Food & Drink Industry
The health risks from current products
Food high in sugar, salt and saturated fat is now implicated in a range of health problems, from obesity and type 2 diabetes to heart attack, stroke, several types of cancer and dental decay. For instance, eating too much unhealthy food is the main cause of obesity and there’s a seven times greater risk of type 2 diabetes in people who are obese.
So, it is no surprise that the food industry has been coming under increasing pressure to develop healthier foods – and not just from the usual suspects. Even the British Retail Consortium, including its big supermarket members, has called on the government to take tougher action to ensure more companies produce healthier food, and indications are that the government is now starting to listen.
We also know that drinking too much alcohol is bad for our health, a major cause of anti-social behaviour in town centres and a major source of pressure on hospital A&E departments.
So, what should food and drink companies be doing to reduce health risks from their products.
Food and drink companies at a tipping point?
In practice, the food industry is probably approaching a tipping point. Developments in food technology are making the production of healthier food easier. Consumer research has identified an increasing public desire for healthier food, particularly among the ever-growing number of educated consumers; and there is reputational risk to food and drink companies perceived to be resisting the move to healthier products. This has bottom line implications, with healthier food providing potential competitive advantage and greater lifetime value for food companies.
Options available to food and drink companies
Companies who want to produce food with a lower health risk now have a range of options. For instance, they can:
- Take an incremental (or stealth) approach, gradually amending the formulation of their products, so consumers don’t notice a difference in taste. This approach produced a reduction in salt levels in products like bread, under the coalition government’s voluntary Public Health Responsibility Deal.
- Use substitute products, like Trimbake (which uses a fruit and vegetable puree for baking, thereby using less sugar and fat and providing more fibre).
- Restructure sugar and salt, to give the same taste to consumers from a lower volume, without using artificial alternatives, thereby reducing consumption without compromising taste. For example, Tate & Lyle worked with Nottingham University to develop SODA-LO Salt Microspheres. This turns standard sea salt crystals into free-flowing hollow salt microspheres, meaning that our tongues perceive the same salt taste from a lower volume of salt. And Israeli company Doux Matok has developed flavour delivery particles. By adding 0.3% of food industry approved silica, which the body naturally excretes, the remaining 99.7% sugar is perceived by our taste receptors as sweeter than an equivalent amount of conventional sugar.
- Formulate food so it encourages satiety, as when Marks & Spencer developed the Fuller for Longer range (now marketed as Balanced for You), with input from researchers at Aberdeen University.
Alcohol companies now also have the option to develop low or no alcohol drinks.
Reformulation can be a complex process. Companies may need to consider the impact not only on taste but also on shelf life, food safety and processes such as baking.
However, reformulation is a core skill for food companies, who can already vary the formulation of the ‘same’ product for different parts of the world (to cater for different regional tastes or different regulatory requirements). They can also call on the expertise of external organisations to help with reformulation, including an increasing number of universities - and have access to some corporation tax relief for R & D.
The commercial case for producing healthier products
Evidence that healthier food is good for business comes from a range of sources. This includes consumer research organisations like Kantar World Panel, Leatherhead Food Research, Canadean, and Nielsen. It also comes from sales figures. For example, both globally and in the UK, sales of bottled water have now overtaken sales of sugary drinks. Meanwhile, in 2018 the consumer research company Nielsen reported, ‘There’s one segment which is really taking off with shoppers buying more, not just paying more, and this is in no/low-alcohol products’.
Again, here in the UK dunnhumby, who track supermarket sales, report that more health-conscious consumers spend more. It is reasonable to assume they will also tend to live longer in good health – meaning greater lifetime value for the companies whose products they purchase.
Some food and drink companies are already diversifying their product ranges to include not only products that reduce health risks but also products that have positive health benefits. For instance, PepsiCo now owns both Quaker Oats and Scott’s Oats, while Nestle owns Buxton Water.
Health concerns don’t represent an existential threat to the food industry. People will always need to eat and drink. And consumer behaviour is sometimes nuanced. For example, people may want their everyday foods to be healthy, but feel treats (like chocolates or eating out) may be treated more as indulgences, with less need to be healthy. So, we will always need a food industry.
Healthier food – good for health, good for business
Our analysis suggests that:
- Producing healthier food and being seen to do so, isn’t just good for public health, potentially reducing pressure on the NHS. It should have positive commercial benefits for food companies, enabling them to increase market share and profits amongst the country’s (and the world’s) increasingly better educated, more health-conscious consumers.
- With increasing public and political pressure for healthier food it makes sense for food companies to be seen as part of the solution, rather than part of the problem.