Investors to pressure food and drink companies to create healthier food

A new Healthy Markets campaign will bring investors together to ask major food and drinks companies operating in the UK market to produce healthier, affordable products, limit marketing of sugary products to children, and provide clear and accurate food labelling.

ShareAction have partnered with urban health foundation Guy’s and St Thomas’ Charity for the campaign which aims to reduce the rising childhood obesity levels in the UK.

According to ShareAction, institutional investors recognise the risks that food and drink consumer goods companies pose in their portfolios. There is an increasing swell of political and public support for action in this space, with regulation already in place in the UK for sugary drinks and voluntary targets set for companies to reduce both sugar and calories across other product categories. With customer preferences shifting towards healthier and low sugar products, there are financial, reputational and operational risks for companies that fail to respond.

This is particularly evident in the sugary soft drinks market where the number of sugar taxes has tripled across the world, to 42, in the last four years. In 2018, AG Barr, a manufacturer of known UK brands such as Irn-Bru, completed a major reformulation programme to make 99% of products exempt from the UK sugar levy. At the same time, they had an 8.9% increase in sales and 6.4% improvement in gross profit.

Barbara Crowther, Co-ordinator of Sustain's Children's Food Campaign, said:

“In a context in which one in three children leaving primary school are overweight or obese, investors and shareholders can play an incredibly powerful role in championing business models based on healthier, less sugary food. From introduction of unhealthy food and drinks taxes to tighter advertising and promotions restrictions, any forward-looking, responsible company should now be looking to align its product ranges, recipes and marketing strategies towards healthier and more sustainable lifestyle options. This campaign provides a fantastic new platform for investors to play their part in helping transform the food environment for parents and children alike."