Nestle Working on 'New Strategy’ Amid Scrutiny Over its Food, Beverages Portfolio

Olufemi Adeyemi

Recently, the world’s largest food company, Nestlé, acknowledged that more than 60 per cent of its mainstream food and drinks products do not meet a “recognised definition of health” and that “some of our categories and products will never be ‘healthy’ no matter how much we renovate”.

A presentation circulated among top executives last year, says only 37 per cent of Nestlé’s food and beverages by revenues, excluding products such as pet food and specialised medical nutrition, achieve a rating above 3.5 under Australia’s health star rating system.

Nestlé is highlighting its reformulation efforts following UK media reports that 60 percent of the Swiss food giant’s F&B portfolio does not meet a “recognized definition of health.”

“Nestlé is working on a company-wide project to update its pioneering nutrition and health strategy. We are looking at our entire portfolio across the different phases of people’s lives to ensure our products are helping meet their nutritional needs and supporting a balanced diet,” a spokesperson tells Nutrition Insight.

“Our direction of travel has not changed and is clear: We will continue to make our portfolio tastier and healthier,” they continue.

However, they were unable to confirm any of the claims made by the Financial Times, which referred to an internal “presentation circulated among top [Nestlé] executives this year.” Nestlé is focusing on assessing the part of its F&B portfolio that can be measured against external nutrition profiling systems.

Assessing nutrition profiling systems

According to the newspaper report, only 37 percent of Nestlé’s food and beverages by revenues, excluding products such as pet food and specialized medical nutrition, allegedly achieve a rating above 3.5 under Australia’s Health Star Rating System, which rates products out of five stars.

Nutrition Insight specifically asked Nestlé about the claims made in the article. The multinational stresses that it does, in fact, “meet external nutrition yardsticks”.

The spokesperson states that as Nestlé considers its future nutrition strategy, it is first focusing on assessing the part of its F&B portfolio that can be measured against external nutrition profiling systems.

“Systems like the Health Star Rating and Nutri-Score are useful in this regard and enable consumers to make informed choices. However, they don’t capture everything. About half of our sales are not covered by these systems. That includes categories such as infant nutrition, specialized health products and pet food, which follow regulated nutrition standards,” they emphasize.

“In recent years, we have launched thousands of products for children and families that meet external nutrition yardsticks. We have also distributed billions of micronutrient doses via our affordable and nutritious products,” adds the spokesperson.

Last year, Nestlé joined a coalition calling for Nutri-Score to become the mandatory front-of-pack nutrition labeling (FoPL) system across the EU.

At the time, Bart Vandewaetere, head of corporate communications and government relations for Nestlé Zone EMENA, told Nutrition Insight: “COVID-19 is not changing our own target to roll Nutri-Score out entirely by the end of 2021. While there might be a couple of weeks delay here and there, our commitment to honoring this deadline is strong.” Systems like Health Star Rating and Nutri-Score “do not capture everything,” notes the spokesperson.

Finding balance

According to the Financial Times, the internal Nestlé document also acknowledged that some categories and products will never be “healthy,” no matter how much the company “renovates.”

“We believe that a healthy diet means finding a balance between well-being and enjoyment. This includes having some space for indulgent foods, consumed in moderation,” states the Nestlé spokesperson.

Even within frequently sugar-laden categories like confectionery, the company is exploring formulations beyond the traditional scope. For example, Nestlé recently unveiled the first vegan KitKat, which is part of the food giant’s strategy to pivot its businesses to changing market conditions while renewing its commitment to healthy and nutritional food.

The company also boosted its plant-based portfolio with dairy alternatives last year. Among the offerings is Nesfit Sabor Natural, a glass of which contains as much protein (7 g) and calcium as cow’s milk and is fortified with vitamins A and D.

A history of reformulation

The spokesperson continues that Nestlé’s efforts build on a “strong foundation of work over decades” to improve the nutritional footprint of its products.

For example, it has reduced the sugars and sodium in its products significantly in the past two decades, about 14 to 15 percent in the past seven years alone.

Last year, a Nestlé report revealed that the company had added at least 750 million portions of vegetables, 300 million portions of nutrient-rich grains, pulses and bran, and more nuts and seeds to its products.

Additionally, all Nestlé-branded cereals now carry a Green Banner, denoting it as a source of fiber and made with whole grains.

However, the company stated that formulation for healthier products was “still in progress” for the removal of all artificial colors from products (with the exclusion of pet food).

Expanding healthy offerings

In Nestlé’s full-year 2020 financial results, Nestlé Health and Science (NHSc) grew at double-digit rate, reflecting higher demand for products that support health and the immune system.

In 2021, Nestlé reported that buoyant sales in e-commerce, convenience foods and health ingredients contributed to organic growth of 3.5 percent in the first nine months of 2020.

The company continues to hone its focus on nutritional offerings, most recently with the agreement to acquire the core brands of The Bountiful Company for US$5.75 billion.

Also in 2021, Nestlé Health Science (NHSc) agreed to acquire Nuun, a functional hydration brand in the sports beverage market. The acquisition complements Nestlé Health Science's existing broad portfolio of active lifestyle nutrition brands with Nuun's range of clean, low-sugar, effervescent tablets and powders.

Nuun was founded in Seattle, Washington in 2004, pioneering the separation of electrolyte replacement from carbohydrates. Its low-sugar electrolyte tablet revolutionized the sports beverage market. It now has a broad range of effervescent tablets and powders containing additional minerals and vitamins for energy, relaxation and overall well-being.

Offering further transparency

Nestle has also hinted that later this year it will be providing additional product information under its Good For You strategy that will empower consumers to make informed decisions regarding the foods they are purchasing. We will be introducing the application of the Health Star Rating (HSR) system to all products in our global portfolio in order to provide more transparency to consumers,"Schneider said.

"There will be 14 major markets where we will also do the same for the national portfolios, though these wil naturally follow local rating systems."

Although Schneider remained coy on revealing the actual markets set for this initiative to be rolled out at this stage, he also highlighted to FoodNavigator Asia that a number of APAC markets will be included in the initial 14 markets.

We have chosen to use the HSR system for this project as it is a well-understood and respected system that is also used,"he told us.

It is used by the Access to Nutrition Index, so we felt it is a good way to provide consumers with the added information and clarity they need [when making purchasing decisions]."

The HSR rating system was initially developed in Australia and New Zealand and is a voluntary system that has long been the subject of intense debate as to whether it should be made mandatory.

It is however still widely considered by respected organisations such as the Access to Nutrition Initiative (ATNI) to be applicable for any market to determine how healthy each product is'.

Nestle, the world’s biggest food company, is the first company to disclose the nutritional value of its portfolio for the first time. Other major food and drinks companies in the country are all likely to also score poorly in the health ranking.

The likes of Unilever, Cadbury, Coca-Cola, Friesland WAMCO, NBL, Indomie (Dufil Foods) and many others produce food and drinks containing high amounts of sodium, sugar and saturated fats.

The revelation comes as Nestlé and other food makers face increasing pressure from regulators and consumers to improve the healthiness of its products and reduce obesity and chronic diseases.

March 23, 2023