McDonalds vs Broccoli
Why do my kids like McDonalds, Oreo cookies, peanut butter, lean pockets, and chocolate milk - but not carrots, apples, grapes, broccoli, and fish? I'd like to advance the claim that differentiated packaged foods can be advertised with some expectation of future returns. It is much harder for carrots or broccoli to be advertised in a profitable way. My claim is that one source of rising obesity is the sytematic "advantage" of foodstuffs that can be branded. In large part, processed foods have a market advantage over more basic commodities.
There are some countervailing forces. Milk producers get together, sometimes with a government's assistance, to market their products, and carrot growers might do the same. But these producers encounter obvious collective action problems. Peanut butter is popular with kids, and many do not care whether it is Skippy or another brand. There are, in other words, some markets with enough concentration that individual producers find it worthwhile to promote a product even though much of the message will benefit other producers. There may be economies of scale or strong enough niche markets (some kids insist on a brand of peanut butter) at work. Chocolate milk and pancakes and hot dogs are popular even though there is but modest branding. That's ok for my theory, because I am not claiming that all processed foods are advantaged over all generic or more natural ones, but in fact some of these popular products got their start in an age when a single firm profited from advancing the processed food in question.
If it is hard to earn rents growing and selling broccoli, then there is hope for the assembler of natural foods. A great deal of broccoli finds its way onto pizza (alas, that is fattening), but a great deal could finds its way into crunchy salads and pita pocket stuffings and so forth. It is easy to point to the best selling soda pops as an example of the branding-obesity link advanced here, but it is interesting that some firms have made fortunes "assembling" and marketing water. An innovative assembler of unbranded foods can occasionally do well, and its promotions might lead to healthier diets without any government intervention or parental nagging. That would be nice. But overall, the reality of the market, as described here, may have a great deal to do with what we eat.