The world’s biggest food companies have considerable progress to make in tackling obesity and related health concerns if they are to avoid government intervention that could damage investor returns, according to a ranking created by Insight Investment and JP Morgan.
The obesity benchmark, launched this month, rates the world’s ten largest food companies on their response to one of the world’s fastest growing health crises. In 2006, the World Health Organisation, reported that 1.6 billion adults worldwide were overweight and 400 million were clinically obese. Related health problems such as heart disease, strokes, cancer and diabetes, have prompted governments worldwide to take action.
Last year, a UK government report said the social consequences of obesity were as dangerous as those of climate change for the environment. However, the new benchmark report says US and EU governments have so far backed voluntary targets for companies before deciding to step in and legislate. The research said none of the ten food giants company had produced clear and comprehensive targets on health, making it difficult to assess what they are doing or track their progress.It said the best companies were reviewing and reformulating products to meet international nutritional guidelines, but that progress reporting was generally weak. It also identified a “labelling free-for-all” with front-of-pack food labels using different formats, and logos based on companies’ own nutritional guidelines, which it said would likely cause confusion for consumers.
In addition, it said only three companies appear serious in promoting healthy food amongst the poor in both developed countries and emerging markets. The Insight/JP Morgan benchmark shows French food group Danone as the best performing large food company in its response to obesity, followed by Unilever, the Anglo Dutch group and Nestlé, the Swiss group. It said all three European companies have integrated health issues into their core business strategy. Companies score highly by promoting good nutrition and adhering to responsible marketing practices across all the products they sell globally.
US food companies, including Kellogg and Kraft performed less well, tending to focus their health efforts on their home market and do less in other markets,
particularly developing countries.
The ranking was compiled from research and investor meetings with the companies. Rachel Crossley, director, investor responsibility at Insight Investments, said: “I think the issue of potential future regulation is of concern to investors. Legislation may not be bad, but it can be onerous, costly and sometimes quite blunt. At the moment, governments are telling companies to improve their standards voluntarily, and there are many that are behind the curve on this. In addition, we’re seeing a consumer move to healthier foods that is starting to register on the share prices of companies that can take advantage of what we believe will be a permanent shift.”Final ranking
- Cadbury Schweppes
- Coca Cola
- Premier Foods