It’s not new, but last month’s Credit Suisse report on sugar is both detailed and provocative. The sobering assessment is worth a second look – especially during this week’s binge festival of candy – Halloween. Sugar deadly for teens.
While the focus of the report is largely financial, there’s something for everyone – including healthcare professionals, researchers, politicians and really all of us as consumers. There are many highlights, but this one is a good summary of the sheer size and scope of excess sugar consumption on the U.S. healthcare system:
“So 30% – 40% of healthcare expenditures in the USA go to help address issues that are closely tied to the excess consumption of sugar.” Credit Suisse Report –
At this level, the math clearly lacks scientific precision, but it does emphasize the huge burden associated with a single and truly ubiquitous substance – sugar. Assuming a U.S. National Healthcare Expenditure of $3 trillion per year – and further assuming we simply take 33% (the lower end of the Credit Suisse range), the calculation is easy. Basically, the U.S. healthcare system spends about $1 trillion per year (and possibly more) fighting the effects of excess sugar consumption.
The report references a constellation of health effects around that excessive consumption – including coronary heart disease, type 2 diabetes and metabolic syndrome. Other known risks – mostly around being overweight and/or obese – include osteoarthritis, high blood pressure, high cholesterol, gout, non-alcoholic fatty liver disease and cancer. A broader summary list of findings in the 40 page report include these:
– The 2012 Global Burden of Disease report highlighted obesity as a more significant health crisis globally than hunger and/or malnourishment.
– More than half a billion adults (over age 20) worldwide are obese.
– The world average daily intake of sugar and high-fructose corn syrup (HFCS) is now 70 grams (17 teaspoons).
– A scientific statement issued by the American Heart Association in 2009 recommends that women take no more than six teaspoons of added sugar a day and men no more than nine.
– A single, 12 ounce can of regular soda has about 8 teaspoons of sugar.
There’s a bonanza of charts and graphs too, but perhaps the single most compelling one is this one for global soda consumption:
According to the study, sugar itself accounts for over 80% of the global sweetener market. With a single commodity of this size, it’s no surprise that the lobbying power of the sugar industry is often compared to another global commodity – oil. “There are 15 million cane growers in China and 350,000 beet growers in Europe.” Another metric is the sheer volume of sugar (all its forms) in the typical U.S. daily diet – 38% – and Credit Suisse estimates that 43% of that is from a single product category – sweetened beverages.
While the toxic health effects of sugar are generally well known, there is mounting evidence to suggest that sugar has addictive properties as well.
“Sugar may not pose the clear addictive characteristics of illicit drugs such as cocaine and heroin, but to us it does meet the criteria for being a potentially addictive substance.” Credit Suisse
As a sub-category of sweetened beverages, the “energy” drink market delivers a compounding effect with another central nervous system stimulant – caffeine. The combination of sugar and caffeine (often served in small sizes to belie their potency) is in many ways a perfectly legal, over-the-counter, high calorie cocktail. Like any rebellious product, it’s targeted directly at the younger – mostly teenage demographic.
The story behind Monster’s high octane success was highlighted last month in a provocative piece by Simons Chase where he compared beverage “innovations” to financial “innovations” like derivatives.
“Food undergoes the equivalent of a leveraged recapitalization designed to suit the financial goals of its creator. Consumption of junk food (for example a Twinkie or a sugary drink) is akin to a financial exchange where short-term gains are privatized and long-term costs are socialized in the form of horrific health outcomes. The metabolic donkeys – consumers – pay relatively little money and turn a blind eye to the health consequences of their food choices – instead hoisting the fantastic profits of companies like Monster and opting for a shortened, diseased life.”Simons Chase – 2 Perspectives On Food Innovation: Sodastream vs. Monster Beverage MNST +1.09% (here)
Just how big are the profits we’re delivering as metabolic donkeys? Here’s a chart comparing some key metrics of Monster’s phenomenal success to another innovation juggernaut – Apple AAPL +1.64%:
Chase goes even further.
The truth is that Monster produces nothing – literally. All of its beverage production is outsourced to third-party co-packers and suppliers. In fact, Monster even claims not to own the formulas used in the production of its beverages. According to company filings, Monster says, “we do not have possession of the list of flavor ingredients or flavor formulas used in the production of our products.” It’s core value appears to be a vast collection of trademarks (3,700 at last count) and an army of part-time marketing employees.
In a marketing sense – we’ve traded our chiseled-jaw Marlboro Man (in this image a tattooed, shotgun-loading hunter) with a green-eyed, animated vixen. Unfortunately, just like cigarettes, the consequences are often lethal. As reported by Today Health (here) – the official cause of death in the case of one 14-year Maryland teenager last year was “cardiac arrhythmia due to caffeine toxicity.” The girl did have a known heart ailment, but according to the U.S. National Library of Medicine (here) “most of the time, mitral valve prolapse is harmless and does not cause symptoms.” The day before her death she had consumed two 24 ounce cans of Monster’s Energy drink.
A 2011 report (here) by the Drug Abuse and Warning Network (published bySAMHSA) suggests a non-trivial spike in ED visits tied to energy drink consumption.
If “patient engagement is the blockbuster drug of the century” (a phrase coined by Leonard Kish here), we may need a new accountability for companies that simply engage us as ”metabolic donkeys” for windfall profits. Unlike cigarettes, there are relatively easy ways to ”innovate” around food and beverage products that deliver more health and less disease. Before we demand healthier food and beverage choices from consumers (and penalize behavior that is less so), we need healthier (and more affordable) options to replace ones that simply promote “a shortened diseased life.” The financial mechanics of how those are likely to arrive on a global scale is another reason to read the Credit Suisse report.