Nestle In A Tight Spot After 60% Of The Food Portfolio Deemed “Unhealthy”

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Nestle, the largest food and drink processing conglomerate, has been under fire over an internal presentation wherein the company acknowledged that a significant percentage of their mainstream products do not meet a “recognised definition of health”. The internal report that was first accessed by The Financial Times stated that only 37 per cent of the company’s food portfolio achieved a 3.5 rating or above under Australia’s health star rating system. The Maggi makers have recognised the fact that some of their food items will “never be healthy” no matter how much they renovate their products. One such product is their chocolate that contains a high level of sugar, although they have tried to incorporate nuts and fruits to tackle this issue.

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The British financial paper stated that this assessment applied to about half of Nestle’s overall portfolio because categories like medical nutrition, pet food, pure coffee and baby food were excluded from the analysis. Jon Cox, a Kepler Cheuvreux analyst, said that including these categories would significantly lower the proportion of products potentially considered unhealthy.

“Given the group’s confectionery, ice cream, and pizza businesses, the real figure for the group based on 2021 estimates would be 28%, which is hardly a surprise,” he said in a note. He said the report could point to changes in the product portfolio, notably an exit from mainstream confectionary.

The document specified that almost 99 per cent of their confectionary items and 96 per cent of their drinks failed to meet the health mark. Going into total firefighting mode, the internal presentation admitted that the portfolio still underperforms, even after making significant improvements in their products. A Nestle spokesperson since then has made a global statement stating that they are working on a company-wide mandate in order to update their nutrition strategy. Nestle has stated that they have reduced sugars and sodium in their products by about 14-15% in the past seven years and would continue to make their products healthier.

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While this row is nowhere near the Maggi debacle they faced back in 2015 that shook their reputation and existence in the Indian Market, the company is still taking proactive steps to salvage the situation in India. While talking to PTI, a Nestle India spokesperson emphasised the importance of nutrition as a fundamental need and the role of the food industry in enabling healthier lives. They stated that currently, they are striving to increase the nutrient ratio in their products as well as innovate new and nutritious offerings.

The sales of Indian favourites like Maggi, Kit Kat, Nescafe and much more has led to India ranking number 11 in terms of the contribution towards Nestle’s global revenue in 2020.

(With Inputs from Reuters and PTI)



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