expected for a few years. “It takes a long time,” says Jackie Wepruk, the council’s general manager, of the typically Canadian consensus-oriented approach. “But if you look south of the border, you’ll see the divisive way animal welfare is being tackled there. Most decisions are being made in a knee-jerk, reactionary sort of way.”

But Peter Clarke, chairman of the Egg Farmers of Canada, says the industry may have to move more quickly depending on what happens in the U.S. “The major food purchasers won’t accept significantly different practices on one side of the border or the other,” he says, adding the cost of such an industry-wide switch would be significant.

Whether it’s instant noodles or the oft-mocked Twinkie, most products that come in a bag or a box have historically been marketed based on their convenience, not provenance, and come loaded with artificial colours, flavours and other additives—all designed to maintain taste while boosting shelf life.

At McCain, the decision to reformulate its entire lineup of products (more than 80 since 2010) to include only “real” or natural ingredients represented the biggest-ever undertaking for the company’s research and development team, according to Locke. The move was based on extensive customer research that suggested consumers were growing wary of additives that were synthetic-sounding. Nor was the challenge strictly limited to McCain’s own operations. “We might buy a seasoning mix from a primary supplier, but of course they’re getting all of the components to assemble the mix from another group of suppliers,” Locke says. “So it was a complicated effort.”

All of the tinkering has translated into big business for another sector of the food industry: flavour companies. Though many consumers don’t realize it, many ingredients now viewed as undesirable—salt, sugar and other additives—do a lot of heavy lifting when it comes to taste. Once they’re taken out, new flavours must be added to maintain a product’s appeal. And not just any flavouring solution will do. Bob Eilerman, the head of science and technology at Switzerland’s Givaudan, one of the biggest flavour and fragrance companies in the world, estimates that more than 50 per cent of Givaudan’s customers now want “natural” flavourings, as opposed to artificial ones, even though there’s not much difference (other than cost). “Natural has good connotations behind it,” says Eilerman. “But at the end of the day, it’s all about chemicals. Whether it’s a strawberry flavour that came from crushed strawberries or from one of our laboratories, the chemical composition that we’re trying to create is very similar.”

It raises the question of whether the current fixation on natural and ethical is ultimately worth the price. McCain seems to think so. Calla Farn, a company spokesperson, says sales of some reformulated McCain products have enjoyed gains of up to 10 per cent. As for the cost, Farn admits that the new-and-improved products are more expensive to make, but says the company “worked hard to identify savings in other areas to ensure our products remained cost-neutral.”

Not all companies may be so lucky. In the case of cage-free eggs, Tristano estimates that the cost will go up by 25 cents to 40 cents per dozen, which threatens to squeeze the margins on a simple breakfast sandwich. That’s because fast-food operators typically have a much tougher time passing on rising commodity prices than do grocery stores because of intense competition. “It’s about three cents an egg on a product that sells for $2 or $3, so it doesn’t seem like a lot,” he says. “But when you can only increase prices by about two per cent and you’re getting hit by a per cent and a half just to have cage-free, that’s a big deal.”

Ultimately, a bigger risk to the industry may come from the public’s new heightened expectations from food companies. As they change the way food is made, there is every likelihood consumers will turn their attention to some other unappetizing aspect of the mass-production process. “Once you move forward, there’s no turning back,” warns Tristano. “And let’s be honest: if we really cared that much, we’d all be vegetarians.”