More people die because of the way they eat than from tobacco use, accidents, or any other lifestyle or environmental factor.
T. Colin Campbell, The China Study: Revised and Expanded Edition (2017)
[Note: The following is an analysis of a trend and how it may affect one sector of business, restaurants, not an analysis of any individual stock, though a few comments will be specific. Moreover, the paradigm shift in nutrition and lifestyle discussed here will have an impact not only on the food and catering business, but also on nutritionals, pharmaceuticals and healthcare.]
In general, the good news for the restaurant sector is people are eating out more, but the picture that emerges here is one where there is a lot of growth happening in what is for now a niche sector: vegan restaurants. You can see it in the big cities, Portland, OR even has vegan food trucks.
To get a clear focus on the big picture here, I like to point out: Why is 100 deaths a day from opioids a national crisis of epic proportions, while 1,700 deaths a day from CVD (Cardio Vascular Diseas) is business as usual? Below, we examine some of the issues raised by the new nutritional paradigm that has emerged from The China Study and the various clinicians and researchers who are working in the same vein of research, which includes doctors Caldwell Esselstyn, Jr., Neal Barnard, John McDougall and many others. We explore what the long term impact on the restaurant business might be.
The numbers are adding up. In its July issue, Consumer Reports states that there are now 3.7 million vegans in the USA. Obviously this is a rapidly growing phenomenon. To quote from Consumer Reports:
About 3.7 million Americans follow a vegan diet, which is stricter than a vegetarian diet in that it eliminates all animal products—not just meat, poultry, and fish but also dairy, eggs, and even honey. A third of the U.S. population says they are trying to eat less meat.
Meanwhile, the taste of our culture appears to be such that our “entertainment,” on TV is paid for by advertising for both the foods that cause indigestion, constipation, Type 2 diabetes and heart disease, and the drugs that are used to “treat it,” while on the news we watch the fight over our health care system, in which the fact that 75% of our health care dollars go to the treatment of degenerative diseases that are preventable or reversible with diet is never even considered. What is wrong with this picture?
From my personal experience, it would seem that I encounter primarily two groups where the vegan lifestyle is growing fastest. There are the 60+ who, like myself, decided that hunting for their next carrot made more sense than fretting for the rest of their lives over drug interactions, side effects, or what supplements to take. Some of them are ditching a handful of daily medications, sometimes all at once, and sometimes gradually over a year or so. Many become completely free of medications that in some cases they had been taking for years. Then there the twenty-somethings, who are taking responsibility for their own lives, and who also have various celebrities who inspire them, ranging from J-Lo to Ariana Grande, Miley Cyrus, Casey Affleck, Ellen DeGeneres, Alyssa Milano, Serena and Venus Williams, Brad Pitt, Beyoncé and Jay-Z, Russell Simmons, Al Gore, Mike Tyson, Wendy Williams and many others. One way or another this is a fast growing phenomenon.
A website called Vegan Bits puts the number of vegetarians/vegans at 2% of the population over 17, but the site does not analyze trends. With PCRM (Physician’s Committee for Responsible Medicine) winning battles like the vegan lunches in the LA County schools, vegans are the fastest growing segment of the vega-something-or-others, certainly if you add to that the weight of the AMA and the American College of Cardiology, who are now urging hospitals to drop carcinogenic cured meats from hospital meals and offer a plant-based menu option at every meal. Kaiser Permanente ((KFHP/H)) is promoting plant-based nutrition to all patients, and there is already a life insurance for vegans, HealthIQ. WFPB, the Whole Foods Plant-Based diet is becoming the dominant vegan tradition because of all this medical support. Veganism, as defined in the negative; no animal proteins in any form, is often more focused on animal welfare as a primary driver. WFPB may even accept honey, where some vegans don’t.
In short, the WFPB lifestyle is getting a powerful push from the medical field, for the simple reason that it is solidly evidence-based, which is different from all other diets which are mostly based on hypothetical positions and one-dimensional research. What needs to be understood from a demographic standpoint in the restaurant business is that one vegan in a party can determine the choice of restaurant for that party, the restaurant either misses out on that party or one person in that party is not ordering.
Potentially even more interesting are the country statistics, showing vegans at 5% in Israel, 4% in Sweden, and 2.7% in Japan. Gary Yourofsky might be the single most important influence in veganism in Israel. While there are precious few statistics on veganism in Russia, it should be noted that it is becoming a powerhouse in organic food production. In short, reading trends remains an art form, but something is afoot. We will look primarily at the USA in this article.
The Whole Foods Plant-Based Nutritional Paradigm
Patients come in and cry over the progress they are making with a Whole Foods Plant-Based Diet; nobody ever cries tears of joy over a Lipitor prescription.
Robert J. Ostfeld, MD. MSc.
Dr. Ostfeld is the Director of the Cardiac Wellness Program at Montefiore Hospital in the Bronx, and he represents the Esselstyn dietary tradition. The new nutritional paradigm that emerges from The China Study is exactly what it says: Whole Foods and Plant-Based. It uses whole grain and brown rice, etc. and no added oils or sugar. The no added oils guideline is based on the fact that your endothelial cells lose their bounce for up to six hours after a meal with added oils. As Dr. Ostfeld likes to put it, eating oily food is like inviting Mike Tyson to practice on your endothelial cells (there go the french fries and the potato chips!). The only acceptable source of oil or sugar are again in the context of the whole food, i.e. oil from nuts (in very modest amounts), or an avocado, or sugar from fruit, which turns out to be healthy even for type 2 diabetics.
On July 15th, I attended a workshop of the Montefiore Cardiac Wellness Program with Dr. Ostfeld and nutritionist Lauren Graf, MS, RD, who is its co-director. This program has ensured that there is a #WFPB menu option at every meal in Montefiore Hospital, and that the documentary Forks over Knives is always available on TV in the hospital. Ostfeld also teaches nutrition to medical students at Einstein, see also Confessions of a Reformed Cardiologist: A Plant-Based Diet and Your Heart with Dr. Robert Ostfeld.
The rationale for this new model is simple and is solidly evidence-based, following from The China Study, which was recently published in a revised, updated edition. The essence of it is that we’re over consuming protein, and don’t get enough fiber. We should be getting 5-10% of calories from protein, not the typical 15-20%, moreover animal protein promotes cancer while plant protein does not and may even inhibit it. In short, by switching to plant-based nutrition we are automatically getting the optimal level of protein and fiber, and the old-fashioned concern over “but how do you get your protein?” is utterly misplaced.
How Paradigms Work and Where to Get Your Own
Goethe, writing at a time when microscopes had just been invented, observed that all these researchers with their microscopes were mistaking the microscopic world for reality and lost sight of the big picture, the whole. Many people I come across have read Thomas Kuhn’s The Structure of Scientific Revolutions, yet people don’t recognize a paradigm when they see one. On one level a paradigm is a situation where assumptions, hypotheses, are mistaken for facts. LTCM had a trading paradigm but they never noticed it did not provide conformal mapping to reality and they never noticed until it was too late how their model was drifting from market reality more and more.
T. Colin Campbell offers some very profound personal insights in how the corruption of the medical and nutritional science really works, where the government, instead of providing objectivity and independence, has become the unwitting guarantor of a research model, an R&D paradigm that is divorced from reality in a simple but totally pernicious way. The entire framework and all the funding mechanisms are all geared to ascertaining the effectiveness of individual nutrients (or treatments and chemical in medical research!) on certain health parameters or disease conditions, and this prevents us from ever focusing on health, but instead we are focused on the treatment of disease, or, in the case of nutrition, maintaining a bad diet, just taking some more vitamin-C, or some such. The context of diet is mostly ignored, and we end up with an endless stream of often contradictory dietary recommendations, which fail to take into account if our whole diet is healthy or not. The same issue applies as much in medical research as in nutritional research. In other words, the paradigm is created with education, and maintained by the government, with good intentions, but with disastrous results, because the assumptions were rarely examined, until the China Study came along.
In the context of SAD, the Standard American Diet, nutritional supplementation seems to be an option, but it really is not. It’s like being stranded in a car with four flat tires, and when you call AAA, they don’t send you a flatbed truck but a salesman who tries to sell you a car with a full-size spare. The Whole Foods Plant-Based diet on the other hand is nutritionally complete with adequate diversity of foods. The only supplements you might ever need are some B12 and maybe some D vitamin. For now, the prevailing culture in academia and government, which drives research dollars, is the reductionist one that focuses on single nutrients and single treatments and their effect on health and diseases, while ignoring the total, holistic picture of health. The treatment of diseases is a very profitable endeavor, except we cannot afford it any longer.
Restaurants: What’s Possible, What Will It Take?
First and foremost, from a marketing standpoint it should be clear that restaurants should aim to always offer enough of a vegan option to accommodate parties in which even one person is vegan, or vega-anything. That becomes the challenge, lest they end up with the party leaving, or one person not ordering. In Chappaqua, NY every restaurant in town offers at least one no-oil WFPB dish at all times. Not coincidentally, Bill Clinton, who once credited Dr. Esselstyn with saving his life with this diet, lives in Chappaqua. So it can be done, but will it?
The point should be to always offer at least one no-oil WFPB dish, so as to retain that party, but of course today that demand is still low, but it’s growing, so it better be a good dish with universal appeal. Ideally, non-vegans should like it as well.
In the investment community, the story of Bill Ackman calling out Warren Buffet over his investment in the sugar water known as Coca-Cola is well known, and it is spectacular evidence of the total confusion that reigns in the area of diet and nutrition. Clearly, sugar is not a desirable nutrient, but sugar won’t give you diabetes, fat does. The fast-food sector is a major contributor. Pershing Square Holdings (PSH) has quite a presence in restaurants, with both Restaurand Brands (QSR) and Chipotle (CMG), both major sources of excessive fat intake and a host of other dietary problems. Buffet meanwhile made like a duck. He probably did not know either that fat causes diabetes, not sugar. Chipotle has its problems, but rats dropping from the ceiling are not the end of the story, just another incident.
Rating Restaurants: Is There Any Hope?
Besides AMA and the American College of Cardiology recommending that hospitals take cured meats off the menu (because they are carcinogenic) and offer a vegan menu option at every meal, the LA County School District is offering vegan lunches starting this fall. AMA has also petitioned the government to focus the SNAP program more on healthy, plant-based foods, not chips and soda. All of this indicates the beginning of a powerful trend. What the restaurants generally miss in their attempts is the avoidance of added oil in cooking which is now recommended by all the major serious representatives of the WFPB diet, from Esselstyn (father and son), to Ostfeld, T. Colin Campbell, McDougall, and most others.
The valuations of some restaurant chains were surveyed briefly by the Nattering Naybob the other day. Chipotle (CMG) came up for particular abuse over what seems to its absurd valuation. I might have liked to short it, but did not (yet?). The big picture is that we have known for more than twenty years (since the China Study was first published) that China is importing American degenerative diseases with American style food and restaurants. Meanwhile, some of these chains are seeing China as a growth market, but the Chinese government does not want an American style health care and environmental crisis and is now moving to limit meat consumption. At the same time, stateside, the end customers of the value chain that extends from the agribusiness to food and restaurants and eventually to the health care system are going broke: we are running out of ways to pay for the health care that results from our meat-based diet.
For now, we have collectively refused to deal with these issues, but T. Colin Campbell reports in the updated China Study how Caldwell Esselstyn, Jr. (the father) has had many former colleagues from the Cleveland clinic as patients in his plant-based nutrition practice, all following his WFPB dietary regime, and some are starting to realize that the clinic could get sued if they don’t tell their patients of this treatment option. Dr. Esselstyn presently directs the cardiovascular prevention and reversal program at The Cleveland Clinic Wellness Institute..
The upshot for the restaurant business is going to be long-term value destruction as this small budding trend grows, for none of the major chains are even remotely suited to offer any serious vegan meals, though Starbucks (SBUX) manages to have an excellent (somewhat undersized) vegan oatmeal breakfast; with an apple it’s not bad. Short term, restaurants might be able to limit losses by offering at least one or more legitimately vegan choices, but it’s going to be a challenge. Here are some of the things I found, based on the websites Vegan Bits, referenced above, and a website called EatThis, notThat!, which offers a review of vegan (defined in the negative as no meat, fish, fowl, diary, honey) options at fast food restaurants, but is apparently clueless of what WFPB (Whole Foods Plant-Based) really is. The rating of vegan restaurants on EatThis was absurd and they seem to have taken it down since I started writing this piece. Let’s begin with the Nattering Nabob’s favorite whipping boy, Chipotle (The others he refers to for comparison are MCD, YUMC, YUM, KFC, Pizza Hut (YUM), and Taco Bell (YUM):
Chipotle (was rated #1 on Eatthis.com) offers a Vegan Tofu Burrito, which clearly misses the point. Overall CMG reports that tofu burritos, tofu tacos and tofu bowls account for 3% of sales. You can find your vegan options here, and Chipotle deserves high marks for including brown rice among the options, but discloses nothing about added oils, let alone they understand the future is oil-free cooking. In short, they nominally cater to vegans, but missed out on the no-oil WFPB trend, which is the fastest growing segment.
Taco Bell is part of Yum! Brands, along with KFC, Pizza Hut and WingStreet. It got high marks on EatThis.com in the now-defunct rating. In reality, it offers just a few dishes that it proudly announces are approved by AVA, the American Vegetarian Association, missing the point entirely. Vegetarianism was popular in the first half of he 20th century, but the research since then shows that ALL animal protein is bad and so it is the no-oil vegan style which is growing the fastest and has the best research behind it, let alone increasing official recognition.
Little Caesars is private, part of the Ilitch Companies, out of Detroit. I mention it for laughs, because it scored #11 on the ‘vegan’ list of EatThis.com, suggesting that its Crazy Bread and Crazy Sauce constitute a vegan option. This again shows how out of touch this listing was: Crazy Bread drips with fat and has parmesan on it, and the sauce may be vegan for all I care, but that won’t save the day. This is a nutritional disaster that would not pass muster in a WFPB context.
Burger King (NYSE:QSR) made #12 on the list but the review pointed out that its Veggie Burgers are NOT vegan, for they contain dairy, (not to mention drip with oil). They counted the french fries as vegan, which is dubious because of the added oil, and the house salad would pass muster only without the oil and vinegar dressing, never mind any of the other options.
Wendy's (WEN) made #21 on the list because it offers a baked potato, and a garden salad, but there is not a single dressing without dairy in it, not to mention oil. Close but no cigar. Clueless would be a better word.
This is just a sampling but it shows why the action is not in the chain restaurants, and they are as a group rapidly losing out as all vegan restaurants are increasingly making inroads. The crux of the matter is that either they don’t offer any serious vegan option, or mostly just a nominally vegan option, but come nowhere close to the WFPB lifestyle. As a side note, in recent months both Häagen-Dazs and Ben & Jerry’s introduced non-dairy icecream. The trend is gaining traction rapidly.
Implications for nutritional companies
For the most, part all supplements are furthermore superfluous under WFPB, with the possible exception of some B12 or some D vitamin, but even that may not be needed. Protein shakes are nonsense, for if anything, we over consume protein and we need less of it, which WFPB will accomplish - even a simple potato or rice has 9% protein, and the ideal range is 5-10% of calories from protein.
Interestingly, the Nutrition Dept at the Harvard School of Public Health whose first president was a notoriously conflicted and controversial scientist, Frederick J. Stare (who did everything in his power to legitimize the nutritional disaster that is SAD, the Standard American Diet), but today they have co-opted the plant-based nutrition revolution because it is solidly evidence-based and incontrovertible, such as on the issue of lower risk of type 2 diabetes for people on a WFPB diet, and more general advice here. Its Prof. John McDonough is a visible public advocate of the plant-based diet.
Implications for life sciences and big pharma
In this article, I took the liberty of extending T. Colin Campbell’s comments on the myopia in nutritional research to medicine as well. Campbell calls this reductionism: focusing on the effects of single nutrients, without regard to the context of the total diet and lifestyle. In medicine this focuses on the effects of particular treatments on specific diseases, again without consideration of the total health framework, which is how we end up with prescribing statins, when people should change their diet instead, let alone stents and bypass surgeries for hundreds of thousands of dollars, which are all preventable. The full impact on life sciences and big pharma both will be very far reaching. Worth separate articles, if not a book, and I am not sure I am the one to write it, but see below on some available literature.
Some of the specific medicines that stand to become superfluous under wide adoption of the WFPB diet include anti-histamines, ant-acids, statin-drugs, blood pressure medication, anti-inflammatory drugs, laxatives and fiber supplements, ED treatments (ED being merely the canary in the coal mine of CVD (Cardio Vascular Disease), and many others, including the fact that a lot less insulin will be needed and there is no more need of aspirin to prevent a heart attack. This is a whole topic by itself – either multiple articles or a book ( I am not volunteering).
Implications for healthcare
He soon became a specialist, specializing in diseases of the rich.
The implications for health care will be unbelievably profound, as I realized recently when mulling over whether it was worth having that colonoscopy my physician has been pushing me to do. Luckily for me, I stumbled into a brilliant video from Dr. John McDougall, Cancer screening is a scam, which lays out the risk assessment quite precisely, and considering a low risk lifestyle and WFPB diet, the risks of the colonoscopy now outweigh the risks of colon cancer later, decision: no colonoscopy for me. Pretty much a sigmoidal exam at age 60 and occasional testing for blood in the stool should be all that’s needed. Given a high fiber diet, the risk of complications from the colonoscopy is greater than the risk of dying from colon cancer. (See also the accompanying newsletter article and note this alone is one $3,000 procedure avoided every five years.) Meanwhile, Esselstyn, in an interview with Campbell in the updated China Study, describes in great detail the conflicts at the Cleveland Clinic, where more money is made with heart surgery and counseling on the plant-based diet is non-existent to this day. The issue will be unavoidable, and there will possibly be lawsuits, this is the information age and all this information is now public.
In the general sense, the role of health care will have to change from specializing in the (very lucrative) treatment of disease to the far less lucrative, but much more socially rewarding pursuit of health, which was much the original idea, before the Rockefeller influence gave rise to today’s medical-industrial complex. In our day and age, the “rich” are the people with insurance, which is becoming more and more unaffordable, so eventually we’ll have to do something about the 75% of the problem, not just tinkering with the administrative costs.
The structure of the healthcare system is such that it is mostly dedicated to disease treatment and symptom suppression which guarantees that workers can keep working but the consequences are far bigger medical problems later, when people are retired and less able to pay, meanwhile the public discourse is all about how to pay for health care, and seems to assume that health care itself is a sacred cow, when in fact 75% of health care goes to perpetuating degenerative diseases that can be eliminated with a better diet.
Implications for farming and agribusiness
The implications here will be life-changing, but the story of mad Cowboy Howard Lyman sets the tone. The return of family farming is just going to be part of the story, farming may once again become a healthy profession, from being one of the most toxic occupations you can find for the past fifty years, as Hyman’s story testifies.
There is a brilliant infographic on Inhabitat, detailing the staggering environmental cost of a diet based on animal protein. Depending on what vectors you measure, a meat and dairy-based diet, can be easily 10 times more resource intensive than the plant-based alternative, making the choice for a WFPB lifestyle easily the biggest thing anybody can do for the environment, far bigger than trading in your ICE vehicle for an EV – that is tinkering in the margin, for you are moving a 200 lb person with two tons of steel before and after, and the embedded entropy in an electric car, combined with the impacts of mining and recycling more or less evens the score. For the most part, we’re moving pollution from the tailpipe to the smokestack.
The top 10 vegan cities in the world
Another way of examining veganism as a demographic trend can be found on HappyCow.net, which offers a list of the top 10 vegan cities in the world:
#1 Berlin (Note the German government this year banned meat-based dishes at official functions for environmental reasons), and the (predicatble) counter attack is already under way.
#2 Los Angeles, and the level of penetration there is suggestive of the fast-food sector rapidly losing out. Add to that the new program of vegan school meal options, which strongly supports the vegan lifestyle.
#4 Taipei: Makes total sense, for traditional Chinese cooking was already very low on animal proteins, and tofu is a staple – after all traditional, country-style chinese cuisine was the basis for the China study by comparing it to urbanized cooking with higher animal protein intake. In Manhattan some of the vegan Chinese foods can be found at Maywah market.
#5 New York City, where the comment says that even without the outer boroughs, Manhattan alone is blessed with 86 fully vegan restaurants, including gourmet options like Candle79 and Blossom. NYC reportedly has more vegan restaurants than any city on the planet. In short, investors in the restaurant sector who want to see the future, should explore what is happening before their very eyes in NYC.
Next on the list are: Singapore, London, Tel Aviv, Portland, OR, and San Francisco. It is evident that this is no longer a passing fad. This movement has depth and staying power.
Ivan Illich, Limits to Medicine: Medical Nemesis: The Expropriation of Health. The famous Jesuit thinker trained his sights on medicine first in 1975 with the first edition of this book. It is more topical than ever, for the medical system has become a major threat to heallth. This is a new edition of this classic book. The comments on Amazon are priceless.
E. Richard Brown, Rockefeller Medicine Men: Medicine and Capitalism in America. An indispensable analysis of the origins of the medical industrial complex.
T. Colin Campbell, PhD, and Thomas M. Campbell, MD, The China Study: Revised and Expanded Edition: The Most Comprehensive Study of Nutrition Ever Conduted and the Startling Implications for Diet, Weight Loss, and Long-Term Health. The seminal study. For the timid, there is a 37 page abstract as well.
Caldwell B. Esselstyn Jr. MD., Prevent and Reverse Heart Disease: The Revolutionary, Scientifically Proven, Nutrition-Based Cure. Esselstyn's work is the clinical corollary to the nutritional research of T. Colin Campbell, as borne out by the subsequent collaboration of these two. Bill Clinton at one point credited Esselstyn with "saving his live," after his own heart problems.
A personal note
One of the qualifications I bring to this topic is that I was raised in a doctor’s family, and frequently met my father’s colleagues at our dinner table. The failure of the allopathic Western medical model was a frequent topic of converstation, along with my father’s general disgust with the pharmaceutical industry. Even though he was a psychiatrist, he practiced more as a Jungian psychotherapist, and refused to prescribe medications, and was frequently outraged over the bribery attempts by the pharmaceutical companies. The prevalence of iatrogenic illness, the overuse of antibiotics, and the deleterious effects of symptom suppression as opposed to healing were all frequent topics of conversation at our dinner table, where professional colleagues, physicians as much as psychiatrists, and psychotherapists were frequent guests.
Along with it all, my parents turned vegetarian when I was 2-1/2 years old, but in those days there was still a concern with: “But how do you get your protein?” While mushrooms, and buckwheat, and some tofu and tempeh were all options, still, in the dairy country of Holland, dairy was a strong presence, and we thought cheese was health food and milk nature’s perfect food. I spent some summers working on farms. Later, I went through various periods of omnivore for at least 30 years, alternated with bouts of vegetarianism, and a first failed attempt at veganism when I read Esselstyn’s book the first time shortly after it came out, but in 2015 I committed to do it right, and I have not looked back since. I passed 65 at my fighting weight dating back to when I was 22 and free of any medications. Recently, a parish priest in my district also became a patient of Dr. Ostfeld in Montefiore, and this last week he shared his remarkable progress in his first three months with me over our monthly vegan supper at a local restaurant (and NOT a chain restaurant, I assure you!). He and I and several others will be attending the Montefiore Preventive Cardiology Conference this fall, which is meant for cardiologists and physicians, but open to the public as well.
The convenience of fast-food and casual dining is appealing and still producing good results, judging by the current returns of some of the restaurant chains, driven by the overall increase in dining out. There is no short term action on this topic, although personally I have not liked Darden (DRI) for a while, but mostly for financial, and more imminent reasons. Some downward move already took place and I rode it on the way down. Nasdaq scores it at 29% on the Benjamin Graham criteria, LTM insider sales are 9, buys 0.0
There is a small but rapidly growing counter-trend setting in, where growth is shifting to vegan dining at different restaurants than the names you know. In my own neighborhood, ethnic restaurants thrive, and the chains are losing ground. I've heard a young mother at a community planning event exclaim as her first wish for our district: "Not another [expletive deleted] fast food restraurant! I want healthy food for my kids!" Choices at the supermarket are changing growing fast. Consumer reports in its survey of supermarkets gave Wegmans’ top rating again, and noted that it has great vegan options. There is a paradigm shift in the works, and for now the fast-food and casual dining sectors are caught flat-footed. This is a trend worth watching if you are interested in restaurants and all the other industries I've mentioned. People will have to eat. The question is what and where.
Disclosure: I am/we are short DRI.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.