How Supermarkets Make So Much Money From Unhealthy Food

How Supermarkets Make So Much Money From Unhealthy Food

Many people eat badly because far too much of their energy is provided by nutritionally worthless junk foods and drinks. Part of the problem is the push by the food industry to get us to buy food that may be bad for us but good for its business.

Picture: Rowan Peter

In the 1960s, we had between 600 and 800 foods to choose from, many of them only available at the right season. But that was before supermarkets became widespread.

Now, the typical supermarket stocks about 30,000 items with whole aisles devoted to sweetened drinks, confectionery, savoury snack foods, biscuits, cakes and pastries, sugary breakfast cereals and substitute bars, and drinks full of added sugar.

Any one of these foods may contribute only a small percentage of total kilojoules, but there are so many of them that together they contribute 35% of adults’ kilojoules (41% for children), as well as 41% of saturated fat (47% for children) and 47% of consumed sugar (54% for children).

Of course, we must take responsibility for what we choose, but when sugary, salty, fatty items dominate what is offered in supermarkets, school and work canteens, sporting venues, service stations, motel dining rooms, clubs and even hospitals, they become the easy choices.

The food industry also uses advertising and promotions to “normalise” the consumption of highly-processed foods and drinks, and its lobbying power to resist regulation.

The Australian food, drink and manufacturing industry is worth $111 billion with the big end of town represented by the Australian Food and Grocery Council (AFGC).

This powerful lobby group is representative of just 120 food companies out of more than 2,000, but well over 80% of the dollar value of food sold in Australia. The majority of its members are large companies manufacturing highly-processed foods and drinks.

How Supermarkets Make So Much Money From Unhealthy Food

No one quibbles with the fact that companies are in business to make a profit. But sadly the profitability of many food companies comes from a type of “value adding” that could more accurately be dubbed “value padding”.

Sugar, refined starches and fat are cheap additives used to dilute more nutritious ingredients. Many fruit drinks, for instance, contain just 25% fruit juice with added sugar and water to replace the fruit juice.

This kind of fruit drink is cheaper to buy than 100% juice but not as cheap as you might expect from a product that’s only one quarter juice. The juice drink is therefore much more profitable for the manufacturer.

Breakfast cereals that are high in sugar should be cheaper because sugar is usually cheaper than the grain it replaces. But as the sugar content of breakfast cereals goes up, so does the price. And we’re getting an increasing range of sweet products.

How Supermarkets Make So Much Money From Unhealthy Food

Fish is not cheap but because fish fingers may contain just 51% fish — the rest being cheap “coating” — they can generate huge profits. The coated product may appear cheaper, but remember that you’re only getting half the fish, so you’re paying through the nose for the company’s profits.

Meat pies with more meat but less fat and salty gravy would be much more nutritious, but less profitable for the pie seller. Salty water is also pumped into deli meats and marinaded chicken portions and other meat products — making them less nutritious — but more profitable for the seller.

The more additives in your yoghurt, the cheaper the product is to produce — and the less nutritious for the consumer.

Foods with high levels of sugar, cheap fats, refined starches, salt and various additives to provide flavour and colour are profitable — and more palatable for most consumers. That’s because tastes like this encourage our survival mechanism to kick in and ensure we feast in case of future famine.

How Supermarkets Make So Much Money From Unhealthy Food

For highly or ultra-processed foods, profitability depends on devoting as much as possible of the price on packaging and marketing while keeping the costs of basic ingredients as low as possible. Indeed, it’s been estimated that 50% of the budget for many of these foods goes on packaging, 40% on marketing and 10% on ingredients.

Ultra-processed products have been described as:

characteristically formulated from ‘refined’ and ‘purified’ ingredients freed from the fibrous watery matrix of their original raw materials. They are formulated to be sensually appealing, hyper-palatable, and habit-forming, by the use of sophisticated mixtures of cosmetic and other additives, and state-of-the-art craft packaging and marketing. Further, ultra-processed products are ‘convenient’ — meaning ready-to-eat (or drink) or ready-to-heat.

Unsurprisingly, nutritionists and public health experts assert there’s no such thing as a healthy ultra-processed product — and this is the crux of the problem: such products may be good for big food business but they’re terrible for health.

How Supermarkets Make So Much Money From Unhealthy Food

Ultra-processed foods are widely available in convenience stores, vending machines, service stations and sporting venues. They’re designed for consumption while we are out at work or play or driving or being entertained — and we’re encouraged to see them as an integral part of life. Some are even fortified with micronutrients to give them a false halo of goodness.

Sugar, added starches, saturated fat and salt are cheap so the more you can add, the more budget left for the task of persuading customers, including children, to choose your product. This has not changed over the last decade.

Marketing costs are tax deductible in Australia, so, in effect, we subsidise the marketing of junk foods and drinks — and it works.

Basic foods, such as fruits and vegetables, which have no packaging or value padding, have only a small or no budget for promotion. And their consumption is correspondingly low (and falling).

How Supermarkets Make So Much Money From Unhealthy Food

Meanwhile foods padded with worthless ingredients are dominating the diet, increasing the costs of meals and making us sick.The ConversationRosemary Stanton is Nutritionist & Visiting Fellow at UNSW Australia. Christina Pollard is Research Fellow, School of Public Health at Curtin University. Christina Pollard is the Principal Investigator on Curtin University’s Healthway funded Food Law, Policy and Communications to Protect Public Health. Curtin University has received 5 years of funding to assist the translation of research into practice through the FLPC project. She works part-time for the Department of Health in Western Australia as a Nutrition Policy Advisor for the Chronic Disease Prevention Directorate. She has co-written this article as an academic and not as a public servant and not representing the views of the Department. osemary Stanton does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

This article was originally published on The Conversation. Read the original article.


  • Part of the problem is the push by the food industry to get us to buy food that may be bad for us but good for its business.I’d say that is a bit more than part of the problem..?
    There has been an excellent series on either ABC or SBS… can’t remember which now, on the men who made us fat, the men who made us thin, etc… They tell it all… The processed food industry is on a par with the cigarette companies twenty years ago, and they need to change their practices or get sued into the dirt..!

    • They were both on the ABC! They also showed The Men Who Made Us Spend, I’ve been watching it on iView.

  • It’s not just the big majors but the entire food and nutritional industry that’s in on the scam. After using myself as a guinea pig on different diets, including monitoring effects on my blood chemistry and fitness, no-one in the universe can convince me that “miracle foods” like red wine or (extra virgin) olive oil are not considered outright toxins by my body. I can have as much butter/animal fat as I want, but the day I have plant oils, my weight, heart rate and blood pressure goes up, and I need to exercise and eat just very carefully for a couple of days to revert back to normal.

    • Depends who you ask: You ask a nutritionist, you can’t get enough of category A, while B will probably kill you, and stay away from C too.
      You ask some newborn hippie, have some of all, but not too much, else you will die.
      You ask the companies: Have only whatever they are selling, and plenty of that, stay away from the rest.
      I am not saying they are all wrong, but they are not right either: Enjoy food, but don’t be a glutton. There is nothing wrong with eating unhealthy every now and then – hell i LOVE a good burger, yes, even maccas – live a little. But don’t do it every day, else you won’t live for long.
      Moderation is the key to all that.
      Soft drinks are a prime example. I have a friend who never had a coke or sprite in her entire life. And she is 32. no specific reason why.
      To some extent I admire her for this resilience towards the soft drink industry, but at the same time I feel sorry for her for not living a little and enjoying a sweet soft drink every now and then.
      But each to their own.

  • Where are these prices quoted from?
    Fresh Apples at my local Coles and Woolworths are $6/kg. Fish Fingers are $9/kg. I have NEVER seen Fish Fingers for $16/kg in my life.
    Don’t get me wrong – 3/4 of my shopping is staples that we turn into other foods. We don’t buy soft drinks and rarely buy chips – I applaud the article for its message.
    I am also really worried about ingredients that come from China. Our food labelling laws don’t protect us by making it mandatory to identify where food comes from. Here’s one of many articles on why food from China should be avoided at all costs. You’ll find it’s happened a few times. I’d rather eat trans fats than melamine any day of the week. Melamine kills you much much quicker – your body can’t expel melamine.

    • Our food labelling laws don’t protect us by making it mandatory to identify where food comes from.

      I have no idea about other products in other areas of a supermarket, but in the fruit and veg section they’re actually required to have the origin clearly labelled otherwise they will be slapped with a fine. Though, don’t ask me on how often this is enforced.

  • I’ve always found the food industry, it’s marketing, and the “tricks” used fascinating. Check out the following books if you found this article interesting

    – Salt Sugar Fat
    – Fast Food Nation

    – Fast Food Nation
    – Food Inc
    – Food Inc 2

    There’s loads more out there. I eat reasonably paleo myself, but only because I notice an internal difference in feeling as a result.

  • One other thing to watch for is “healthy” foods that are really just… not. The article mentions watering-down of fruit juice while adding sugar, for example, but fruit juice is, nutritionally speaking, not far from sugared soft drinks.

    Basically, if a Coke is fizzy sugar water with impurities, most fruit juices are regular sugar water with impurities. The impurities are slightly better for you, it’s true, but most of the “nutrition” in fruit juice is sugar. You are far, far better off eating a piece of fruit and drinking a glass of water.

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