The last time I started flipping through some of the channels on my television, like most of you out there, I noticed an amazing number of "solutions" that are presented to those who are looking for the right diet. Go to your favorite local bookstore and you’ll be presented with the same. Lots out there, how do you choose? Well, in my estimation, 
there’s a whole step that needs to be taken before you pick up that phone or grab that book off the shelf. You need to understand exactly what is to blame for our current diet that contributes to this dilemma.
Understand that being overweight is not just a disease; it’s really a symptom of so many other things wrong with your diet. And today we turn to our doctors, our medical experts, whether it be headaches, body pain, fatigue, arthritis, all these common ailments. They go, "Oh, you’re getting older" as opposed to "These are symptoms of your poor diet, just as being overweight is."
What’s to blame for our current diet? Amazingly, it’s economics. We live in a $10 trillion economy. That’s $10 trillion, $10,000 billion a year of new goods and services being produced by Americans. Within that, $1 trillion are our food companies. And $1.5 trillion are our medical companies. Food companies, like any good businesses, are always trying to increase the consumption of their product. Only in food there’s an unwritten law of marketing called potato chip marketing equations.
A potato chip marketing equation means that 10% of your customers buy 90% of your product. This is true for a lot more than food. Take a moment as an entrepreneur or businessperson and think. You have customers who consume your product, but you probably have a few who consume 10 times the amount of other customers. That’s a potato chip marketing equation. You may go out and buy one or two, three bags of potato chips a month. A few chips for a sandwich, something to put as a garnish. Somebody else may be buying one bag a day. They’re buying 30 bags; you’re buying three bags. See the potato chip marketing equation? Ten percent of your customers consume 90% of your product.
Well, today in food, "If I can get you overweight" becomes the marketing campaign. In other words, suppose 150 pounds is your normal weight and I can get you up to 180 pounds, 20% overweight. When you add that extra 20% overweight you don’t increase your food consumption 20% a day, you double it to 200% a day. In other words, your caloric intake to maintain 180 pounds is almost twice the caloric intake you need to maintain 150 pounds.
Now stand back for a minute and think of it from a standpoint of McDonald’s or any food company. Can you see how if I can get you 20% overweight, put on those 30 pounds, you stand in line and you buy double the number of Big Macs? But you don’t take up double the amount of space or time with the cash register. You see why you’re my most profitable customer.
Now the food companies, in effect, market to people to make everyone part of their potato chip marketing equation. They’ve, in effect, almost given up on getting new consumers. It costs on average $100 to get a consumer. In terms of advertising, if you ever took those $3 million Super Bowl commercials, then drill down to the number of people who’ve tried the product because of the commercial, it’s more than $100 a person to educate a consumer to try your product. And then they might not like it or they may not buy more of it!
Do you see how much more efficiently you could spend your marketing dollars getting your existing customers to buy more of your product? How would you do that? Well, suppose you find out that a customer eating your potato chips is full after six ounces of potato chips. You’d make five-ounce bags. So after the end of the five-ounce bag, they have to rip open another one. Knowing they’re going to go stale, they probably consume 10 ounces. And then if they get fat and overweight, they’ll consume more bags and so on and so on.
In effect, these high-consumption customers, the 10% of the potato chip marketing equation, are studied like rats in the laboratory. No expense is spared. If they love Christian music and have a favorite Christian singer, guess who’s singing in their potato chip or fast food jingle? If they have a certain celebrity or singer they like, guess who ends up singing in the commercial to pitch them and tell them why they should eat more?
Here’s an example I’ll give you. If I hand you a banana and suppose you’ve never had a banana before, and isn’t the banana an amazing example of God’s packaging. It lasts six or eight weeks, it’s biodegradable, and it tells you just when the banana’s right to eat. But if I hand you a banana and you’ve never had one and you eat it, you go, wow! I bet at the end of that banana you think it’s the most exciting, moist, delicious thing you ever had and you probably say, "Can I have another?" I hand you another banana.
What happens at the third or fourth banana? Even though it was the most delicious food you ever tried, I bet you don’t want to see a banana. So I give you an apple. You go, "Oh, this is great! Just what I wanted." And you eat a second apple and a third apple. What happens with the third apple? You don’t want anymore apples. Notice something. God gave you taste buds. Those taste buds tell you to eat the banana, get the potassium from the banana. Eat another banana, but then, no, you don’t want bananas now, you want apples, you want some other kind of fruit, you want something else that has the vitamins your body needs.
Now, suppose I give you a potato chip. At what point after two, three, four, 10, 12 bags do they no longer taste good? How about McDonald’s french fries? Notice something: All processed foods never get tiring. Why? Because they have chemically altered the food substances in that food from a natural substance that your body would get tired of to make sure you’re never tired of it. They mix the different variations in the food or the processing, particularly children’s foods, so the child never says about the Oreo cookie, "Thank you, Mommy," but always says, "May I have another, may I have another?" And when the child finally says, "I had enough Oreo cookies," they change the formula so children never say they’ve had enough but scream hysterically when you take them away from them.
Now wait a minute! Who are these companies? Could food companies be this sinister? Who do you think are our food companies today? Well, do you remember how cigarette companies did this in the ’50s and ’60s? They made special brands for children. They even had celebrities go on television and tell people they would be healthier if they smoked their cigarettes. What happened to these companies? The government came down on them. The government said stop marketing all these vicious, terrible products like cigarettes to Americans, and they go, okay—and that’s what they do overseas by the way, they sell these cigarettes to children in India and all these other countries where they’re no longer restricted and it’s easier for them to control the government.
So as you’re starting to see, our problem with obesity, which is ultimately caused by our poor diet, is really an economic problem. It’s because we have companies in our country that should be doing what they’re doing best, going out to get more customers. But in this case, biological laws are conflicting in the sense that the biological law means get people fatter and fatter so they consume more unhealthy food.
When they consume this terrible diet, they end up with all types of medical problems, and they go to the doctors for treatment. When’s the last time you went to a doctor and the first thing he said was, "List everything you’ve been eating for the last week and let’s analyze your diet"? The medical companies are in effect in a conspiracy of sorts with the food companies. They’ve almost said to the food companies, we’ll treat the symptoms of this bad diet. We will never treat the cause, your bad food.
Now medical companies today, they target their high-consumption customers. Only for them, it’s not a consumer; it’s the 900,000 physicians in the United States. The physician to a medical company, be it a supplier or product or service or a pharmaceutical company, is called a technology dispenser. They don’t call them doctors; they call them dispensers of their technology. Their goal is to get the doctor to dispense more of their technology to you and get you to pay for it. In effect, they have these people called detail people, which is a euphemism for a very attractive person of the opposite sex who takes the doctors to dinner and gives them gifts and lavishes their family with cruises, directly based on the amount of prescriptions they write for their prescription drug.
Doctors today are totally dependent, as most of us are, on new technology. But they learn about this new technology from the very drug companies who make the technology. We see it today, very sadly, when you look at specific ailments around the country and you see doctors in Louisiana prescribe completely different treatments than doctors in California for the same ailment for the same racial group. And the reason, of course, is that different medical companies have different market shares, just like food companies do, in different parts of the country.
What I’ve just told you should have upset you. It should have upset you even if you’re not overweight because you know people whose lives are crippled if not ruined by being not just overweight but clinically obese. Translate 27% clinical obesity into the population. That’s 77 million Americans who are clinically obese. That’s 184 million Americans overweight. And when I started studying the subject, those numbers were 20% less. When I started, it was only 50% overweight. In five years it became 61% overweight. Those numbers have doubled since 1980. I said, oh my, I’m an economist. I’ve got to run these numbers. How much time do we have left before the whole population is overweight and obese?
Around the time I was studying this, my software company went public. I took some of the proceeds, built a beautiful beach house in Malibu, and my family started spending the good life out in California with lots of celebrities on the beach. As I stood on the beach and watched several of my celebrity neighbors run by, I realized I’m on a different planet. Here in Malibu, where people were fairly wealthy and upscale, people seemed healthier each year as they aged. I began to ask some questions about their diet, and I quickly discovered that my neighbors living in Malibu had virtually a whole different approach to food and to medical care.
Benjamin Disraeli once said of England that he was in fear of the country becoming two nations divided by great want. In the United States today we have become two nations. But we’re no longer divided, thank God, by race or by ethnic background or by country of origin. Our division is based on health. We have one nation, 61% of our population that’s overweight and getting unhealthier as they age. We have a new nation growing among our wellness elite who are getting healthier as they get older.
To the wellness elite, each act of apparent pain or denial — from a session with their personal trainer to navigating through the menu at an exclusive restaurant — is almost a religious positive experience. When I was growing up, I had kosher relatives who’d only eat certain kosher foods. And I was always brought up to think, oh, Uncle so and so can’t eat this and the others can’t eat this, like there was something they were deprived of. It was only years later when I started spending time with their children in Israel, where many of my relatives live, that I realized that being kosher is not deprivation; it’s an act of saying thank you God for this knowledge about how to eat, although I disagree with many of my kosher relatives on what they should be eating.
To the wellness elite, each act of navigating through the menu at a restaurant or eating healthy food or working hard with their trainer is not punishment; it’s an act of saying thank you God for this knowledge of how to keep my body healthy. And they feel good doing what to us sometimes looks like deprivation.
As I began to focus on the wellness elite and their diets and their approach to medical care, I began to realize there might be a business here. I bet lots of people would like to be healthier as they age. I bet lots of people would like to be stronger if they knew what type of diet or what type of exercise to do. I wonder how big this business could grow.
I was shocked to quickly find out that the wellness business, which largely didn’t exist one or two decades ago, is already a $200 billion industry. I got excited and I started running the numbers. If we’re already spending $24 billion on fitness clubs and trainers, and $70 billion on vitamins, including supplements added to food, where is this business going? I could quickly see that the $200 billion we now spend on wellness was the tip of the iceberg and that it would soon grow to a $1 trillion industry or larger by 2010.
And before you think $1 trillion’s a lot of money, 10% of our economy, the IBM PC, came out in 1981. The computer virtually didn’t exist before that but was a trillion-dollar industry by 1990. The automobile came out in 1908 as a play toy for the rich. And it quickly became something that changed the very way we live and a trillion-dollar-industry equivalent today by the 1930s. To project that we will have a $1 trillion business in wellness by the year 2010, if anything, is an understatement.
