Last year's health meme was "Sitting is the new smoking", which focused the collective consciousness on exercise, or at least avoiding sedentary life style. Entrepreneurs have capitalized on this elevated interest, most recently by developing a variety of fitness tracking products, e.g., FitBits, Pebble watches with motion sensors, and smartphone apps that track motion. Then major tech companies entered the fray: Samsung with its S-Health app, and then
Now I see a similar meme emerging, focused on eating habits: "Sugar is the new cocaine." Like "sitting is the new smoking", the value here is getting people to pay attention with a little bit of shock and a simple idea that focuses consciousness on an important issue: how their eating habits impact health. And entrepreneurs are again leading the way with products and services that help health-conscious people improve their diets.
There is scientific basis for the idea that sugar should be compared to cocaine. Research indicates that sugar can trigger the release of chemicals in the brain that produce a euphoric effect comparable to a cocaine high. Another study focused on the addictive power of Oreas (a "food" with very high levels of both sugar and fat) and found Oreos are equally addictive as heroine or cocaine.
But whether cocaine or sugar is more addictive really does not matter. The bigger point points are that the high-sugar, high-fat processed foods that Americans (especially) eat are strongly addictive, and about 30% of U.S. healthcare spend (about $1 trillion per year) is driven to a significant extent by unhealthy eating. It is easy to sanity-check this number. About 80% of U.S. healthcare spend is driven by chronic diseases, and this is true for people of all ages. Bad diet is a major cause of the leading chronic diseases (e.g., diabetes, heart and vascular disease). If you could eliminate bad eating habits for some representative group, it is believable that costs could decline by ~30% over time.
So, it's simple. All you have to do is reverse a mass-market addiction. Who wants to take that one on? In fact, entrepreneurs are eager to try, in a number of different ways.
• The most direct approach is nutritional advice. Several companies are offering mobile/cloud services help people eat healthier, e.g., Nutrino, Venio, and Foodzy. The winner here will the the company that can prove traction: lasting behavior change and measurable improvement in health metrics.
• Delivery services that make healthy food more available are another angle. A baker's dozen of startups are taking this approach (but not delivering much food from bakeries, I expect).
• Investment in food tech is also growing fast. Typically these companies aim to enhance healthiness and sustainability of the food supply. TechCrunch commented: "As software is eating the world, it was only a matter of time before it began to nibble on the [food] industry.
Healthy eating is a hard problem, but the value creation opportunity is second to none: $1 trillion of hard cost savings from healthcare, and on top of that the "soft" value of longer, healthier lives. Individuals, their employers, and their insurers should all care deeply. Entrepreneurs and investors who make substantial progress on this problem deserve huge exits.
Notes:
**New Atlantic Ventures, in which I am a partner, is not invested in any of the companies mentioned in this post, but we do invest in other companies in this category.
