Nestlé document says majority of its food portfolio is unhealthy

A presentation circulated among top executives early this year, seen by the Financial Times, says only 37% 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.

This system scores foods out of five stars and is used in research by international groups such as the Access to Nutrition Foundation. Nestlé, the Vevey-based maker of KitKats, Maggi noodles and Nescafe, describes the 3.5 star threshold as a ''recognised definition of health''.

Within its overall food and drink portfolio, some 70% of Nestlé's food products failed to meet that threshold, the presentation said, along with 96% of beverages – excluding pure coffee – and 99% of Nestlé's confectionery and ice cream portfolio.

Water and dairy products scored better, with 82% of waters and 60% of dairy meeting the threshold.

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''We have made significant improvements to our products . . . [but] our portfolio still underperforms against external definitions of health in a landscape where regulatory pressure and consumer demands are skyrocketing,'' the presentation said.

The data excludes baby formula, pet food, coffee, and the health science division, which makes foods for people with specific medical conditions. This means the data accounts for about half of Nestlé's CHF92.6 billion ($103 billion)) total annual revenues.

The findings come as foodmakers contend with a global push to combat obesity and promote healthier eating. Executives at Nestlé are considering what new commitments to make on nutrition and are aiming to unveil plans this year.

The group is also updating its internal nutrition standards, known as the Nestlé Nutritional Foundation, that were introduced under former chief executive Peter Brabeck-Letmathe, who characterised Nestlé as a ''nutrition, health and wellness company''.

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One option could be to drop or replace these standards for products seen as treats, like confectionery, according to a person familiar with the situation.

Mark Schneider, chief executive, has acknowledged that consumers want a healthier diet but rejected claims that ''processed'' foods including those made by Nestlé and other multinationals tend to be unhealthy.

However, the presentation highlights Nestlé products such as a DiGiorno three meat croissant crust pizza, which includes about 40% of a person's recommended daily allowance of sodium, and a Hot Pockets pepperoni pizza that contains 48%.

Another product, an orange-flavoured San Pellegrino drink, scores an ''E'' – the worst mark available under a different scoring system, Nutri-Score – with more than 7.1g of sugar per 100ml, the presentation says, asking: ''Should a health-forward brand carry an E [rating]?'' 

Separately, Nestlé's strawberry-flavoured Nesquik, which is sold in the US, contains 14g of sugar in a 14g serving, though it is designed to be mixed with milk. It is described as ''perfect at breakfast to get kids ready for the day''.

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Nestlé said it ''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''.

''Our efforts build on a strong foundation of work over decades . . . For example, we have reduced the sugars and sodium in our products significantly in the past two decades, about 14-15% in the past seven years alone.''

Marion Nestle (no relation), visiting professor of nutritional sciences at Cornell University, said Nestlé and its rivals would struggle to make their portfolios healthy overall.

''Food companies'' job is to generate money for stockholders, and to generate it as quickly and in as large an amount as possible. They are going to sell products that reach a mass audience and are bought by as many people as possible, that people want to buy, and that's junk food,'' she said.

''Nestlé is a very smart company, at least from my meetings with people who are in their science [departments] . . . but they have a real problem . . . Scientists have been working for years to try to figure out how to reduce the salt and sugar content without changing the flavour profile and guess what, it's hard to do.''

Some products perceived as healthy, such as plant-based meat alternatives, are areas of strong growth for foodmakers. Nestlé has sold some of its divisions that produced less healthy products, such as a 60% stake in the Herta charcuterie arm in 2019.

Nestlé was ranked highest among the world's big food and beverage manufacturers in a 2018 index of efforts to encourage better diets compiled by the Access to Nutrition Foundation, though the foundation warned that ''all companies need to do much more''.

Nestlé said: ''In recent years, we have launched thousands of products for kids and families that meet external nutrition yardsticks. We have also distributed billions of micronutrient doses via our affordable and nutritious products.''

It added: ''We believe that a healthy diet means finding a balance between wellbeing and enjoyment. This includes having some space for indulgent foods, consumed in moderation.

''Our direction of travel has not changed and is clear: we will continue to make our portfolio tastier and healthier.''

Copyright The Financial Times Limited 2021

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