Selva Perspective: MAHA
The below is taken from Selva Ventures’ Q3 2024 Quarterly Investor Letter
The November 2024 election results may have a large and long-term impact on the health & wellness industry. When Robert F. Kennedy Jr. suspended his campaign in August and endorsed Donald Trump, he did so with a new tagline: ‘Make America Healthy Again’ (or ‘MAHA’).
Much of the criticism of RFK and his movement relate to his controversial comments surrounding vaccines (which we won’t get into here). Lately, however, more discussion has covered the chronic disease crisis facing the USA and the movement’s aggressive stance against providers of ultraprocessed foods and the regulatory bodies that oversee and subsidize CPG products.
Resources
Brother-sister health advocates Calley and Casey Means have been on an active press tour building awareness for the chronic disease crisis. They have emerged as key policy-makers for the MAHA movement and RFK.
Errol Schweizer runs one of the most prominent food industry Substacks. In this piece he articulates the urgency of the chronic disease crisis but why he thinks the Trump administration is not the team to solve it.
Selva Perspective
Madeline Kaplan: Over the past 50 years, the United States food industry has undergone a dramatic change driven by the rise of hyper-palatable, ultra-processed foods. Major food companies shifted their focus to make products highly addictive, a trend that began when tobacco companies, under scrutiny for their harmful products, diversified by acquiring food companies. Today, nearly 70% of the food consumed in the United States is classified as ultra-processed. Big food companies have profited by offering addictive, low-nutrient products, leaving consumers to bear the long-term consequences.
The rate of chronic diseases has similarly increased over the same period of time. Today, over half of the U.S. population is affected by at least one chronic condition, more than 38 million people live with diabetes, and the childhood obesity rate has tripled since 1970. A staggering 75% of healthcare costs are allocated to managing chronic conditions. The long-term healthcare costs to treat these conditions far outweigh the cost of prioritizing a healthy diet. I hope these foods will soon be regarded with the same negative sentiment as tobacco, with a clear understanding that the true cost of their consumption extends far beyond their price tag.
Kiva Dickinson: The need to address the chronic disease crisis in America is one of the few things agreed across the political aisle. Right now, 73% of US adults and 35% of children are overweight or obese, while 1,600 Americans die daily from chronic diet-related illness. These numbers are not only a problem for those affected by the conditions. This is an economic issue, with over $1 trillion spent annually to treat chronic disease (disproportionately borne by Medicare and Medicaid) and more in lost productivity. It is also a national security issue, with the Pentagon reporting 77% of young adults unfit to serve in the military, with obesity being the largest driver.
In the eye of ‘MAHA’, the largest culprits in this crisis are the manufacturers of ultraprocessed foods, most notably snacks and beverages filled with sugar and engineered to be addictive. These products externalize their true cost to the healthcare system and taxpayer, but these costs are starting to be better understood. I expect real policy changes in the coming years, likely beginning with distancing from some of the large CPG lobbying efforts and restricting the presence of ultraprocessed foods in programs like SNAP (food stamps).
In the long run, growth and margin headwinds to the core product portfolio of large CPG should accelerate the process of divestitures of unhealthy brands and acquisitions of better for you products to better align with a more conscious consumer. The overhaul to the regulatory incentive structure will take years; in the meantime we’ll be closely watching the alliance between Trump and RFK to see whether the two can see certain past ideological differences to pursue this agenda.
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