Nestle Aims to Boost Sales of Healthier Products by 2030

By Giulia Petroni

Swiss packaged-food giant Nestle aims to boost sales of products with a higher nutritional value by the end of the decade in a step to improve the health profile of its portfolio.

The maker of KitKat chocolate bars and Nescafe coffee said it wants to increase sales of these products by between 20 billion Swiss francs and 25 billion Swiss francs ($21.7 billion-$27.2 billion) by 2030, or by 50% compared with 2022 levels.

The target comprises plant-based food such as vegan burgers, powdered-milk, some ready meals, as well as baby foods, vitamin and mineral supplements. Petcare products and infant formula for children aged 0-to-12 months aren't included.

Food-and-beverage companies have come under pressure in recent years to boost the health profile of their portfolios and become less reliant on unhealthy products, generally high in sugar and saturated fats.

Last year, Nestle started using an international nutrient profiling system, called HSR, which ranks the nutritional profile of packaged products on a scale from half a star to five stars based on the quantity of specific components, including energy, saturated fat, total sugars, sodium, protein, dietary fiber, and the content of fruit, vegetables, nuts and legumes. A score of 3.5 stars or above is considered healthy, according to the system.

In its 2022 report, Nestle said that--excluding pet food--37% of revenue came from food-and-beverage products with a rating of 3.5 stars or more, while 43% came from products rated lower than 3.5 stars. An additional 20% of sales came from specialized nutrition products, which are not covered by the system and include infant food and medical nutrition.

Alongside multivitamins and bottled water, Nestle's brands include a range of breakfast cereals and confectionery like Milkybar and Smarties, as well as instant-coffee, milkshake drinks and Haagen-Dazs ice cream.

Investors across the food industry are demanding increased transparency on the nutritional value of products to get a better understanding of companies' sustainability efforts, as well to push for initiatives that help consumers make healthier choices.

Nestle said it will work to improve existing products and grow its affordable offerings, rolling out initiatives that include the adoption of more responsible marketing practices, particularly for children's confectionery and ice cream, and ensuring portions for products in these categories will be 110 kilocalories or less.

"These changes will be fully rolled out within the next three years, starting in spring of next year in the U.K. where Nestle will provide more visually intuitive front-of-pack portion guidance on confectionery," the company said. "They come on top of Nestle's decision to voluntarily restrict its marketing to children under the age of 16, which came into effect at the beginning of July this year."

The policy, which prohibits direct advertising of confectionery and ice cream as well as water-based beverages with added sugars to children under 16 years old, was applied to television and online platforms, including social media and gaming, with greater than 25% of their audience under that age.

Write to Giulia Petroni at [e-mail]

(END) Dow Jones Newswires

September 28, 2023 09:20 ET (13:20 GMT)

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