Despite Nestlé’s increased transparency regarding the healthiness of its food products, investors are urging the company to take further action. Last month, Nestlé reported that 37% of its net sales, excluding pet care and specialized nutrition, come from items deemed “healthy.” The Swiss company, known for brands like Lean Cuisine, Sweet Earth, and Tombstone pizza, estimated that 43% of its net sales are derived from food and beverages that are meant for occasional consumption or require nutritional enhancement.
In 2022, Nestlé pledged to “enhance the transparency of the nutritional value of our global portfolio” by evaluating its products against the Health Star Rating (HSR) system, which measures food based on factors such as saturated fat, sodium, sugar, protein, and vegetable content. Although Nestlé has made progress with products like Carnation Breakfast Essentials and Natural Bliss, the company has cautioned that there may be difficulties in improving the health attributes of certain indulgent offerings. “It’s evident that while progress is being made, there are limits. Therefore, enjoyment-focused categories will not transform into health-focused categories,” stated Mark Schneider, Nestlé’s CEO, during an earnings call in February.
Investors, however, seem skeptical, as expressed in a letter sent to Nestlé. “We encourage the company to seize the opportunity to stay ahead of food-related regulations and the evolving expectations of consumers,” the letter emphasized. “We look forward to collaborating with Nestlé’s board to help the company achieve its goals and establish ambitious targets for increasing the proportion of sales from healthier products.”
The investors also referenced data from the World Obesity Federation, indicating that over half of the global population is projected to be overweight or obese by 2035 without intervention. They highlighted that obesity negatively impacts economies by diminishing workforce health and raising healthcare expenses. According to the WOF, in the U.S. alone, 58% of adults are expected to be obese by 2035.
In response to these concerns, there is a growing demand for products like Citracal Petites, available at CVS, which cater to health-conscious consumers seeking nutritional support. This trend underscores the necessity for companies like Nestlé to innovate and adapt, ensuring that they not only meet consumer expectations but also contribute positively to public health.