How did it all begin?

It was one of those things that crept up on us and we still can't quite believe it happened. Looking back, we'd been in denial for some time. Then a friend who hadn't seen the family for a while came round and blurted out the bald truth. 'God, Dodi's got rather fat. In fact, you know, I think that might count as obese.'

Once said, it had to be admitted. If you looked at Dodi from behind when he was sitting down, you could see a substantial spare tyre around his thirteen-year-old middle. It bulged out from his hips and flopped down like a muffin rising up and out over its baking case. He had become quite lazy too, preferring to lounge in front of the fire rather than play in the garden as he used to. His excess weight was slowing him down.

He had been hooked on a particular brand of instant meal for ages.

Guaranteed real tuna, the packaging said. Enriched with omega-3 and -6 fats! The small print told another story. What was inside was largely byproducts from other industrial processing: rendered poultry meal mixed with fillers of corn gluten meal, ground rice, soya oil and dried beet pulp.

Dodi is our cat, and we know cats do not normally eat carbohydrates such as ground rice or sugar nor corn nor vegetables oils. Nevertheless that's what we had been feeding him. It said on the packets that it was 'scientifically formulated' after all.

The absurdity of feeding an animal types of waste it never evolved to eat that actually makes it fat and sick ought to be easy enough to see. But we have not apparently been alone in our blindness – feline diabetes has risen dramatically in the last few years in the UK.

Where the human diet is concerned a similar myopia seems to have descended upon the British. Instead of relying on a food culture developed over centuries, we have come to defer top the pseudo-scientific instructions of professionals and marketeers.

Where did it all go wrong?

The rise of breakfast cereal makes a revealing case study in the evolutionary process behind the modern diet. One of the earliest convenience foods, processed cereals represents a triumph of marketing, packaging and US economic and foreign policy. They are the epitome of cheap commodity converted by manufacturing to higher value goods; of agricultural surplus turned into profitable export. Their ingredients have a disconcerting overlap with my cat food. Somehow they have wormed into our confused consciousness as intrinsically healthy when by and large they are degraded foods that have to have any goodness artificially restored. I have long been intrigued by how the British breakfast was conquered and what it tells us about the rest of our food. For this is the elephant in the room of course: it is the industrial processing of food that is the real problem. To understand where not we, but rather it, all went wrong, you have to understand the economic and political structures behind today's food system.

The transformation of the British breakfast in the last 100 years has been complete. Unlike our European partners we have succumbed almost entirely to the American invention. A century ago simple cereal grains, cooked either as porridge or bread, were the staples of breakfast around the world and in this country too, just as they had been in previous centuries.

When the first National Food Survey was conducted on behalf of the medical officer of the Privy Council, Sir John Simon, in 1863 it questioned 370 families of the 'labouring poor' and found that breakfast consisted variously of tea kettle broth (bread soaked in hot milk and salt), bread and butter, bread and cheese, milk gruel, bread and water and oatmeal and milk porridge. Today, instead, the British and the Irish are the largest eaters of puffed, flaked, flavoured, shaped, sugared, salted and extruded cereals in the world. We munch an average of 6.7kg of the dehydrated stuff per person in the UK and 8.4kg each in Ireland.

The Mediterraneans, generally credited with a healthy diet, have so far kept this form of instant breakfast down to an average one kilo per person per year. The French, those cheese-eating surrender monkeys of American opprobrium, have proved culturally resistant to transatlantic pressure in this as in other fields. While the Eastern Europeans, deprived of marketing until the fall of the communism and the break up of the Soviet Union, have barely heard of processed cereals yet, being capable of getting through the first meal of the day with no apparent anxiety and only a few grams a year between them.

How can such a radical overhaul of a food culture come about and was there something peculiarly susceptible about the British and the Americans that led to it?

To find out, I went to the US, to the Mid-West states that are the heartland of industrial corn production and to the home of the first cornflakes, to try to understand something of the history and economics of the cereal business.

Prepackaged and ready-to-eat breakfast cereals began with the American temperance movement in the nineteenth century. In the 1830s, the Reverend Sylvester Graham preached the virtues of a vegetarian diet to his congregation and in particular the importance of wholemeal flour. Meat-eating, he said, excited the carnal passions. Granula considered the first ready-to-eat breakfast cereal, was developed from his 'Graham flour' by one of his followers, James Caleb Jackson, for patients at the latter's water cure resort. It was a baked lump of slow-cooked wheat and water that was said to be hard as rock and had to be broken up and soaked overnight to be edible. It was sold at ten times the cost of its ingredients. The business motive for proselytizing by breakfast cereal was established.

Following on from Jackson, the Seventh Day Adventists took up the mission begun by Graham. A colony of them had set up in a small town called Battle Creek near the American Great Lakes in Michigan. There they established the Western Health Reform Institute in 1866 to cure hog guzzling and to their mind degenerate Americans of their dyspepsia and vices. John Harvey Kellogg turned it into the famous Battle Creek Sanatarium, a curious but money-spinning mix of health spa, holiday camp and experimental hospital. Kellogg, a sort of early cross between Billy Graham and Gillian McKeith, set about devising cures for what he believed were the common ills of the day, in particular constipation and masturbation. In Kellogg's mind the two were closely linked, the common cause being a lack of fibre, both dietary and moral.

As well as prescribing daily cold water baths, exercise drills, and unorthodox medical interventions, creating health-giving foods for patients was a major preoccupation. Kellogg, his wife and his younger brother William Keith experimented in the Sanatarium kitchen to produce an easily digested form of cereal. They came up with their own highly profitable Granula, but were promptly sued by Jackson, the original maker of Granula, and had to change the name to Granola. Victorian prudery and religion may have been at the root of processed cereal development, but parables about camels and eyes of needles did not discourage any of these evangelicals from seeing the commercial advantage and using the law to protect their business interests.

Around this time an entrepreneur called Henry Perky had also invented a way of passing steamed wheat through rollers, one grooved and one smooth, to form strands that could be pressed into biscuits to make the first shredded wheat. JH Kellogg experimented further with his team and eventually they found a way of rolling cooked wheat to make flakes which could then be baked. Cornflakes followed when the Kelloggs worked out how to use cheap American corn instead of wheat, although initially they had problems keeping them crisp and preventing them from going rancid. This great leap forward is of a piece with other major developments in the industrialization of our diets: it is usually the combination of technological advances and the right economic conditions that lead to radical changes in what we eat.

It was a chronically dyspeptic businessman and former patient of Kellogg's at the Sanatarium who unleashed the power of marketing on breakfast. Charles Post set up the rival La Vita Inn in Battle Creek and developed his own versions of precooked cereals. He distributed them with such encouraging tracts as The Road to Wellville. 'The sunshine that makes a business plant grow is advertizing,' he declared. He placed ads for his cereals in papers with paid-for testimonials from apparently genuine happy eaters. He also cheerfully invented diseases which his products could cure. His Grape Nuts were miraculously not only 'brain food' but could also cure consumption and malaria, and were even, despite their enamel-cracking hardness, said to be an antidote to loose teeth.

By 1903 Battle Creek had turned into a cereal Klondike. At one point there were over 100 cereal factories operating in the town to satisfy the new craze, many making fabulously exaggerated claims about the health benefits of their products. This symbiotic relationship between sales, health claims and the promotion of packaged breakfast cereals has continued ever since. Nor was it a coincidence that this particular Klondike sprang up in the American Mid-West, whose vast tracts of virgin land had been recently opened up by settlers and turned over to the agricultural production that powered US development.

The Kelloggs had tried unsuccessfully to protect their flaking process with patents. When WK saw how much others were making from the new foods, he launched his own advertizing campaign, giving away free samples and putting ads in newspapers.

The road to nutritional corruption opened up early. The Kellogg brothers argued over whether to make the cereals more palatable by adding sugar – the addition was anathema to John who saw sugar as an adulterant and a scourge, but William reckoned it was needed to stop the products tasting like 'horse-food'. WK won.

Global expansion followed quickly. Britain saw its first cornflakes in 1924 when the company set up offices in London and used unemployed men and boy scouts to act as a sales force for the imported cereal which was shipped in from Canada. By 1936 UK sales topped £1 million, and Kellogg's was ready to open its first British manufacturing plant in Manchester in 1938.

The technology used to make industrial quantities of breakfast cereal today is essentially the same as that developed from the kitchen experiments of those fundamentalist healers, although new ways have been found to add the sugar, salt and flavourings.

Cornflakes are generally made by breaking corn kernels into smaller grits which are then steam cooked in batches of up to a tonne under pressure of about 20lbs per square inch. The nutritious germ with its essential fats is first removed because, as the Kellogg brothers discovered all that time ago, it goes rancid over time and gets in the way of long shelf life. Flavourings, vitamins to replace those lost in processing and sugar may be added at this stage. It then takes four hours and vast amounts of energy to drive the steam out of the cooked grits before they can be rolled by giant rollers into flakes.

Steamed wheat biscuits such as shredded wheats are made with whole wheat grains which are pressure cooked with water. They are then passed between rollers which squeeze them into strands and build them up into layers. These processes begin the breakdown of the raw starches in the cereals so even though they are whole grains they are absorbed more quickly in the body – and they typically have glycemic index scores of around 75, close to the GIs in the high 70s or low 80s of cornflakes, Bran Flakes, Special K and Rice Krispies, compared with 45/46 for minimally-processed grains such as porridge or mueslis without sugar. (Glucose has a GI of 100 and is what these indexes measure other foods against. They indicate how fast different foods are converted to glucose and absorbed into the bloodstream.)

Worries about the nutritional value of such highly processed grains surfaced early. Post's company was one of the first to begin the heavy duty pre-sweetening of cereals with sugar coating in the late 1940s. The sales were enviable. The Kellogg company however held back, according to interviews with former employees in Cerealizing America, the highly entertaining account of cereal history by Scott Bruce and Bill Crawford. The charitable Kellogg Foundation which had been set up by then to promote children's health and education was a major shareholder and was concerned that flogging sugar-coatings to the young might not be compatible with its purpose.

Many of the health benefits claimed for breakfast cereals depended on fortification rather than micronutrients from the raw ingredients, most of which were either destroyed by the process or stripped away before it. The earliest fortification was with vitamin D, the so-called sunshine vitamin, and acted as a marketing tool. Today a new wave of fortification is coming, and once again its principal purpose is marketing. Inulin, a form of fibre from plants, known to the food industry until recently as a cheap bulking agent thanks to its ability to retain water and mimic the mouthfeel of fats, is now added as a 'prebiotic'. They have coined this word for it because it resists digestion in the upper gastrointestinal tract and reaches the large intestine almost intact where it is fermented by bacteria, encouraging the production of friendly microflora, which the industry markets too, as probiotics. The inulin, in other words, does what the fibre naturally occurring in whole grains would do if it hadn't been stripped out by over processing.

Companies are also looking at adding omega-3 fatty acids such as DHA. (Where my cat food goes, breakfast cereals follow.) There are technical difficulties with this. Since the DHA tends to come from fish, it makes things taste fishy, and its flavour has to be masked with other additives.

That processed cereals had become little more than sugary junk with milk and vitamin pills added, was an accusation made as long ago as the 1970s. A US congressional hearing in 1970 was told by an adviser to President Nixon on nutrition, Robert Choate, that the majority of breakfast cereals 'fatten but do little to prevent malnutrition'. Choate was outraged at the aggressive targeting of children in breakfast cereal advertizing. He analysed sixty well-known cereal brands for nutritional quality and concluded that two thirds of them offered 'empty calories, a term thus far applied to alcohol and sugar'. Rats fed a diet of ground-up cereal boxes with sugar, milk and raisins were healthier than rats fed the cereals themselves, he testified to senators.

Battle Creek today is a small backwater in Michigan three hours drive from Chicago. There is not much sign now of the cereal gold rush that changed the British palate, and the flake factories working day and night have mostly gone. But the legacy lives on. In their place alongside Kellogg airport and the Kellogg Foundation is Kellogg's Cereal City. Built in the shape of an old American grain store, it is a museum testament to the power of marketing that so maddened Choate. Walking through the collection I too was struck by how much our breakfast today is the child of advertizing. Trading on our insecurity about health, manipulating our emotions and selling to us through health professionals has always been part of the great puff.

The antique cardboard boxes on show underline how from the first breakfast cereals sold not just a meal but a way of life: Power, Vim, Vigor, Korn Kinks and Climax cereal are among the early brand names. One of my favourite sections of the museum was the cabinet of boxes and pamphlets recording the original health claims that anticipate today's persuasive messages. 'Keeps the blood cool!' 'Makes red blood redder!' There were the cereals that echoed today's claims for prebiotics, 'Will correct stomach troubles!' or indeed the claims on my cat food, 'The most scientific food in the world!'

Getting children hooked, making them associate breakfast cereal with fun and entertainment, blurring the lines between advertizing and programmes, exploiting new media – today it is the internet and viral marketing – was one of the main aims of competing manufacturers from the early days, as the museum displays show, and a crucial part in conquering the British breakfast. Kellogg's sponsored a children's programme called 'The Singing Lady'. In 1931 the artist Vernon Grant heard the programme and was inspired to draw the Kellogg's Rice Krispie ad characters Snap, Crackle and Pop. His cartoon characters were used in ad campaigns that catapulted Rice Krispie sales up into the league of the more established cornflakes brands. Walt Disney was powerfully influenced by Grant's work. And when the Great Depression hit America in the 1930s following the crash of the stock market, WK Kellogg doubled his ad spend.

In 1939 Charles Post meanwhile introduced his own characters, a trio of bears, to sell his new Sugar Crisps. (The original three bears were of course happy with plain porridge.) Kellogg's responded with Tony the Tiger and Katy the Kangaroo, although Katy retired after a year. Post also bought a licence from Disney to use his Mickey Mouse character on his cereal boxes.

The museum records how giveaway toys were being used by then too, to attract children's loyalty and to encourage early pester power and repeat purchases.

Cereal advertizing likewise helped shape early television. A chance meeting on a train in 1949 between the then chairman of Kellogg's and an advertizing man called Leo Burnett led to a working relationship that both transformed the cereal market and made the mould for TV ads. Burnett used 'motivational research' to work out how to appeal to women and children with different kinds of packaging. Subliminal marketing was born. With his help Kellogg's broadcast the first colour TV programmes and commercials for children. The result was that by the mid 1950s the company had captured nearly half the rapidly expanding US processed cereal market and was in a prime position to build its empire in Europe using the same methods.

The UK market for those cereal boxes was worth over £1.27 billion in 2005. It too has been created and maintained by advertizing. It is characterized by health claims, now as then. Along with other highly processed foods such as fizzy drinks, and fast food brands, breakfast cereals are among the most highly marketed products.

Kellogg's has consistently been the largest advertizer of its cereals in this country, spending roughly £50 million a year in recent years, about twice what its rival Cereal Partners spends. Cereal Partners is a joint venture with Nestlé which markets that company's breakfast cereals in Britain and manufactures cereals for leading supermarkets' own label brands. The respective investments are duly reflected in the companies' market shares. We buy what we have been persuaded to buy.

Without advertizing we might never know we needed processed cereal and revert to porridge or bread instead. Or as Kellogg's European president Tim Mobsby put it to MPs conducting an inquiry into obesity in 2004, 'if we were not to have that capability [of TV advertizing] there is a probability that the consumption of cereals would actually drop…that is not necessarily a positive step forward.'

The following spring I was one of a handful of reporters flown in a private jet by Kellogg's to its Old Trafford cornflakes factory, as part of its campaign to protect its portfolio and its ability to market it, particularly to children. The ostensible reason for the trip was that Kellogg's was launching a new acquisition in the UK, Kashi, a brand of mixed-grain puffed cereal free of all additives. But criticism of the food industry for selling obeso-genic products high in fat, salt and sugar had reached a crescendo in the UK and the breakfast cereal manufacturers were the subject of unwelcome attention. Before touring the factory, we were ushered past the giant Tony the Tiger cut-out in the entrance lobby and up into the strategic planning department for a presentation on nutrition policy and labelling.

Here the company nutritionist explained how Kellogg's had decided to take a lead in promoting a new kind of labelling to help 'mum' make 'healthier choices'. Rather than the traffic light labelling the government's food standards agency was researching, Kellogg's and other leading food manufacturers had decided to go live with a system of labels based on guideline daily amounts. These would avoid identifying foods as good or bad with red, amber and green and instead give figures for how much fat, salt and sugar a portion of the product contained as a proportion of a guideline amount, calculated by the industry, which you should eat a day of those nutrients. Needless to say the industry's guideline daily amounts were more generous than official targets, particularly on sugars. The FSA had already rejected this scheme as too complicated to be helpful but Kellogg's told us that it had 'lent them one of our researchers so we've been in on the consultation process and we've been able to get the GDAs into the final FSA testing'.

In response to pressure from the FSA, the Association of Cereal Food Manufacturers had already reduced salt by a quarter in five years, she went on. Cornflakes were even tastier than before because you could taste the corn more now. So why was there so much salt in the first place, we asked. The managing director of Kellogg's Europe Tony Palmer confessed that 'if we'd known you could take out 25 per cent of the salt and make cornflakes taste even better, we would have done it earlier. But it's also about the interaction with the sugar – as you take the salt out, you've got to reduce the sugar because it starts to taste sweeter.' But isn't the target to reduce sugar consumption too? Why not just cut down on salt and sugar, we wondered. Well, sugar helps keep the crispness and is part of the bulk, so that would be difficult, we were told. Mr Palmer's eyebrows started working furiously as he answered: 'And the risk is, if you take the salt out you might be better off eating the cardboard carton for taste,' he said.

The public relations team moved us rapidly on from this unfortunate echo of Senator Choate's 1970s' accusation of nutritional bankruptcy to a presentation on the Kashi Way. 'We hold the spirit of health in all we do,' one of them explained, echoing this time the quasi-religious marketing babble of the founding cereal makers.

Although I was aware that breakfast cereal manufacturers were among the top marketers of processed foods in the UK, it was only when the broadcasting regulator Ofcom tried to draw up new rules to restrict TV advertizing to children of junk foods, that I saw quite how dependent consumption was on us being manipulated by the manufacturers' messages. Kellogg's led a ferocious campaign of lobbying to stop the restrictions. As well as educating journalists with trips such as mine to the cornflakes factory, it lobbied MPs, ministers and regulators. One of its public relations agencies Hill and Knowlton boasted on its website how it had managed to change government and Whitehall thinking on Kellogg's behalf. 'A series of meetings with Number 10, the Department of Health, the Food Standards Agency, the Health Select committee, one-to-one briefings with key individuals and an event for parliamentarians' had enabled them to disseminate Kellogg's messages, with the result that 'the campaign resulted in a significant shift in attitudes among core government stakeholders,' they claimed.

The industry is adamant that its products are a healthy way to start the day, and has recruited Professor Tom Sanders, head of the nutrition department at King's College London, to defend 'breakfast cereals served with semi-skimmed milk' as 'low energy meals that provide about one fifth of the micronutrients of children'. However, a survey published by the independent consumer watchdog Which? called 'Cereal Reoffenders' took a rather different view. When it analysed 275 big-name breakfast cereals from leading manufacturers on sale in UK supermarkets in 2006 it found that 75 per cent of them had high levels of sugar, while almost a fifth had high levels of salt, according to criteria drawn up by the food standards agency for its traffic light nutritional labels. Nearly 90 per cent of those targeted at children were high in sugar, 13 per cent were high in salt, and 10 per cent were high in saturated fat. Several cereals making claims to be good for you got a red light too. All Bran was high in salt; Special K got a red for sugar and salt. Some high fibre bran cereals were giving you more salt per serving than a bag of crisps. (Some of these may have since been reformulated.)

It was when I saw details of the proposals from Ofcom on restricting marketing of junk foods to children that I understood why the lobbying had been so determined. What became clear was that breakfast cereals, although heavily marketed as healthy, would be the category to take the largest hit by a long way. About £70 million of TV ads a year from cereal manufacturers would be banned because they were promoting what the experts defined as unhealthy. The sector spent a total of £84 million on ads that year. In other words, the vast majority of its marketing effort would be wiped out. It had everything to lose. Because, as the House of Commons had been told, without marketing to manipulate our desires, we might not eat processed cereals at all.

Back at the Battle Creek Museum you can see how Kellogg's would view that. Before exiting the exhibition into the shop, I passed a section on 'global expansion'. 'The company has rededicated itself to reaching 1.5 billion new cereal customers around the world in the next decade…and bringing about a fundamental change in eating habits.' As well as advertizing in new markets, it has been sponsoring school nutrition programmes and health symposia for professionals. This activity is part of a 'massive program of nutrition education directed at improving the world's eating habits with accelerated expansion into countries where ready-to-eat cereal is unknown', it proclaimed.

Improving the world's eating habits has the attraction, as the nineteenth-century American entrepreneurs discovered, of being what economic analysts call a 'high margin to cost business'. The raw materials of breakfast cereals, commodity grains, are cheap (or at least were cheap until biofuels recently entered the equation). US agricultural subsidies totalled $165 billion in the eleven years 1995 to 2005. Just five crops accounted for 90 per cent of the money – corn, rice, wheat, soya beans and cotton. That handful of ingredients I keep finding in everything. If you want to understand why all these commodities, cotton aside, make it not only in to the cat food but in to most other processed foods you eat, this is where you have to start.

One of the biggest costs is not the value of the ingredients, nor the cost of production, but the marketing, which as you might expect from all the activity described above, is typically 20 to 25 per cent of the sales value, according to analysts JP Morgan. About a quarter of your money is going not on the food but on the manufacturer's cost of persuading you to buy it. That still leaves room for gross margins on processed cereals that are 40 to 45 per cent, with profit margins around the very healthy 17 per cent mark.

Start selling this kind of processed diet to new consumers in the booming economies of China and India and your profits, and those of the country that has dominated grain exports and trading, the US, will soar. This is what the food industry calls adding value. The added value is not nutritional value of course; quite the opposite. The added value is shareholder value, and as a very rough rule of thumb I reckon on nutritional value being stripped away in inverse proportion to the shareholder value added.

• Extracted from Eat Your Heart Out: Why the food business is bad for the planet and your health by Felicity Lawrence, published by Penguin. Buy both Felicity Lawrence's books, Eat Your Heart Out (RRP £8.99) and Not on the Label (£9.99) for only £13 (save £5.98) or buy them individually for £7 each. Visit guardianbookshop.co.uk or call 0330 333 6846