A total of 33 investors, including Aviva Investors, Axiom, LBP AM, Crédit Mutuel Asset Management, and Nest, have issued a public statement urging companies in the sector to improve their health and nutrition reporting.
The move represents the first coordinated investor action focused on the healthiness of out-of-home (OOH) food sales, who argue that the sector is lagging “far behind” retailers and manufacturers when it comes to this kind of transparency.
Coordinated by responsible investment NGO ShareAction, the coalition warns that without openness they cannot accurately assess exposure to regulatory risks and shifting consumer demand, or businesses’ broader impact on public health.
As such, the group is calling on the OOH sector to improve their health and nutrition reporting through the use of internationally recognised nutrient profiling models and a measure of calories to credibly disclose the healthiness of total sales.
Investors want clarity
“Responsible investors have made it clear that healthy sales disclosure can no longer be optional. With one in five deaths linked to poor diets globally, unhealthy food is fuelling a public health crisis,” explained Garance Boullenger, healthy markets initiative lead at ShareAction.
“Fast-food chains and restaurants play a big part in our daily lives, but they provide very little visibility on how healthy – or unhealthy – their sales actually are. Transparency and ambitious targets are fundamental to making our lives and economies healthier.”
Coasting under the radar
According to the social missions-driven innovation organisation Nesta, 60% of people in the UK eat food from OOH businesses, such as restaurants, takeaways, pubs and bakeries, at least once a week. Between 2019 and 2023, this sector contributed an average of 14% of daily calories consumed by adults aged 19-64.
Further figures from the Office for Health Improvement and Disparities show the number of OOH sales increased by 10.6% in 2023 compared to 2021. Yet the sector has avoided the spotlight, with policymakers having centred most of their attention on retailers and manufacturers.
“The OOH food sector plays a major role in shaping what we eat in the UK. According to our national dietary survey 81% of adolescents and 77% of adults purchase food from out of home settings, and so actions to increase healthier sales could help to positively influence nutritional intakes in our population,” Bridget Benelam, nutrition scientist for the British Nutrition Foundation told Food Manufacture.
Vincent Kaufmann, CEO of Ethos Foundation - which is among the investors calling for action - added: “The healthiness of sales in the out-of-home sector is a material issue for responsible long-term investors, yet transparency on this topic lags behind food manufacturers and retailers.”
The group of investors point out that as consumer expectations and eating habits evolve, including the impact of GLP-1s, they will increasingly need to understand companies’ reliance on selling unhealthy products.
New regulation will also mean many in the food sector will need to share their healthy sale figures by law; with the UK Government promising to bring mandatory healthy sales reporting in as part of its 10-Year Health Plan.
This will apply to all food companies with more than 250 employees, including manufacturers, retailers and businesses across the OOH sector.
A lack of harmony
While the 33-strong group of investors are urging businesses to take action now and use metrics such as the UK NPM, the Health Star Rating and the Nutri-Score to provide this transparency; without a solid, harmonious benchmark, the reliability of such data is questionable.
Although the Government has promised on a plan, it’s not clear how such mandatory reporting will take shape. Question marks around the UK nutrient profiling model (NPM) have also been raised, with a new model set to come into effect.
“The UK nutrient profiling model (NPM) will be the key mechanism for defining what is ‘healthy’ vs ‘less healthy’ in UK policy,” said Benelam.
“The NPM 2004/5 is currently used, but it’s been confirmed that the updated NPM 2018 will apply in future, and a consultation on this change is currently open.
“To support mandatory reporting, companies must have systems in place to collate and analyse nutritional data on their products. For the NPM 2004/5, calculations must be made based on the calorie, saturated fat, total sugars and sodium content of products, versus their protein, fibre and fruit, vegetable and nut content. The key change that will come with the NPM 2018 is the need for data on free sugars content, which can be more challenging to calculate than the total sugars figure, which is usually used for food labelling.
“So, whilst companies that are not yet reporting on healthy sales will need to use the NPM 2004/5 model currently, it’s also important to plan for the shift to the 2018 model in future.”
All in all, health will start to become more important in the board room, and more businesses are likely to respond as a result. Yet, uncertainty over future regulation could see early movers finding themselves back at the starting line.
