Big Food is in big trouble. Obesity rates have doubled since 1980 with consequences that have made the World Health Organization expand its definition of malnutrition to include the severely overweight.
Much of the blame for eating too much sugar, salt and fat is laid at the door of large food and beverage companies, such as Coca-Cola, PepsiCo and multinational food producers, including Nestlé, Kellogg’s, Kraft Heinz and Unilever.
The industry faces more regulation and several governments, including those of Mexico, France and the UK, have imposed measures that range from banning ads for sugary foods aimed at children to higher taxes on sugary drinks.
The companies also face a shift in consumer attitudes. Millennials in particular have been at the forefront of the drive for artisanal, local and tastier food. Big Food’s rate of sales growth has halved in less than a decade and relatively low profitability has made companies vulnerable to cost-cutting M&A.
Against this background, Peter Brabeck, for two decades head of Nestlé – as chief executive, then chairman – has stepped in with Nutrition for a Better Life. Nestlé is the world’s biggest food company, selling in 191 countries and employing 328,000 people. The 72-year old Austrian, who retired in April, has two aims in this book: the first is to explain why the industry got into its current position; the second to map the future of food being plotted by the Swiss group.
Rise of technology
Food and health are emotional subjects but the prose here seems deliberately dry. The early chapters are absorbing, especially the section chronicling the people behind big brands: John Harvey Kellogg and his brother William, chancing in the 1870s on water-swollen wheat grains as an alternative to bread for sanatorium patients; Julius Maggi of the eponymous stock cubes (now owned by Nestlé), who developed high-protein dry food aimed at factory workers; or Henri Nestlé himself, who pounded milk, bread and sugar to develop infant cereal.
The rise of technologies such as refrigeration and pasteurisation led to the processed food industry. After the Second World War it delivered “the continuous supply of high-quality food to widespread portions of the population”. In the 1970s, concerns grew about the environment and health.
Brabeck accepts that the food industry had to change but thinks it attracts unfair criticism, writing: “The fact that through the industrial production of food, the health of nations and the life expectancy of the widest sections of the population have been significantly improved, has been forgotten.”
By 2050, the world’s population aged 60 years and older is expected to total two billion – Brabeck believes it is key to develop foods that respond to advances in health sciences and understand “the active substances in daily food down to the molecular level. Through this complex scientific discovery process, new nutraceuticals will be developed – i.e. foods suitable for the treatment or prevention of disease”.
Nestlé has become the biggest investor among food companies into health sciences, with more than 5,000 scientists and researchers. The appointment of Ulf Mark Schneider, former head of Fresenius, a healthcare conglomerate, as Nestlé's new chief executive, shows an intention to develop foods formulated for people recovering from chemotherapy as well as fighting illnesses such as Alzheimer’s.
This high-tech path is a counterpoint to health food advocates who argue for a much simpler way to stay healthy: eat less processed food and more fruit, vegetables and grains.
People may have romantic notions about a diet of natural foods, Brabeck argues, but end up wanting convenience: “Industrially produced food in the context of customised diets for specific populations can provide clear health benefits over simple and seemingly ‘natural’ foods.”
The proof of Brabeck’s arguments will be in the pudding: Nestlé has come under pressure from an activist investor pushing for higher returns. Big Food sceptics will equally want to see that the growing convergence between food and pharma outlined in this book really does result in healthier food production.
Copyright The Financial Times Limited 2017