Yes, this sounds cruel, but it really isn’t my idea. Leave it up to the managers at Frito-Lay to figure out how to save money, short-change consumers and (inadvertently) introduce a new way to fight U.S. obesity.

The Dallas News reported that Frito-Lay will hike prices and decrease the weight of their snack packages.

The culprit is well known - high prices for commodities such as corn, cooking oil and the fuel to deliver products to retailers.

After reading this story, it occurred to me that the U.S. recession may help cure the U.S. obesity problem if more companies follow Frito-Lay’s lead. By protecting the health of the bottom line, Frito-Lay may in fact decrease the size of the nation’s waist line.

The actual story here is how cheap food has become over the years. I’ve heard many noted authors including Marion Nestle and Michael Pollan comment on how cheap food has become in the United States. Perhaps this recession will reset more than all the defaulted subprime mortgages.

Earlier in the week Frito-Lay’s parent company Pepsico reported 4.7% growth in quarterly income and 13.4% growth in revenue. At least someone is working to stay fat.

-Patrick

Reuters reports that newly named Nestle CEO, Paul Bulcke, believes rapidly rising food prices will stabilize in the near future. He cites droughts, market speculation and booming interest in biofuels as global food variables that will change in favor of lower food prices. Bulcke also believes that food demand from emerging countries will not subside and continue to put pressure on global food supplies.

The Nutrition Capital Network II Spring Meeting in New York City has highlighted a number of prevailing trends in the nutrition industry’s financial landscape.

1. The financial markets are in crisis. Compared to NCN I in San Francisco last fall, there are fewer venture capital firms in attendance and more private equity and strategic buyers searching for start-ups with revenues of $3-5 million and positive cash flow. Investors are also very aware that any investment negotiation will likely be in their favor if drawn out and multiple down cycles can be capitalized on. Entrepreneurs, of course, are anxious to secure financing and improve their chances of surviving the down economy.

2. Strategic buyers with free cash are starting to look at deals. Because the debt markets have grown cold, strategic buyers have become the leading potential acquirers the industry. Entrepreneur valuations, however, have not yet in alignment with what the strategic buyers are willing to pay. As the U.S. financial crisis continues down the path that it is on, entrepeneurs will reset their expectations and deals will continue to be done, but at lower valuations compared to prior years.

3. Prepare for a long downturn. In discussions with economists, investors, stock brokers and industry experts at NCN II, it is clear that the consistent stream of bad economic news will continue. Consumer credit and spending statistics coming out in the next few months will supplement the subprime mortgage crisis and push the U.S. economy deeper into recession. One long time stock broker compared this downturn to the recession of the 1970s, which effects lasted 8+ years.

Buckle down.

If you’d like to read more about the state of investment and finance in the nutrition industry, I urge you to read NBJ’s February 2008 Finance & Investment Issue.

Sally Squires, a Washington Post Health & Nutrition columnist, published an investigation of probiotics today.

It’s a relatively well balanced piece citing reputable sources…..what a rarity!

Sally discusses the growing widespread use of probiotics, their exact undetermined definition, unknown side effects, dosage uncertainty and clear health benefits. It’s a worthy read for anyone needing to be knowledgeable of what the popular press is publishing about the nutrition industry.

Science is slowly catching up to consumer interest in dietary supplements. Thousands of consumer health websites, forums and blogs detail the ability of dietary supplements to cure and treat chronic and fatal diseases, but only a handful of studies have been released thoroughly testing the efficacy of dietary supplements to treat these diseases.

Today the Journal of the American Medical Association published a story on the treatment of Crohn’s Disease with Omega-3 Fatty Acids.

In this study, 188 patients received omega-3 fatty acids and 186 were given placebo. The study conclusion found: “In these trials, treatment with omega-3 free fatty acids was not effective for the prevention of relapse in Crohn disease.”

Early estimates by NBJ indicate that the omega-3 fatty acid market grew 25-30% in 2007, down slightly from 2006 growth levels, but well within expected ranges of new incremental sales. In foods, omega-3 fatty acids are receiving interest from food manufacturers, but savvy consumers realize that efficacious doses are difficult to achieve through food fortification alone…unless you choose to eat a fishmeal tortilla. Tasty.