Bloomberg News

Waistline Index Grows as Emerging Markets Eat Fast Food

April 04, 2013

Waistline Index Grows as Emerging Markets Eat Fast Food

Eating less home cooking, and consuming more processed snacks and sugary drinks, the average man is gaining weight in Mexico, Brazil and Chile faster than the worldwide average, according to the Waistline Index compiled by Bloomberg. Photographer: Matt Cardy/Getty Images

Fast food and expanding waistlines are not just an American health concern.

Even as McDonald’s Corp. (MCD), Yum! Brands Inc (YUM). and Domino’s Pizza Inc. (DPZ:US) work to placate anti-obesity advocates at home, they’re taking high-calorie offerings to other parts of the globe and hooking a new generation in emerging markets. Their target customers, often part of a rising middle class with a more sedentary lifestyle, are in turn putting on the pounds.

Eating less home cooking, and consuming more processed snacks and sugary drinks, the average man is gaining weight in Mexico, Brazil and Chile faster than the worldwide average, according to the Waistline Index compiled by Bloomberg. The women are too, except in Brazil, where they are holding to the global average. In all three countries, fast food is a relatively new option.

The foreign influx is in some ways similar to the one 300 years ago, when the conquistadors brought smallpox and measles to native civilizations in Central and South America, said Tim Lobstein, director of policy and programs at the International Association for the Study of Obesity in London.

“The parallel now is the big transnational corporations also setting foot in these remote areas and bringing non-communicable diseases,” such as obesity, diabetes and heart disease, Lobstein said in an interview.

Increases in these diseases, the rising cost of medical care and worries about childhood obesity may force the food companies to change some practices abroad and push them into new markets to achieve their desired growth. Already, legislators in Brazil are considering restrictions on marketing by fast-food companies.

Weight Gains

Men in Mexico gained an average of more than 15 pounds (6.8 kilograms) from the opening of the first U.S. fast-food outlet in 1985 through 2010, while the nation’s women added more than 19 pounds, according to the research conducted by Bloomberg. In Chile, men have gained 14 pounds on average since the first American chain opened in 1989, while women’s weight has increased 18 pounds.

Those figures top the global average. Around the world, men gained about 11 pounds in the 30 years through 2010 and women about 10 pounds, according to the data.

Health problems related to changes in diet and lifestyle have been well documented. Death rates in Brazil and Mexico from cardiovascular disease and diabetes surpassed those in the U.S. in 2008, the most recent data available from the World Health Organization. Chile trails those two with a death rate from the diseases close to that of the U.S.

Diabetes Rates

The diseases are also affecting Asian nations, though obesity rates are lower there. In China, where Yum has more than 5,200 locations, the rate of diabetes will surpass that of the U.S. by 2030, according to the International Diabetes Federation in Brussels. KFC, which sells a fried sausage burger and popcorn chicken in China, is expanding to smaller cities in the Asian nation.

“The science clearly links eating out with obesity,” said Margo Wootan, nutrition policy director at the Center for Science in the Public Interest, a Washington-based advocacy group. “Restaurants need to realize that eating out is a big part of people’s diets and they have an important role to play.”

It’s not just fast-food companies that are responsible, said Michael Schaefer, the Chicago-based head of global consumer foodservice research at Euromonitor International. People also are consuming more processed and packaged foods from grocery stores and moving to cities, where they lead hectic lives and don’t have time to exercise, he said.

“Fast-food chains, because they’re so heavily branded, are not surprisingly going to come to be identified with that,” Schaefer said. “But it’s not the sole driving factor.”

McDonald’s Visits

The companies point to other influences on diet.

“The average McDonald’s customer visits us two to three times per month, therefore the vast majority of meals are eaten elsewhere,” Becca Hary, a McDonald’s spokeswoman, said in an e-mail.

McDonald’s rose 1.4 percent to $100.63 at the close in New York. The shares have gained 14 percent this year, compared with a 9.4 percent gain for the Standard & Poor’s 500 Index.

U.S. fast-food chains accelerated their overseas expansion in the 1980s and 1990s as their home market grew saturated. The recession that ended in 2009 spurred more store openings abroad, especially in emerging markets with growing middle classes. Yum gets about three-quarters of its revenue from outside the U.S., while McDonald’s gets more than 60 percent from its international business.

Lifelong Customers

The cheap, high-calorie fare and advertising strategies aimed at creating lifelong customers that worked so well in the U.S. have proved effective abroad as well. In Chile, the McDonald’s menu includes a 949-calorie, two-patty Angus burger, three cheese empanadas with 357 calories and an Oreo-cookie frappe.

Andrea Xavier’s six-year-old son is among the new Brazilian devotees of American fast food.

“He’d eat here every day if he were allowed; he asks all week,” Xavier, a 34-year-old maid, said during an interview at a McDonald’s in Rio De Janeiro. “He always sees the television ads, sees all the boys there getting Happy Meals: ’Let’s go there!’”

The restaurant in Rio de Janeiro was decorated with balloon animals, cut-out butterflies and bunny masks. A poster advertising a live show by Ronald McDonald hung on the wall.

Yum Brazil

Yum (YUM) recently hired a general manager to open a Sao Paulo office and accelerate growth beyond its 100 restaurants in the most-populous South American nation, where the company’s KFC chain sells black beans, double-decker chicken sandwiches and chocolate mousse sundaes. Muktesh Pant, head of Louisville, Kentucky-based Yum’s international business, said the company sees Brazil as a “huge opportunity.”

Pizza (DPZ) chains also are expanding their presence in Central and South America. Domino’s, which has more international than domestic locations, is Mexico’s biggest U.S. brand, with 19 percent of the market, according to the data compiled by Bloomberg. The Ann Arbor, Michigan-based chain sells pizza, chicken wings and baked ham baguette sandwiches and offers canelazo bites -- biscuits baked with cinnamon -- for dessert.

Domino’s (DPZ), which had 5,327 international shops and 4,928 in the U.S. at the end of last year, could “easily” add 2,700 stores in its 10 most developed international markets, Chief Executive Officer J. Patrick Doyle said at an investor conference last month.

“It’s going to be a long time before we’re going to hit any kind of a cap on our ability to grow in international,” Doyle said.

African Market

Along with South and Central America, fast-food chains have been heavily focused on Southeast Asia and India. Africa may be next. KFC, with 700 locations in South Africa, is expanding in Lesotho, Namibia and Zambia. Domino’s is opening in Nigeria and Macedonia, and Yum has said it plans to accelerate growth with its Pizza Hut and Taco Bell chains in South Africa.

Still, the food chains may face resistance from health authorities. Brazil, where men gained almost 19 pounds from 1980 to 2010, is considering a law that would prohibit toys from being given away with kids’ meals at restaurants.

“We need to have the law approved,” Fabio da Silva Gomes, an officer for the Brazilian Ministry of Health’s National Cancer Institute in Rio de Janeiro, said in a telephone interview. Children go to fast-food chains for the toys and are “hooked by the hyper-palatable food,” he said.

Menu Changes

The companies have already been forced to make changes in menus and tactics in the U.S. McDonald’s, the world’s largest dining chain by sales, will later this month start selling an egg-white breakfast sandwich with just 250 calories. Burger King Worldwide Inc. (BKW:US) began selling a veggie burger in March.

In 2011, McDonald’s began putting apple slices and smaller packets of fries in its kids’ Happy Meals, reducing the calorie count by 20 percent. The chain also was forced by a city ordinance to stop giving away toys with its Happy Meals in San Francisco.

In Latin America, McDonald’s has cut the sodium in its kids’ meals, which have less than 600 calories a meal, by 10 percent, said Hary, the company’s spokeswoman.

“We believe that all food can be part of a balanced diet with appropriate exercise,” Virginia Ferguson, a Yum spokeswoman, said in an e-mail. KFC uses trans-fat free cooking oil and has lower-calorie and lower-fat items in Latin America, she said.

‘A Treat’

“Pizza is not an everyday meal, it is a treat,” Tim McIntyre, a Domino’s spokesman, said during an interview. “Consumers have full control of determining how indulgent that treat is” because they can customize crusts and toppings, including the amount of cheese, he said.

American consumers will have to do a lot more to undo the damage of the last few decades. American men have gained about 19 pounds, on average, from 1980 to 2010 and women are about 18 pounds heavier, among the fastest weight gains in the world.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Kevin Orland at korland@bloomberg.net


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Companies Mentioned

  • DPZ
    (Domino's Pizza Inc)
    • $77.0 USD
    • 0.26
    • 0.34%
  • BKW
    (Burger King Worldwide Inc)
    • $31.21 USD
    • 0.20
    • 0.64%
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