As you may have heard, a committee of the U.N.’s World Health Organization announced on Monday that processed meat causes cancer. This wasn’t the typical announcement of a new research study saying this or that “may contribute to” some health problem or “is correlated with” some nasty effect, and “further research is needed.” The WHO says processed meats—hot dogs, bacon, sausage, ham, deli meats—are carcinogens. They cause cancer, period. Like cigarettes. “Each 50-gram [1.8-ounce] portion of processed meat eaten daily increases the risk of colorectal cancer by 18%,” the panel says flatly.
We’ll now see how meat producers respond to this potential industry crisis. Especially revealing will be the reactions of the four huge companies that dominate the U.S. meat business: Arkansas-based Tyson Foods, led by CEO Donnie Smith; the Brazilian company JBS, led by CEO Andre Nogueira; Cargill, America’s largest private company, led by CEO David MacLennan; and WH Group, led by chairman Wan Long, which owns America’s largest pork producer, Smithfield Foods (U.S. chief: Larry Pope). Watch specifically for answers to three key questions:
Will they respond tactically or strategically?
It’s unclear for now whether the WHO report will even affect U.S. consumption of processed meat. The very idea of Americans giving up bacon and hot dogs may turn out to be preposterous, no matter what some U.N. agency says. Even if consumption dips, the producers may just cut prices and hope the whole affair blows over. And, who knows, maybe that will happen. But longer term, the tactical response will almost certainly be insufficient.
To read the rest of the story, please go to: Fortune