Engineering the Future of Food A revolutionary blurring of foods and drugs is transforming the industries that make them and promising to help us age gracefully.
(FORTUNE Magazine) – A few months before Charles "Chad" Holliday was installed as Du Pont's CEO last January, he spearheaded a bold stroke: his company's $1.5 billion acquisition of an obscure Ralston Purina unit called Protein Technologies International. As a preview of his strategic smarts, it fell embarrassingly flat. PTI processes soybeans into food ingredients--seemingly worlds apart from the high-tech markets expected to propel Du Pont's growth. Analysts called the purchase puzzling; "a staggering price," one was quoted as saying. On the day the deal was announced, Du Pont's shares slipped 31 cents to close at $65.63, while Ralston's shot up $3.44, to $91.69.
What was Holliday thinking?
You wouldn't know it from the frowns on Wall Street, but he was helping to launch one of the most dramatic industrial transformations of the past few decades: the "life science" revolution, under which chemical and agribusiness companies are hitching their wagons to biology. Just what this massive mutation will entail is still being worked out. But there's no doubt it will marry businesses that once seemed like different species, from food processing to drug research. To see why the marriage makes sense, consider how the world looks to your cells. As far as they are concerned, Kellogg and Merck are already in the same business--selling molecules they can use.
The buzz about life science began last year after Monsanto went on a stunning Cornbelt shopping spree, spending over $6 billion for seed companies. Not to be outdone, Du Pont shelled out $1.7 billion for a 20% stake in Pioneer Hi-Bred International, the top seed company. A story was born: Ag-biotech was finally field-ready, and the archrivals were scrambling to secure rights to the seeds they needed to get their advances into farmers' hands. The payoffs from gene-tweaked seeds would include everything from bug-resistant crops to plants that churn out plastics precursors.
And yet bioengineered seeds are not the main agent of change in the life-science revolution. Rather, it's food--or, more precisely, the blurring of the line between food and drugs. While the mad scramble for seeds riveted attention on life science, it can't compare in scope with the $29 billion merger of Sandoz and Ciba-Geigy in 1996 to form Novartis, which sells everything from baby food to arthritis drugs, or the similar pending merger of Monsanto and American Home Products, valued at $35 billion when announced in June. Nor does it explain a recent outbreak of related hybridizations, such as Warner-Lambert's joining with Celestial Seasonings to sell throat drops, and SmithKline Beecham's leap into the dietary-supplements market. These presage an unprecedented melding of edibles and pharmaceuticals.
The media emphasis on biotech is misleading in another way: It makes the payoffs seem further away than they are. Signs of the revolution are already visible in grocery stores--calcium-fortified orange juice to help ward off osteoporosis, herbal tea with antioxidants that may lower cancer risks, eggs with fish-derived fatty acids to avert heart disease. Functional foods, as the foodmakers call these new health enhancers (drug sellers prefer the term "nutraceuticals"), represent an exploding market conservatively estimated at more than $29 billion a year in the U.S., according to a recent report by Decision Resources, a Waltham, Mass., health-care consultant.
Many more functional foods are in the offing--cornflakes, say, laced with chemicals from tomatoes to lower cancer risks, or spaghetti packed with soy compounds to prevent osteoporosis. Says Du Pont executive vice president Kurt Landgraf, who heads the company's life-science sector: "As we enter 2000 and beyond, I believe we'll see massive changes in the way mankind deals with disease and nutrition. To be a player, you must fill in a strategic matrix that spans the entire marketplace. It will include biotech, but also things like food processing and medicinal claims for foods like soy, which can be proved through clinical trials."
In short, life science refers to a swirl of diverse biomedical advances that are beginning to jell. Biotech will speed the jelling. But it isn't necessary to make revolutionary foods, and that's where the big action will be--U.S. retail food sales total almost $500 billion a year, about five times the size of the pharmaceuticals market.
Consider an unfolding story: Recent research suggests that men with incipient prostate cancer may be able to slow the disease to a crawl by eating lots of tofu and other soy-based foods. That's inspired the National Cancer Institute to sponsor a clinical study in which prostate patients will consume precise doses of soy derivatives. Meanwhile, researchers are trying to figure out how soybean molecules may check tumor growth.
Eventually bioengineers may slice out soy genes that make tumor-blocking chemicals and splice them into wheat, corn, and other grains to create a cornucopia of anticancer foods. (Actually, life-science revolutionaries use guns, not knives: Devices called gene guns bombard plants with bits of DNA stuck on tiny particles of gold, embedding foreign genetic material inside the plants' cells. In the 1980s gene-gun pioneers used a .22 rifle to launch their transforming buckshot--now blasts of compressed helium do it.)
But using biotech to generate new anticancer foods may be overkill--it might be easier to simply add soy extracts to traditional foods. That's one reason Du Pont paid a premium for PTI--it's known as one of the food industry's prolific backstage creators, stirring up new soy-based recipes for its more conservative brand-name customers to play with. (Remember the last time a big food company conjured a Viagra-like blockbuster? Think Diet Coke, 1982.)
PTI began doing prep work for functional foods years ago as part of an initiative led by executive vice president Charles "Ed" Coco, a former professional dancer turned chemist. First on the agenda was rolling out premium-priced products with special virtues, such as meat ingredients that make hot dogs firmer. Meanwhile, PTI sponsored nutrition research on soy-based foods--a few years ago it helped prove that soy proteins are on a par, nutritionally, with those in milk, meat, and eggs. With sales expected to reach about $500 million this year, PTI is small compared with soy processors such as Archer Daniels Midland. But it dominates the lucrative market for soy protein isolates, one of the most versatile foodstuffs around--PTI's isolates are in everything from Isomil baby formula to Campbell's mushroom soup to Three Musketeers candy bars.
Next on PTI's agenda is elevating soy from additive to primary ingredient in a multitude of mainstream foods. Recently Coco and colleagues sat around a table at the St. Louis company explaining this, while plying me with some of PTI's experimental concoctions--somewhere between the tasty faux chicken nuggets and barbecued beef, all mostly made of low-fat soy protein, I found myself wondering whether asking for seconds would be bad form.
Fabricating guilt-free sin food is a worthy feat. But the industry has been there, done that, and it's not why companies as diverse as Du Pont and Kellogg have formed units devoted to functional foods. (To stress that its new unit will have close ties with its existing pharmaceuticals business, Du Pont calls it a nutraceuticals group.) Rather, they're attracted by the advances in nutrition science, coupled with demographic changes that are swelling the market for health foods.
The latter is the graying thing: Lots of people are living to 80 and beyond--about one in four Americans will be over 60 by 2005. Ever more of us are getting serious about trying to stave off dread diseases, and we buy the idea that diet can help. Our dietary superegos are finding it easier to do their job, thanks to standard nutrition labels on food packages that constantly alert us to insidious id stuff like saturated fat. No wonder 72% of consumers say they've changed their diet for health reasons in the past five years--according to the International Food Information Council, an industry-funded group in Washington, D.C.
Food companies have long played to this trend with "lesser-evil" foods--mainly ones with lower fat, cholesterol, and salt. But now they're taking a less Calvinistic approach: The emphasis in functional food is shifting from "removing the bad to enhancing the good," says Clare Hasler, executive director of an interdisciplinary functional-foods program at the University of Illinois. An example is the calcium fad, which took off in 1995 when Tropicana began fortifying its premium orange juice with the bone-building element. Extra calcium is now touted in everything from rice to cereal bars.
Fortification isn't new--vitamins and minerals have been added to foods for decades. But unlike old-style fortification, which involves adding small doses of essential nutrients to prevent acute diseases of the young, such as rickets, the new kind is mainly aimed at giving us liberal doses of nonessential nutrients to keep us from slumping over as we ride into the sunset. That opens up a vast array of commercial possibilities. "There are about 44 nutrients known to be essential for health," says Johanna Dwyer, a nutrition researcher at Boston's New England Medical Center. "But there are thousands of phytochemicals," or plant compounds, many of which may provide health benefits.
In fact, phytochemicals may well become the soul of the new life-science machine. Once the province of health-food fanatics, such compounds are now emerging as mainstream fads. For instance, after a 1995 study suggested that lycopene in tomatoes could lower the risk of prostate cancer, H.J. Heinz and other tomato processors funded a group called the Tomato Research Council to spread the word. Last year the council co-sponsored a high-profile scientific meeting in New York on lycopene; soon after, a burst of lycopene stories appeared in the New York Times and other newspapers.
A rage for zinc, which purportedly boosts immune function, is upon us--there's even zinc-fortified chewing gum. And fiber's coming back after a lull: The FDA recently approved food-package health claims for certain sources of it, and the latest studies funded by Kellogg and Quaker Oats suggest that their high-fiber cereals offer a bounty of benefits--antioxidants in oats may even help prevent sore muscles after heavy workouts.
Arguably the most exciting phytochemicals moving onto consumers' radar screens are isoflavones. Found mainly in soybeans, they promise a uniquely broad array of benefits: cutting cholesterol better than low-fat diets alone can; preventing post-menopausal bone loss and hot flashes; lowering the risk of prostate, breast, and other major cancers. For some 25 years, PTI has quietly aided researchers studying such benefits. With Du Pont behind it, the company has set its sights on a big prize: winning federal approval for health claims on packages of foods containing its isoflavone-rich isolates. If such claims are allowed, says Stephen Potter, Du Pont's director of agriculture business development, "the $1.5 billion we paid for PTI will look like chump change."
As with most phytochemicals, the science on isoflavones isn't soup yet--at least, not the kind nutrition experts will readily swallow. Indeed, it seems there's a kind of catch-22 plaguing efforts to firmly establish the benefits of various phytochemicals: To nail down the good effects generally requires extracting the chemicals from foods, so they can be administered like drugs in carefully controlled clinical trials. But the compounds' magic often fades when they're extracted. In a classic case, reported in 1994, researchers found that longtime smokers in Finland who took supplements of beta carotene, an antioxidant found in vegetables that have widely accepted anticancer effects, had a higher risk of lung cancer than smokers who didn't take the supplements.
"Nutrition is the interplay of many things in foods," says Walter Glinsmann, a Washington, D.C., consultant and former chief of clinical nutrition at the FDA. "You can't easily re-create that complexity" with extracts.
That's a canon in nutrition science, and the FDA has sternly defended it since Congress drew a line between food and drugs in the 1938 act that created the agency. In practice, that meant makers of foods and dietary supplements couldn't cross the line and tout health benefits on their packages without proving safety and efficacy in clinical trials--the daunting hurdle drugmakers must jump. But since the age of Aquarius, waves of change have washed over the FDA's line in the sand, expediting the age of nutraceuticals.
It began in 1976, when Congress passed a law prohibiting the agency from limiting the potencies of vitamins and minerals. Then the National Cancer Institute collaborated with Kellogg in 1984 to put the first health claim on a mainstream food, All-Bran, without consulting the FDA: Citing the NCI, All-Bran packages claimed high-fiber foods may lower the risk of certain cancers. FDA officials were furious, says an NCI official, "but they wouldn't take action against Kellogg because of the 'hee-haw factor.' They knew people would laugh if they insisted All-Bran be proved safe and efficacious."
Congress finally created a legal basis for such claims with the 1990 Nutrition Labeling and Education Act--it blurred the FDA's cherished line by requiring foodmakers to show "significant scientific agreement" about their claims rather than to prove safety and efficacy. But the FDA got the last laugh--it interpreted the law so strictly that only 11 cautiously worded claims have passed muster so far. An example: "Diets low in sodium may reduce the risk of high blood pressure, a disease associated with many factors."
In 1994, Congress returned with a bulldozer, passing a law that allows purveyors of dietary supplements to tout their products' purported benefits on packages without seeking FDA approval. While the law forbids claiming that supplements can treat diseases, it set off an explosion of claims linking phytochemicals to good health--often with little scientific support. "Now the FDA has virtually no teeth" in the supplements area, says Stephen DeFelice, who coined the word "nutraceuticals" and established the Foundation for Innovation in Medicine, Cranford, N.J., a nonprofit group that promotes natural remedies.
Still, functional-food players are keenly aware that hype about their products' benefits could backfire. And the FDA retains a firm grip on food claims. After submitting a quarter-century of studies on oat fiber's ability to lower cholesterol to the FDA a few years ago, Quaker Oats failed to win approval to make a heart-health claim. The agency finally yielded last year after Quaker marshaled more data; in all, it needed 37 clinical trials to win FDA approval, says Steven Ink, Quaker's nutrition research director.
Life-science players are betting the farm that we'll pay handsomely for their brave new health foods, and they know FDA-approved claims may be necessary to make the bet pay off. Not that they think putting claims on packages will win us over. Rather, they know we listen to doctors, who, in turn, believe the FDA when it allows there's decisive data on a food issue. Says PTI's Coco: "If you have the data, you can make the sale."
Getting definitive data is notoriously difficult. Establishing how diet affects diseases that develop over many years requires long-term research, and given all the things we eat, that usually rules out obtaining clear-cut statistics in clinical studies with a placebo control group. That's why Quaker needed three decades of research to make its case.
This raises a serious financial issue: How can life-science players afford the daunting costs of long clinical studies on nutrition, given that natural substances in food generally aren't patentable? Indeed, after Quaker finally won FDA approval for the oat claim, General Mills quickly cashed in as a free rider by trumpeting the oat fiber in its Cheerios.
A remarkable ploy by Campbell Soup shows just how vexing this conundrum is: The company sought and last year won an unprecedented U.S. patent on the design of clinical trials that it had devised to prove the health benefits of a new line of frozen foods called Intelligent Quisine. In principle, the patent would let Campbell block copycats of its strategy for emulating the drug industry's modus operandi. But the estimated $50 million project fizzled; last spring the company killed the new line after test-marketing it in Ohio and finding that people aren't ready to commit to three frozen meals a day.
But what if a potent health food, scrutinized in hundreds of studies and protected by manufacturing patents, could be stirred into all kinds of yummy eats that already are big sellers? That's the vision that gripped Du Pont's Chad Holliday when he sat down last year with PTI's Ed Coco to talk beans.
PTI had become a hot property. For years it had kept a low profile, hoping competitors wouldn't notice how its isolates business was taking off and horn in. (The company is still almost invisible --its headquarters is identified out front as the home of Continental Baking Co., a former Ralston unit.) But as the life-science revolution took shape, Coco envisioned the little soy miller coming out of the closet and marching boldly forward, linked arm-in-arm with the movement's leaders.
Coco, 56, didn't have to go far to start realizing his dream--he proposed a joint venture with St. Louis-based Monsanto, which owned Kelco, a maker of food thickeners that he envisioned helping PTI stir up novel products. Coco brought a showman's touch to his pitch--after starting dancing lessons at age 2 (his Italian-immigrant parents pictured him as a prancing Frank Sinatra, he says), he stuck with it long enough to turn pro, earning college money as a tap dancer. But at Princeton he studied chemistry, then hung up his shoes to pursue corporate gigs that led to PTI. His parents' hopes haven't entirely faded--Coco is a song-and-dance man with the Ambassadors of Harmony, the world's No. 3-ranked barbershop chorus.
Monsanto executives were so beguiled by the pitch that they came to Ralston with a bid to add Coco and his soy savants to their growing life-science team. But when Du Pont got wind of Monsanto's overture to buy PTI, it jumped in with the bold bid that baffled Wall Street--and that Ralston couldn't refuse.
Coco pushed for the sale to Du Pont, for it had three things he badly wanted: a lead in the race to manipulate soybean genes that control taste and other traits of interest for functional foods; a large ag-products group to field new soy strains; and a pharmaceuticals arm that could help PTI establish the benefits of its soy isolates and get them recognized by medical leaders. "Ralston was a good parent," says Coco, recently named PTI's president. "But it didn't have the right mindset for far-reaching research."
Indeed, the time seems ripe for investing serious money in clinical tests of soy's benefits. Researchers have long suspected there's something special about soybeans, partly because Asians have enviably low rates of heart disease and cancer--Japan's death rates from breast and prostate tumors are a fourth those of the U.S. Of course, many things could account for that besides the fact that Asians eat a lot of soy foods, such as the relatively little fat in their diets. But excitement about soy's role in warding off disease began to build in the mid-1980s, following the mysterious case of the dying cheetahs.
For years, cheetahs in North American zoos had suffered from a baffling syndrome. Its worst symptom was a potentially fatal liver problem. But the animals were also threatened with slow extinction: The disease rendered females infertile.
The mystery was unraveled when a team led by Kenneth Setchell, a researcher at Children's Hospital in Cincinnati, analyzed the cats' standard zoo food and found isoflavones. Isoflavones in a kind of clover were known as "weak estrogens" from studies in the 1940s--Australian sheep had sickened after eating the clover and getting massive doses of the hormone-like chemicals. Cheetahs are highly vulnerable to isoflavones because they lack an enzyme, found in humans and other animals, for deactivating them. Thus, the toxicity wasn't too surprising. But the source of isoflavones eaten by the cats was riveting: The researchers found the compounds had come from soy protein added to their food as a kind of hamburger helper.
"When I heard that, I thought, 'Oh, my God, what happens to people who eat lots of soy?' " says Stephen Barnes, a University of Alabama researcher who studies the role of estrogen in breast cancer. Joining forces with Setchell, Barnes fed soy foods to rats and exposed them to chemicals known to induce mammary tumors. The results were electrifying: The animals developed about half as many tumors as a control group that didn't get soy.
Just why that happens still isn't clear, says Barnes. One theory is that the main soy isoflavone, called genistein, sticks to the same cellular molecules that estrogen does and crowds it out as it tries to perform functions such as triggering cells to multiply--which they madly do in tumors. In 1986, Japanese researchers discovered that genistein also blocks a key cellular enzyme that's thought to act like fertilizer for tumors. That prompted a flurry of test-tube studies showing that genistein inhibits growth of prostate, breast, colon, and other cancer cells.
Intrigued by Barnes' study, National Cancer Institute officials in 1990 launched a $3 million research program to study soybeans' anticancer effects. They planned to focus on genistein. Taking a cue from Barnes, who had obtained soy derivatives from PTI, they asked the St. Louis company to supply genistein for the studies. PTI made a clever counteroffer: It would provide free isoflavones to NCI researchers. But not genistein, a natural substance that it couldn't patent. Instead, the freebie would consist of PTI's proprietary isoflavone concentrates, which could be used to administer specified doses of genistein.
The gambit worked, and since then a mound of data has piled up on the anticancer effects of PTI's proprietary products. More is on the way, including the NCI's clinical trial on soy and prostate cancer, and studies on whether isoflavones can help prevent breast cancer in women. PTI also has supplied its powdered protein for a raft of pioneering studies on heart disease, osteoporosis, and other disorders.
Soy's strongest suit so far is its ability to lower cholesterol (see sidebar). In studies at the Bowman Gray School of Medicine in Winston-Salem, N.C., researchers have found that substituting PTI's isolates for other dietary sources of protein significantly cuts LDL, the bad cholesterol. Importantly, research subjects who ate soy consumed the same amount of fat as control groups did, suggesting that the benefits aren't simply due to lower fat intake. In 1995 the New England Journal of Medicine stirred excitement about soy by publishing an analysis by University of Kentucky researchers of 38 clinical studies on soy--the bottom line was that cholesterol levels dropped on average 9% among people who ate lots of soy protein.
A new chapter is also opening in the soy vs. osteoporosis story. In two preliminary studies, researchers have found that daily doses of PTI's isolates seemed to arrest the rapid bone loss in women that normally follows menopause--the effects were similar to those of taking estrogen pills. In one of the studies, which lasted six months, "we basically didn't see any bone loss" in menopausal women who ate the isolates, says D. Lee Alekel, an Iowa State University nutritionist. Caution: Longer studies are needed to show that soy can sustain "high quality" bone that resists fracturing as women age.
It will probably be years, if ever, before doctors start telling us to take our isoflavones every day. Among other things, the possible toxic effects of ingesting large amounts of the hormone-like substances must be thoroughly vetted. Moreover, isoflavones may lose their magic when extracted from soy proteins--in a study reminiscent of the shocker on Finnish smokers who took beta carotene, Australian researchers reported last year that taking isoflavone pills didn't lower middle-aged women's blood levels of LDL.
But such pills already are popping up in health-food stores. So far, PTI has shied away from selling them--Coco says the company is investigating that option, but its protein isolates have stronger scientific standing. Says PTI senior vice president Doyle Waggle: "Which would you rather take: extracts that haven't been studied or protein isolates shown to work in clinical trials?"
To win over the medical establishment, PTI will have to contend with skeptics like Mark Messina, a former NCI nutritionist who led the agency's soy research and is now a consultant in Port Townsend, Wash. Like many experts, he argues that the only sure way to get all of soy's possible benefits is to eat lots of tofu and other "whole soybean" foods. (It should be noted that Messina consults with ADM, which makes ingredients for such foods.)
PTI's chief nutritionist, E.C. Henley, a quietly formidable woman who seems like June Cleaver with a Ph.D. (Coco jokes that no one at PTI has ever found out what E.C. stands for), counters with gentle suasion: "Mark and I are both vegetarians, so we agree on a lot of things. It is true that there are no foods that are magic bullets. But unlike PTI's isolates, foods like tofu add significant fat and calories to a person's diet, as well as a beany taste many people don't like."
Besides, adds Henley, isoflavone levels tend to vary a lot in soy-based foods. In contrast, PTI offers isolates with controlled isoflavone levels--a feature that may prove critical in its efforts to win FDA approval to make health claims. Listening to Henley build the case for such claims--which may turn out to be one of the first home runs in the life-science game--tends to elevate Du Pont executives' heart rates. But probably not their cholesterol: Landgraf, Du Pont's life-science chief, says that after hearing her lecture on clinical results with soy, he and colleagues immediately began taking PTI's isolates every day.