It bombards them with adverts, seduces them with merchandise - and then fills them with additives. In an exclusive extract from his explosive new book, Eric Schlosser reveals how the fast-food industry exploits its key audience - the very young

It was strange to see adults behaving this way, especially at a business meeting in south-east Asia. Pain works for KFC and he was trying to get the crowd excited about Yum! Brands, Inc, the company that owns KFC, Pizza Hut and Taco Bell. He was giving a speech about the "Top 10 ways to market to Asian youths of today" at the Youth Marketing Forum 2004 conference. Hundreds of business people had paid thousands of dollars to learn the secrets of how to sell things to children. Sitting in the audience were representatives from McDonald's, Disney, Coca-Cola, Toyota, Nestlé and MTV. A special workshop held the previous day had promised to help companies create "brand preference and loyalty" among children.

"It is all about establishing a relationship early," Paul Kurnit, the president of a marketing firm called KidShop, told the conference on opening day.

The relationship between big companies and small children has changed enormously in the past 30 years. Until recently, just a handful of companies aimed their advertising at children and they mainly sold breakfast cereals and toys. By 2002, however, the top five food advertisers in the UK were McDonald's, Coca-Cola, KFC and Pizza Hut. British food companies now spend £300m every year advertising to kids. Business people now realise that kids have a lot of money to spend and a lot of influence on what their parents buy. Every year in the United States children are responsible for more than $500bn worth of spending. Big companies want that money. And too often they are willing to manipulate kids in order to get it.

Before trying to control children's behaviour, advertisers have to learn what kids like. Today's market researchers not only interview children in shopping malls, they also organise focus groups for children as young as two or three.

At a focus group, kids are paid to sit around and discuss what they like to buy. The idea of creating a squeezable ketchup bottle came from kids in a focus group. Heinz earned millions of dollars from the idea; the kids who thought of it were paid a small amount. Advertisers study children's drawings, hire children to take part in focus groups, pay children to attend sleepover parties and then ask them questions late into the night. Advertisers send researchers into homes, stores, fast food restaurants and other places where kids like to gather. They study the fantasy lives of young children, then apply the findings in advertisements and product designs.

"Children are important because they not only represent a significant percentage of our customers," a Burger King spokesman said, "but they also have an incredible influence on what fast food restaurant their parents will choose."

The latest scientific research is also being used to make kids buy things. At the Singapore conference, Karen Tan, representing Coca-Cola, discussed how to make children remember a company's ads and create "brand stickiness". According to Tan, research has found that one way to make a lasting imprint on a child's mind is to run the same advertisement over and over again. Repeating the same ad for a product is more effective than running a variety of different ads. The more times a child sees exactly the same ad, the more likely he or she will remember the product.

The average American child now spends about 25 hours a week watching television. That adds up to more than 1.5 months, non-stop, of TV every year. And that does not include the time spent in front of a screen watching videos, playing video games or using a computer.

Aside from going to school, American children now spend more time watching television than doing anything else except sleeping. The average British child spends two hours and 20 minutes every day watching television and 25 minutes playing video games. In the UK, more than half of children under the age of 16 have a television in their bedroom.

During the course of a year, the typical American child watches more than 40,000 TV commercials. About 20,000 of those ads are for junk food: soft drinks, sweets, breakfast cereals and fast food. That means American children now see a junk food ad every five minutes while watching TV - and see about three hours of junk food ads every week. American kids aren't learning about food in the classroom. They're being taught what to eat by the same junk food ads, repeating again and again.

Although the fast food chains in the US now spend more than $3bn every year on television advertising, another form of product promotion has proven even more effective. "The key to attracting kids," one marketing publication says, "is toys, toys, toys."

The fast food chains now work closely with leading toy makers, giving away small toys with children's meals and selling larger ones at their restaurants. As part of its Happy Meals programme, McDonald's has worked with Fisher Price to give away Toddler Toys aimed at kids aged one to three. One of the Fisher Price toys was a tiny doll of a McDonald's worker holding a milkshake. Both McDonald's and Burger King have given away Teletubbies dolls. Teletubbies is aimed at children too young to speak.

Children's meals often come with different versions of the same toy so that kids will nag their parents to keep going back to the restaurant to get a complete set. For many hard-working parents, buying a children's meal that includes a free Hot Wheels car, a Simpsons talking watch or a Butt-Ugly Martians doll seems like an easy way to make their kids happy. For the fast food chains, the toys are an easy way of making money. Giving away the right toy can easily double or triple the weekly sales of children's meals. And for every additional child, one or two additional adults are usually being dragged into the restaurant to eat.

"McDonald's is in some ways a toy company, not a food company," says one retired fast food executive. Indeed, McDonald's is perhaps the largest toy company in the world. It sells or gives away more than 1.5 billion toys every year. Almost one out of every three new toys given to American kids each year comes from McDonald's or another fast food chain.

McDonald's Happy Meal toys are manufactured in countries where the prices are low. On the bottom of these toys you often find the phrase "Made in China". Too often the lives of the workers who make Happy Meal toys are anything but happy. In 2000, a reporter for the South China Morning Post visited a factory near Hong Kong. The factory made Snoopy, Winnie the Pooh and Hello Kitty toys for McDonald's Happy Meals. Some of the workers at the factory said they were 14 years old and often worked 16 hours a day. Their wages were less than 20 cents (11p) an hour - almost 30 times less than the lowest amount you can pay an American worker. They slept in small rooms crammed with eight bunk beds without mattresses.

At first, McDonald's said it had seen no evidence that such poor conditions existed at the factory, but later it admitted that some things were wrong there. A few months later, a reporter found that another factory in China that made Happy Meal toys was mistreating its workers. They were working 17 hours a day - and being paid less than 10 cents an hour. McDonald's now tries to ensure that children aren't employed to make its toys. But the company hasn't done much to increase the wages of the workers at Chinese toy factories. Low wages are one of the things that keep Happy Meal toys so cheap.

In fact, low wages are at the heart of the whole enterprise. Danielle Brent is a 17-year-old schoolgirl at Martinsburg High School in West Virginia. On Saturday mornings the alarm in her mobile phone goes off at 5.30am. It's still dark outside as she stumbles into the bathroom, takes a shower, puts on her makeup and gets into her McDonald's uniform. Her father stays in bed, but her mother always comes downstairs to the kitchen and says goodbye before Danielle leaves for work. Sometimes, it's really cold in the morning and it takes a while for the engine of the family's old car to start cranking out heat. There are a lot of other things she would rather be doing early on a Saturday morning - such as sleeping. But like thousands of other American kids of her age, Danielle gets up and goes to work at a fast food restaurant.

When Danielle was a little girl, she loved to eat at McDonald's. Sometimes she would even go there for breakfast, lunch and dinner. When she was 16, a friend suggested that she apply for a job at the McDonald's near Interstate 81. The friend already worked there, classmates of theirs always ate there and working behind the counter sounded like fun.

Danielle soon realised that the job was different from what she had expected. Some of the customers were rude. Workers in the kitchen didn't always wash their hands and didn't care if the food got dirty as a result. Her friend soon quit the job, but Danielle can't afford to do that. She needs the money. A number of kids at school tease her for working so hard at a job that pays so little. Kids who break the law and sell drugs at her high school earn more money in a couple of hours than Danielle earns at McDonald's in a couple of weeks.

Danielle worries about the amount of time she is spending at McDonald's. Sometimes she is there, on school nights, until two in the morning. "At school, I'm really tired, and I can't do my homework a lot," she admits.

Fast food chains often put attractive girls behind the counter to deal with customers, and that's where Danielle works. The first thing she does at the restaurant is log into the cash register, punching the last four digits of her social security number into the touch screen. Then she grabs a cup of coffee to clear her head before the doors open and customers start pouring in. She usually doesn't feel awake until 10 or 11 o'clock, about halfway through her shift. But that grogginess never gets in the way of her job. Danielle thinks she could operate the cash register - as well as most of the other fancy machines - in her sleep.

Fast food kitchens often look like a scene from Bugsy Malone, a movie in which all the actors were children pretending to be adults. No other industry has a workforce so dominated by teens. Teenagers open the fast food outlets in the morning, close them at night and keep them going at all hours in between. Even the managers and assistant managers are sometimes in their teens. Unlike Olympic gymnastics - a sport in which teenagers tend to be better than adults - there is nothing about the work in a fast food kitchen that requires young workers. Instead of relying upon a small, stable, well-paid and well-trained workforce, the fast food industry seeks out part-time, unskilled workers who are willing to accept low pay. Teenagers have long been the perfect candidates for fast food jobs. They usually don't have a family to support. And their youthful inexperience makes them easier to control than adults.

The labour practices of the fast food industry have their origins in the assembly-line systems that were adopted by American factories in the early 20th century. As a result, the fastfood industry has changed the way millions of Americans work and turned restaurant kitchens into little food factories. At Burger King restaurants, frozen hamburger patties are placed on a conveyor belt and come out of a broiler 90 seconds later, fully cooked. The ovens at Pizza Hut and at Domino's often use conveyor belts. The ovens at McDonald's look like commercial laundry presses, with big steel hoods that swing down and grill hamburgers on both sides at once. The burgers, chicken, French fries and buns are all frozen when they arrive at a McDonald's. The shakes and soft drinks begin as syrup. At Taco Bell restaurants, the food is "assembled", not prepared. The avocado dip isn't freshly made by workers in the kitchen; it is made at a gigantic factory in Michoacan, Mexico, then frozen and shipped to the US. The meat at Taco Bell arrives frozen and pre-cooked in vacuum-sealed plastic bags. The beans are dehydrated and look like brownish cornflakes. The cooking process is fairly simple. "Everything's add water," a Taco Bell employee says. "Just add hot water."

In 1958, a McDonald's executive named Fred Turner wrote a training manual for the company that was 75 pages long. It was a book of instructions that described how almost everything had to be done. Hamburgers were always to be placed on the grill in six neat rows; French fries had to be exactly 0.28in (about 8mm) thick. Today, the McDonald's manual has 10 times the number of pages and weighs about 2kg. Known within the company as "The Bible", it tells workers exactly how various appliances should be used, how each item on the menu should look and how customers should be greeted. This is standard practice in the industry.

"Smile with a greeting and make a positive first impression," a Burger King training manual suggests. 'Show them you are GLAD TO SEE THEM. Include eye contact with the cheerful greeting."

The strict rules at fast food restaurants help to create food that always tastes the same. They help workers fill orders quickly. And they give fast food companies an enormous amount of power over workers. When all the knowledge is built into the operating system and the machines in the kitchen, a restaurant no longer needs skilled workers. It just needs people willing to do as they're told. It seeks workers who can easily be hired, fired and replaced.

The rate at which fast food workers quit or are fired is among the highest in the American economy. The typical fast food worker quits or is fired after only three or four months. One of the reasons they leave their jobs so often is that the pay is so low. The fast food industry pays the minimum wage to more of its workers than any other industry in the US. And fast food workers are the largest group of low-income workers in the US today.

Whenever members of Congress try to raise the minimum wage (which in 2006 is only $5.15 (£3) an hour), the fast food industry always fights hard against any increase. And the industry almost always wins. Between 1968 and 1990, the years in which the fast food chains grew at the quickest rate, the real value of the minimum wage fell by almost half. The fast food chains earn large profits as wages fall, because it costs them less money to hire workers.

According to the Oxford English Dictionary, a McJob is a job that's low-paid and offers little opportunity to get ahead. McDonald's isn't happy about that dictionary definition and has publicly complained that it isn't fair to the company. But the dictionaries insist that that's what the word actually means: a McJob is a job that doesn't promise much of a future.

· These are edited excerpts from Chew on This by Eric Schlosser, published on May 25 by Puffin. © Eric Schlosser 2006. To order a copy for £5.99 with free UK p&p go to guardian.co.uk/bookshop or call 0870 836 0875.

The 59 ingredients in a fast-food strawberry milkshake

To make one at home, you need four fresh ingredients. The processed version isn't so simple ...

Britons now spend more than £52bn on food every year - and more than 90% of that money is spent on processed food. But the canning, freezing and dehydrating techniques used to process food destroy most of its flavour. Since the end of the second world war, a vast industry has arisen to make processed food taste good.

During the past two decades the flavour industry's role in food production has become so influential that many children now like man-made flavours more than the real thing. As marketing to children has become more and more important to processed food companies and fast food chains, flavourists have increased their efforts to discover what children like. The flavour companies constantly run "taste tests" for kids - focus groups in which new products are piloted.

Fresh fruit and vegetables often have complicated, unpredictable flavours that combine bitterness with sweetness. When flavourists create additives for adult foods, they try to imitate nature as closely as possible. When flavourists create additives for kids' foods, they usually get rid of the bitterness and increase the sweetness. Children's flavours are often twice as sweet as those made for adults.

"Children's expectation of a strawberry is completely different," says one flavourist. "They want something that is strong and that has something like bubblegum notes."

The phrase "artificial strawberry flavour" offers little hint of the scientific wizardry that can make a highly processed food taste like a strawberry. For example, if you wanted to make a strawberry milkshake at home, here's all you'd need: ice, cream, strawberries, sugar and a touch of vanilla.

Now take a look at the ingredients you might find in a fast-food strawberry milkshake: milkfat and nonfat milk, sugar, sweet whey, high-fructose corn syrup, guar gum, monoglycerides and diglycerides, cellulose gum, sodium phosphate, carrageenan, citric acid, E129 and artificial strawberry flavour.

And what does that "artificial strawberry flavour" contain?

Just these few yummy chemicals: amyl acetate, amyl butyrate, amyl valerate, anethol, anisyl formate, benzyl acetate, benzyl isobutyrate, butyric acid, cinnamyl isobutyrate, cinnamyl valerate, cognac essential oil, diacetyl, dipropyl ketone, ethyl butyrate, ethyl cinnamate, ethyl heptanoate, ethyl heptylate, ethyl lactate, ethyl methylphenylglycidate, ethyl nitrate, ethyl propionate, ethyl valerate, heliotropin, hydroxyphrenyl- 2-butanone (10% solution in alcohol), ionone, isobutyl anthranilate, isobutyl butyrate, lemon essential oil, maltol, 4-methylacetophenone, methyl anthranilate, methyl benzoate, methyl cinnamate, methyl heptine carbonate, methyl naphthyl ketone, methyl salicylate, mint essential oil, neroli essential oil, nerolin, neryl isobutyrate, orris butter, phenethyl alcohol, rose, rum ether, undecalactone, vanillin and solvent.

The chicken nuggets and hamburgers at fast food restaurants are usually the least profitable things on the menu. Selling French fries is profitable - and selling soft drinks is incredibly profitable. "We at McDonald's are thankful," a top executive once said, "that people like drinks with their sandwiches." Today, McDonald's sells more Coca-Cola than anyone else in the world.

The fast food chains buy Coca-Cola syrup for about 53p a litre. They add the syrup to bubbly water and serve it in a paper cup. A medium Coke that sells for 75p contains about 5p worth of syrup. Buying a large Coke for 85p instead, as the worker behind the counter always suggests, will add another 2p worth of syrup - and another 8p in pure profit.

Thanks in large part to the marketing efforts of the fast food chains, Americans now drink about twice the amount of soft drinks as they did 30 years ago. In 1975, the typical American drank about 120 litres of soft drinks a year. Today, the typical American drinks about 240 litres of soft drinks a year. That's well over 500 340ml cans of soft drink, per person, every year.