Nestle Eyes Strategy Update Amid Criticism of Unhealthy Products

Nestle SA is working to update its nutrition and health strategy as the world’s largest food company faces criticism over unhealthy products.

Nestle is assessing its food and beverage portfolio against external nutrition profiling systems, such as Health Star Rating and Nutri-Score, that help consumers make more informed choices, the maker of KitKat chocolate said in an emailed statement. The project started this year and also involves a review of package labeling, nutritional information and portion guidance.

The Financial Times on Monday cited an internal company presentation that designated more than 60% of Nestle’s core food and beverage products as unhealthy. The document, which was circulated among top executives this year, said that some Nestle products will never be healthy no matter how much they’re tweaked, according to the FT. The analysis excluded categories like pet food, coffee and infant nutrition, which make up more than half of Nestle’s total revenue.

The Big Food industry, led by multinationals like Nestle, PepsiCo Inc. and McDonald’s Corp., has come under increasing pressure from consumers and governments in recent years to make healthier products amid rising obesity and diabetes rates. Global obesity has almost tripled since 1975, according to the World Health Organization.

Nestle has jettisoned its U.S. confectionery unit and put its ice cream business there into a joint venture. It also sold its Yinlu peanut milk and rice porridge businesses in China and 60% of the European meat-processing brand Herta. Under Chief Executive Officer Mark Schneider, the Swiss firm has shifted its focus to acquiring nutritional supplements and vitamins, as well as expanding its coffee and plant-based businesses.

The findings of the Nestle report weren’t surprising, but could point to even more portfolio changes to come, according to Jon Cox, an analyst at Kepler Cheuvreux.

“We have long argued that mainstream confectionery is not a particularly attractive category, given structural pressures,” Cox wrote in a note.

Schneider has said that indulgent food has a place in a healthy diet, as long as it’s consumed in moderation.

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