A group of influential shareholders has criticized Nestlé, the multinational food and beverage company, for its approach in promoting healthier products to increase sales.
Coordinated by investment lobby group ShareAction, these shareholders are concerned that Nestlé’s recent announcement of a new healthy food target undermines the company’s commitment to ensuring balanced diets for people worldwide.
Nestlé has set a goal to increase the sales of “more nutritious” products by 50% by 2030. The company plans to invest significantly in renovating existing products and driving innovation to support this initiative.
Furthermore, Nestlé aims to achieve Sfr20bn-25bn ($21.77bn-27.21bn) in sales from healthier products by 2030, representing a 50% growth compared to 2022 sales.
In response to Nestlé’s pledge, Simon Rawson, ShareAction’s director of corporate engagement, criticizes the company’s flawed approach to setting targets and questions its commitment to promoting healthier outcomes for society and the economy.
If Nestlé is genuinely committed to promoting healthier diets, it should establish targets for increasing the proportion of food sales classified as healthier, using a nutrient profiling model endorsed by the government. This way, the company can contribute more effectively to improving public health and well-being.
In a joint statement, Nestlé shareholders including Legal and General Investment Management (LGIM) and pension provider Nest express two crucial concerns. Firstly, they argue that Nestlé’s target of a 50% increase in sales from more nutritious products by 2030 is merely aligned with the company’s current overall growth guidance of 4-6% per year. This means that if sales of less healthy products also increase at a similar rate, there will be no positive impact on consumer diets and public health.
Secondly, the investors and ShareAction accuse Nestlé of considering certain products, such as coffee and commercial baby foods, as nutritious, even though they do not fall within government-endorsed nutrient profile models. This raises questions about the company’s ability to achieve its target by selling more of these foods without having a genuine positive impact on public health.
Addressing these concerns, Maria Larsson Ortino, senior global ESG manager at LGIM, emphasizes the importance of Nestlé as a major player in the food and beverage industry and its potential to set higher market standards. She acknowledges Nestlé’s use of the internationally recognized nutrient profile model, Health Star Rating (HSR), as a positive step, but believes that the company missed an opportunity to set a specific, measurable, and ambitious target whereby at least 50% of sales come from products meeting healthy thresholds by 2030.
ShareAction has previously scrutinized Nestlé’s portfolio in terms of its health credentials. In March, it highlighted the company’s heavy reliance on the sale of less healthy food and drink products.
A spokesperson stated that Nestlé has set an ambitious target aligned with its growth guidance and strongly believes that its entire portfolio can contribute to a healthy and balanced diet. The company intends to grow the more nutritious part of its portfolio by Sfr20-25bn by 2030, accompanied by measures to strengthen responsible marketing and support nutritious choices.
