October 13/New York/Wall Street Journal-- Food and beverage companies with a greater percentage of sales from so-called “better-for-you” products do better, financially, than their peers with less healthful fare, a new report finds.

The report is from the Hudson Institute and was funded by the Robert Wood Johnson Foundation. It looked at financial figures from 15 large food and drink companies between 2007 and 2011.

“Better-for-you” foods include “no-, low- and reduced-calorie items, such as flavored waters or diet sodas, as well as products that generally are perceived to be healthier, such as yogurts and whole-grain cereals,” according to the Hudson Institute.

Examples include Oscar Mayer Lean Turkey and Wheat Thins from Kraft Foods, PepsiCo’s Pepsi Max and Quaker Oatmeal and Unilever’s Breyer’s Light ice cream and Lipton Dry Soups.

The report concludes that companies with a higher percentage of sales from the BFY products had a 50% growth in operating profit (compared to 20% at companies with a below-average percentage of sales of those items), outperformed the S&P 500 by an average of 60 points (vs. 40 points) and generated higher shareholder returns than the other companies.

It finds that these foods “drove a disproportionate share of sales growth in the past five years,” making up 40% of sales but generating more than 70% of the growth. To be sure, these products tend to be newer, which means they’re likely to sell better, Michele Simon, the author of a book about the food industry, tells CNN.com.

The report did not delve into whether those products were actually healthful and was not intended to set nutritional standards, lead author Hank Cardello,senior fellow and director of the  Obesity Solutions Initiative at the Hudson Institute, and a former food exec, tells the Health Blog.

Plenty of folks argue that the best way to build a healthful diet is to focus on whole foods whenever possible. The latest iteration of the U.S. dietary guidelines recommends a “healthy eating pattern” that “emphasizes nutrient-dense foods and beverages -- vegetables, fruits, whole grains, fat-free or low-fat milk or milk products, seafood, lean meats and poultry, eggs, beans and peas, and nuts and seeds.”

The WSJ just reported on General Mills’ efforts to make over its own food portfolio in a more healthful vein. As the new report suggests, this is a good business move for the company: General Mills tells the paper its fastest-growing items are those with a FDA-approved health claim.

However, General Mills is finding it tough to reduce the sugar content in cereals below 10g a serving, according to the WSJ. Lower than that and kids are not likely to keep reaching for it, the head of the company’s Bell Institute of Health and Nutrition says.

Lowering sodium levels in other products brings its own set of problems and, like sugar reductions, may be best accomplished when done with little fanfare, so consumers do not automatically think the food will taste bland.

 From the October 14, 2011, Prepared Foods' Daily News.