Dive Brief:
- Nestlé is vowing to sell more nutritious products by 2030 as the world’s largest food company aims to improve the healthiness of its portfolio and change the way it goes about marketing some its offerings.
- The Lean Cuisine and Nescafé manufacturer said its goal is to boost sales of more nutritious items by 20 billion Swiss francs to 25 billion Swiss francs (about $21.8 billion to $27.3 billion) by the end of this decade. This represents about 50% growth over its 2022 sales.
- Food and beverage companies around the world have been under pressure from consumers and watchdog groups to improve the nutritional content of their products by cutting the presence of salt, sugar, saturated fat and artificial ingredients.
Dive Insight:
Nestlé has been among the most transparent food companies when it comes to boosting sales and improving its portfolio mix of better-for-you items.
In March, Nestlé estimated 37% of its net sales, excluding pet care and specialized nutrition, came from products that are considered “healthy,” according to a widely used ranking platform known as the Health Star Rating system. It also reported that 43% of its net sales came from food and beverages that should be consumed occasionally or that should have their nutritional value improved.
To achieve its newest 2030 goal, Nestlé said it will spend “significantly” to renovate existing products and spur innovation. It added that the company will expand micronutrient fortification opportunities, grow its affordable offerings and further develop its portfolio of plant-based ingredient products and recipes.
In an effort to help consumers make better choices, Nestlé said it will use more responsible marketing of indulgent products. For all confectionery and ice cream portions targeted at children, for example, Nestlé said there will be a 110 kilocalories limit.
These changes, the Switzerland-based company said, will be fully rolled out within the next three years, starting in the spring of next year in the U.K. They build on Nestlé’s decision to voluntarily restrict its marketing to children under the age of 16. The measure started in July.
Food and beverage companies have been criticized for not doing enough to make their products healthier. A study by the Access to Nutrition Initiative in 2022 found about 70% of all food and beverages are less “healthy,” and no big CPG gets a majority of its sales from “healthier” products.
Earlier this year, more than two dozen institutional investors urged Nestlé to set a target to increase the portion of sales that come from better-for-you products. The shareholders said the market is currently oversaturated with foods that cause harm to public health and that create “systemic risks to investor returns.”
While many consumers are willing to indulge from time to time, there is a growing push among many shoppers to eat healthier overall. Nestlé and other food companies have no choice but to improve the nutritional content of what they sell, or risk losing sales as consumers turn to companies that have invested the time and money.
A priority for Nestlé in recent years has been regulating sugar content. Three years ago, Nestlé discontinued its Milkybar Wowsomes lower-sugar chocolate bar that launched in the U.K. and Ireland, after it faced low sales and struggled to sustain distribution, BBC reported. The bar contained Nestlé’s sugar-reduction technology, which reduced the sweetener by 30%.
It tried again this summer, with the introduction of what Nestlé called a “versatile and cost-effective” sugar reduction technology that can be used in different product categories. The “breakthrough technology” uses an enzymatic process to reduce intrinsic sugar in ingredients such as malt, milk and fruit juices by up to 30%, with a minimal impact on taste and texture, the company claimed.
