Nestlé shareholders challenge reliance on unhealthy food sales

By Gwen Ridler

- Last updated on GMT

Nestlé shareholders have hit out at the manufacturer for its reliance on sales of less healthy foods. Image: Getty, TommL
Nestlé shareholders have hit out at the manufacturer for its reliance on sales of less healthy foods. Image: Getty, TommL

Related tags reformulation Regulation

Nestlé shareholders have hit out at the manufacturer for its reliance on sales of less healthy foods, threatening a resolution to force the food giant to focus on healthier foods at its annual general meeting.

Co-ordinated by investment NGO ShareAction, the coalition of shareholders urged the food and drinks giant to set a target to increase the proportion of its sales from healthier products, amid concerns over the regulatory, reputational and legal risks to the company.

The coalition also called on Nestlé to implement internationally accepted standards that define healthy food, rather than deviating from credible guidelines.  

Catherine Howarth, chief executive at ShareAction, questioned the legitimacy of Nestlé’s mission statement that its products have ‘the power to enhance lives’ when three quarters of its global sales were ‘unhealthy’ products high in fat, salt and sugar (HFSS).

“As Nestlé has consistently failed to set out how it will shift the balance of its sales towards healthier food options, concerned investors have been left with no option but to bring forward a resolution at the company’s AGM in April,” ​said Howarth.

“Any move away from sales of unhealthy products by Nestlé will inevitably support healthier communities all over the world and in the long-term help economies too.”

Nestlé nutrition targets

Responding to Nestlé’s target to sell ‘more nutritious’ products by 2030, the coalition noted how the manufacturer had failed to meet investor expectation for the company in improving public health.

In particular, the group was critical of the lack of commitment to reducing the sale of unhealthy products, noting how the planned increase in sales of healthier foods was merely in line with Nestlé’s projected growth.

Further, the target also included products such as coffee, which has no nutritional value, and is inconsistent with the nutrient profile model Nestlé has chosen. This makes its disclosure “incomparable with other manufacturers”​ and meant Nestlé could achieve its health target simply by selling more coffee.

ShareAction’s Healthy Markets investor coalition has been in dialogue with Nestlé and other large food manufacturers to drive the sector to produce healthier food options for all as a responsible contribution to addressing the health of consumers.

Maria Larsson Ortino, senior global ESG manager at Legal & General Investment Management (LGIM), said: “As a long-term investor, LGIM believes that healthcare costs and decreased productivity have significant negative consequences on our clients’ assets across multiple sectors.

Missed opportunity

“Following Nestlé’s health target announced last year, we publicly noted that we were disappointed that the company had not taken the opportunity to set a specific, measurable and proportional target to increase sales from products that meet healthy thresholds.

“Since the publication of the target, we have had additional engagements with Nestlé but consider the dialogue to have come to an impasse. We therefore deemed the next appropriate step to be to co-file this shareholder proposal. We want to press home to the company, and to the food and beverage sector as a whole, the importance we place on nutrition.”

Responding to the coalition, Nestlé said the resolution was counterproductive and that ShareAction was targeting the wrong company with this campaign.

A spokesman for the manufacturer said: “Nestlé was the first food and beverage company to provide transparency on the nutritional value of its entire portfolio against a government endorsed nutrient profiling model. This demonstrated that we offer a diverse range of products that is not reliant on indulgent or less nutritious options.

“The assertion that three quarters of our sales come from unhealthy products is wrong. We have made progress already in year one of our reporting, with more nutritious and specialised nutrition products going from 57% to 59% of global sales.

‘In the right direction’

“Looking at it another way, 50% of our sales now come from coffee, pet care and Nestlé Health Science products, up from 30% a decade ago. The numbers are going in the right direction.”

Nestlé drew attention to its work to reformulate its products, provide transparency, guide consumers towards balanced consumption and strengthen its responsible marketing practices.

“Our commitment to continuously enhance the portfolio was further solidified last year when we set an ambitious, timebound target to increase the sales of our more nutritious products globally by CHF 20-25bn ​[£17.7bn-£22.2bn] by 2030,” ​the spokesman added. “This is at the top end of our company growth guidance.

“While we take note of ShareAction's perspective, we disagree with the notion that we should aim to limit growth in specific areas of our portfolio. A proportional target is counterproductive to our value creation model.

“It would require us to weaken valuable parts of our portfolio, creating opportunities for competitors without yielding public health benefits. Our goal is to achieve success across all segments of our portfolio, ensuring that we address responsibly the diverse needs and preferences of our consumers.”

Investors with $1.68 trillion (£1.31 trillion) in assets under management, including Legal and General Investment Management, Candriam, and La Francaise Asset Management, are supporting the resolution, which will be voted on at Nestlé’s Annual General Meeting on 18th April.

Meanwhile, a recent report pointing a finger at food and drink firms that make most of their money from the sales of ‘unhealthy’ foods has been criticised for its lack of scope​ and failing to acknowledge manufacturers’ effort to control portion sizes.

Related topics NPD

Related news

Show more

Follow us

Featured Jobs

View more


Food Manufacture Podcast

Listen to the Food Manufacture podcast