By Aileen Corrieri, Food & Health Senior Research Officer, ShareAction
The food industry is a long way from driving positive change.
This is the stark and sober finding in the World Benchmarking Alliance’s (WBA) baseline assessment for its Food and Agriculture Benchmark.
The ambitious project looks at how the food industry is addressing environmental, social and nutrition issues.
It assesses 350 companies from all over the world and across the entire food supply chain from farm to fork, including agricultural inputs, agricultural products and commodities, animal protein companies, food and beverage processors, food retailers, and customer service companies (such as restaurants and food service companies).
An industry failing to commit to global issues
Overall, the majority of companies have failed to adopt a holistic approach to deal with environmental, social and nutrition challenges.
A quarter of the companies assessed failed to disclose a single commitments. 75 per cent of companies have some commitments in place. Just 12 companies were found to have comprehensive commitments across all three areas.
These results are disappointing. The companies have a central role addressing systemic issues. They have a responsibility to act.
To achieve a fairer, healthier and more sustainable world, we need the private sector to contribute positively to climate change, human rights and nutrition. To do this, it is critical that they improve their supply change and business practices.
Failure to do so will only further exacerbate the global challenges we currently face.
The nutrition blind spot
While performance needs to improve across all issues, the report found a significant lack of corporate commitments on improving nutrition - the most overlooked area by many companies.
Particularly worrying, it found that the retail sector was the least committed to nutrition issues out of all sectors along the food supply chain. No global or UK retailer included in the study showed strong commitments to improving nutrition.
This mirrors our findings from the Supermarket Spotlight report which found that none of the UK retailers reported comprehensively on their commitments and efforts to improve access to healthy diets.
This is a considerable oversight for a consumer-facing sector attracting two thirds of UK household’s food spend and which so many people rely on to access affordable, healthy foods.
Rising regulation in the face of industry inaction
The need to improve nutrition and increase access to healthy diets has never been more pressing. Obesity rates are rising all over the world due to unhealthy diets and Covid-19 has more heavily impacted countries where obesity-related diseases are prevalent.
The combination of rising ill health and the food industry’s slow pace in addressing poor nutrition has led to an increase in regulation to limit the sale and marketing of unhealthy foods and get the food industry to improve its practices.
In Mexico, multiple states have announced plans to ban the sale of products high in fat, sugar or salt to children under 18, while the UK government published a new obesity strategy which includes plans to restrict the placement and promotions of unhealthy food and drink in supermarkets.
Similar measures are only likely to increase worldwide as the lack of commitments, action and disclosure from industry players becomes more apparent.
Risk and opportunities for retailers
As regulation rises, so does the financial risk for retailers who rely on unhealthy products for profits and sales.
Failure to commit to improving nutrition and adapt business practices to this changing regulatory landscape will only lead to higher costs and losses down the line when bans and restrictions eventually kick in.
On the other hand, forward-thinking retailers who integrate nutrition into their growth strategies and have clear commitments on this will be better positioned and are likely to gain a competitive advantage over their competitors.
Ultimately, it’s in the companies’ interest to take a leadership role in improving healthy diets. Taking ownership of this issue will have a positive impact on their customers, their business and potentially stave off further regulation in the future. But only if the commitments and actions taken are meaningful and impactful.
To improve healthy diets, Healthy Markets is urging retailers to adopt targets to increase the proportion of sales from healthy products, a key metric that shows both commitment and action.
For investors interested in this topic you can join our Healthy Markets Investor Coalition to drive change in the food and drink industry and get the latest data and analysis on how retailers and manufacturers are addressing childhood obesity and healthy diets.
