Alarming New Report Ranks Food & Beverage Companies on Nutrition Efforts

Is PepsiCo better than Coca Cola when it comes to nutrition-related commitments, performance and disclosure practices? How about Hershey vs. Mars or Kraft vs. General Mills? I could give you an answer but it wouldn’t be a quantitative one. Based on what I know, I would go with PepsiCo, Hershey and Kraft, but I really couldn’t tell you how they compare to their counterparts. At least, not until last week.

This is when the first edition of the global Access to Nutrition Index (ATNI) report and rankings was released assessing the nutrition-related commitments, performance and disclosure practices of 25 of the world’s largest food and beverage manufacturers. While the good news is that finally we have the metrics to evaluate how these companies address challenging nutritional issues, the bad news is that most of them perform quite poorly.

What I like about the ATNI is that it doesn’t only provide a comprehensive, independent assessment of how well food and beverage companies’ practices align with competitors, but also benchmarks against which they can improve their approach to nutrition. In other words, unlike many other rankings that just show you companies ranked based on the "best in class" principle, the ATNI shows you not only if companies do good, but also if it’s good enough.

"The aim is to promote a more objective public debate and encourage companies to do more to address nutritional needs of customers," Keith Bezanson, chair of the ATNI Independent Advisory Panel, explains. And he’s right – although both obesity and undernutrition are among the world’s most pressing public health concerns, we still don’t have any comprehensive CDP-like research and reporting effort, so it’s definitely the time to have one.

OK, so who are the best and the worst companies? The top and bottom ten are (the number in parentheses is their general score on a 10-point scale) as follows:

1. Danone (6.3)	16. Mars (1.6)
2. Nestle (6.0)	17. Ajinomoto (1.4)
3. Unilever (5.9)	18. Hershey (1.3)
4. PepsiCo (4.2)	19. FrieslandCampina (1.2)
5. Kraft Foods (3.5)	20. Brasil Foods (0.6)
6. Grupo Bimbo (3.2)	21. Nichirei (0.1)
7. ConAgra Foods (2.8)	22. Lactalis (0)
7. Kellogg (2.8)	23. Lotte (0)
9. Heinz (2.7)	24. Nissin (0)
10. General Mills (2.4)	25. Tingyi (0)

When almost all of the top 10 pupils in your class get an F grade, it's usually due to one of two causes – either the test you gave is not fair, or there’s something very wrong with this class. Guess what's happening here?

Companies were rated on a scale of 0 to 10 based on their nutrition-related commitments, performance and disclosure across seven different categories: Governance (corporate strategy, governance and management, 12.5 percent), Products (formulation of appropriate products, 25 percent),  Accessibility (delivery of affordable, available products, 20 percent),  Marketing (responsible marketing policies, compliance and spending, 20 percent), Lifestyles (support for healthy diets and active lifestyles, 2.5 percent), Labeling (informative labeling and appropriate use of health and nutrition claims, 15 percent), and Engagement (engagement with policymakers and other stakeholders, 5 percent).

Now, let’s look at a couple of categories to further understand the poor grades. The first one is accessibility, where the average of all companies’ scores is the lowest among all of the categories assessed by ATNI – besides Danone, Nestle and Unilever, all the other companies received poor scores, including 17 that received zero.

This category assesses companies’ efforts to make their healthy products more accessible through their approaches to pricing and distribution, or, in other words, if companies are creating a “level playing field” between healthy and less healthy options. It consists of two criteria - product pricing and product distribution.

So why did most companies receive poor scores for accessibility? The report explains that “the low level of performance of most companies may be due in part to a lack of public disclosure because of proprietary considerations (e.g., the commercial sensitivity of pricing strategies). Hence, in this case, the poor performance seems to be mostly a result of poor disclosure - only three companies disclose partial information on their approaches to product availability and only five companies disclose information on their commitments and performance.

Marketing is another interesting category, capturing the extent to which companies support consumers in making healthy choices by adopting responsible marketing practices and prioritizing the marketing of healthier products. The category assessed three criteria (responsible marketing policy, auditing and compliance with policy, advertising focus) for both all consumers and children.

All 25 companies received an F grade in this category (the first one was Danone with a 5.2 score). Looking more closely at the report’s analysis, it looks like the reason is that the authors defined an assessment basis that was too high for most companies. For example, when it comes to advertising focus for children, the report found that “most companies have a commitment to prioritize their healthy products when advertising to children under the age of 12 years. No company, however, has defined objectives and targets to back up its commitment on prioritizing its healthier products.”

You can find similar examples in other categories like labeling or products (“fewer than half of the assessed companies provided evidence of targets to reduce the levels of salt, fat, sugar and calories when relevant to their product portfolios”).

So is the bar too high or do food and beverage companies just operate poorly when it comes to nutrition? It’s up to stakeholders to decide. Now that they finally have the tools to assess food and beverage companies, they will be the ones to determine if this report will join the list of important reports that no one pays attention to or be a change agent in this industry.

[Image credit: Access to Nutrition Index]

Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons the New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.