Industry
Unhealthy items lift FMCG food revenue
Summary
- Global non-profit Access to Nutrition Initiative, which analysed data on 1,901 products from 20 of India’s biggest FMCG companies, noted they derive 76% of their revenue from less healthy products
India’s top fast-moving consumer goods (FMCG) companies earn three-quarters of their packaged foods revenue from products that rank poorly on health, a sobering analysis showed.
Access to Nutrition Initiative (ATNI), a global non-profit, which analysed data on 1,901 products from 20 of India’s biggest FMCG companies, noted they derive 76% of their revenue from less healthy products. These companies together account for 36% of total sales of processed packaged foods in the country.
The findings come at a time when, according to the ATNI report, the total sales value of processed foods has increased at a compounded annual growth rate (CAGR) of 15.32% from 2011 to 2021, compared to just 9.6% for consumer spending on all food and beverage F&B products in the same period.
ATNI, which measures private sector accountability for nutrition, noted in a report released on Wednesday that the average healthiness scores of these companies has remained unchanged from its 2020 findings.
ATNI’s index methodology deployed 58 indicators across seven categories against which companies are scored. These metrics cover product profile, governance, accessibility, marketing, workforce nutrition, labelling and policy engagement. Based on this analysis, ITC topped the overall rankings, followed by Hindustan Unilever, Nestle India, PepsiCo India and Coca-Cola India.
But that is really nothing to crow about. “The mean healthiness of companies’ products was found to be 1.9 stars out of 5.0 (the same as in 2020), with substantial variation observed between companies. Over half or 55.6% of all products on the market scored 1.5 out of 5 stars or below. Overall, 12% of products were eligible to be marketed to children according to the World Health Organization South-East Region (WHO SEAR) criteria," ATNI said on Wednesday.
The index used the internationally recognized Health Star Rating (HSR) nutrient profiling model, which is also endorsed by several governments. Products with a score of 3.5 stars or more out of 5 HSR can be confidently promoted in public settings as healthier choices, it said.
“There is room for improvement, but it also shows that the industry can have a positive contribution. And we realized that in India, the food produced by industry is only providing for part of the average Indian family’s diet. A lot of food is still consumed in the informal markets," Mark Wijne, research director, ATNI, said in an interview.
Meanwhile, seven companies were found to have at least one reformulation target in place to reduce nutrients of concern such as sodium, saturated fats and sugar in their portfolio.
Hindustan Unilever, ITC and PepsiCo India stand out for having set targets to reduce all three nutrients of concern (salt, sugar and saturated fat) for at least part of their product portfolio, the report said. Two companies—Hindustan Unilever and ITC—were found to have targets in place to increase levels of beneficial ingredients like fruits and vegetables and whole-grains in their relevant product categories.
Ten companies reported they are currently voluntarily fortifying or enriching processed standardized food and beverage food products—most of these are fortifying edible oil and using premix as their chosen method of fortification. Hindustan Unilever is using fortified staples as ingredients in product formulations, it said. While companies may be enriching their foods and beverages with additional vitamins and minerals, it is important to note that many of these foods being fortified include drinks and sweet dairy drinks that are already high on sugar content.
