Many Nestle foods miss nutritionists’ ‘healthy’ rating

Nestle leadership says more than a third of its sales missed an independent definition of “healthy” as the term applied to a nutritional rating test across its product portfolio.

The finding, released as part of its 2022 annual report, showed Nestle has room to improve as the company aims to be the top health and wellness food company. Nestle reported Tuesday that 30% of the Swiss company’s portfolio is considered healthy, with 35% of it deemed unhealthy, according to the independent Health Star Rating system.

The remainder of its portfolio comes from pet food, infant formula and medical nutrition products, which were not tested because the products are designed to meet specific goals such as aiding kidney function.

Food companies have been under pressure to report the nutritional value of products in accordance with independent government-approved measures, rather than internal metrics, even though the industry has not settled on a single scale.

Nestle decided to use the Health Star Rating system, widely used in Australia and New Zealand, which rates products on a sale from half a star to five stars. A score of 3.5 stars or above is considered healthy.

ShareAction, an investor campaign group which has been pushing Nestle for more transparency, welcomed the new reporting, though urged the company to improve its ranking.

“As one of the biggest food and drink companies in the world, Nestle has an outsize influence on what people eat and drink,” said Holly Gabriel, a ShareAction campaigner. “What this disclosure worryingly shows is the company is still far too reliant on the sale of less healthy food and drink products.”

The ratings are based on the product’s energy, saturated fat, total sugars, sodium, protein, dietary fiber and fruit, vegetable, nut and legume content. Products like confectionery or salty sauces score lower on the scale, while low fat, low salt and low sugar items including plain coffee and waters score higher.

The increased transparency helps investors understand how exposed companies are to efforts to curb obesity, for example through advertising bans. It also amplifies the pressure on companies to reformulate products to make them healthier.

While Nestle has room to improve, the majority of Nestle’s sales wouldn’t be in the crosshairs of anti-junk food legislation because they are pet food or products like infant formula, or considered relatively healthy.

Rivals Danone and Unilever already report on their portfolios in accordance to the Health Star Rating.

Danone said that in 2021 about 90% of its products by sales volume got a Health Star Rating score of 3.5 stars or above. Only 17% of Unilever’s nutrition and ice cream portfolio reached that standard the same year.

Nestle has been reformulating products like Nesquik to contain less sugar in some markets, but CEO Mark Schneider told analysts earlier this year that reporting on nutrition does not mean the group would turn away from products like KitKat bars and Smarties.

“We’re not interested in a target on how the healthier parts of the portfolio would outperform the other parts of the portfolio,” he said. “We want to succeed in both.”

Nestle said the study covered 97% of its revenue, excluding some products that aren’t foods or beverages as well as some recent acquisitions. In 2003, the company opened a 325,000-square-foot production facility in Jonesboro, where some of its “top-performing” brands are produced, according to Nestle.