Health Issues Shaping Global F&B Firm Strategies

bread Health and nutrition issues are ever more powerful factors in shaping the strategies of leading multinational food and beverage (F&B) companies, underscores a new Packaged Facts report, "Top Global Food and Beverage Companies: Strategies for Success."

Commitment to innovation is the most prominent shared attribute among the eight global companies reviewed--Nestlé, Kellogg, Anheuser-Busch, Wrigley, Kraft, Heinz, Groupe Danone and Coca-Cola--and much of that innovation is focused on strategies for responding to worldwide pressures "to be accountable for and help promote healthier lifestyles," sums up PF.

PF's analysts point out that 79% of top F&B executives surveyed for Deloitte's "Food and Beverage 2012" report ranked health as the principal external issue driving the industry going forward. (Convenience ranked second.) Furthermore, 75% of consumers across the U.S., U.K., Germany, Argentina and China surveyed by Ketchum for its 2008 "Food 2020: The Consumer as CEO" report said they want food companies to create more products that can "reduce the risk of major health issues in the future."



Worldwide health issues such as obesity are increasingly linked to other top external factors driving the global F&B industry, including sustainability/the environment, regulation and corporate responsibility.

The demand for healthier, more nutritious foods from increasingly knowledgeable consumers, health advocacy groups and governmental agencies is a key driver of global F&Bs' product extensions, launches and reformulations--as well as their push to provide more nutritional information, particularly on labels and online, the analysts stress.

Examples of health-driven strategic initiatives noted in the PF report include:

  • Danone's focus on "pure health positioning" in four categories: fresh dairy, waters, baby nutrition and medical nutrition. Companies/brands outside that focus have been divested over the past decade (including last year's sale of the biscuits business). Danone's "Health Governance" rules and "Food, Nutrition and Health Charter" codify its commitment to "a rigorous scientific approach, obedience to the principles of self-regulation and constant consultation with stakeholders." R&D hubs and institutes within an international framework validate the scientific claims of Danone products, and its scientists work with local health/education professionals to raise awareness of health issues.
  • Nestlé's stepping up of its health agenda through its introduction in 2005 of a globally managed nutrition business, the Nestlé Wellness Program and its Nutritional Compass system (on-pack labeling enabling consumers to make healthier choices). In terms of product development, "Nestlé operates a 60/40 concept, whereby each product delivers 60% on taste and 40% on nutrition benefits," according to PF.
  • Coca-Cola's push into bottled waters, sports and energy drinks and juices; its multi-branding strategy in the still drinks category; and its expansion of vitamin/mineral-infused and low/zero-calorie soft drinks. The company emphasizes its healthier beverages in its sustainability review, and its Beverage Institute for Health & Wellness, staffed by nutritionists and other medical professionals and scientists, conducts research in support of the company's brands and product development. Outreach programs to health professionals and the media offer "science-based information about beverages, their ingredients and the role they play in health and active lifestyles."
  • In addition to Anheuser-Busch's lower-cal and lower-carb Bud Light and Bud Select extensions, the company has moved into producing wellness drinks on a niche level.
  • Wrigley has extended the sugarless gum category and built positive associations with dental health through product endorsements by dental associations and "investing heavily" in R&D to create innovative products with health features.
  • Kraft's Health Charter, established in 2004, supports its mission to "help people around the world eat and live better." Kraft's initiatives include being the first CPG to self-regulate advertising to children under 12; the Sensible Solution Program that identifies and flags Kraft products with limited calories, fat, sodium and sugar and other "better-for-you" attributes (now featured on 700 products in the U.S., according to PF); and "100-calorie" servings, now available for about 30 products.
  • Kellogg's health/nutrition emphasis has been reflected in its acquisitions since the late 1990's of brands grounded in "natural and wholesome" qualities that align with its premium brand status, points out PF. The company emphasizes that it was "founded more than a century ago with a philosophy of encouraging people to improve their health." The Kellogg Nutrition program and its microsite offer information and practical tips about diet and nutrition, active lifestyles, understanding labels and healthy breakfast and snacking choices.
  • Heinz is also "building on its wholesome products to grow a healthier portfolio," PF notes. The initiatives of its Health and Wellness Task Force, introduced in 2007 to drive its health agenda, include product development centers focusing on children's nutrition, weight management, lifestyle and health management.
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