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F&B cos reduce sugar to target health-conscious customers

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MUMBAI: There’s never been a better time for fitness brands with the younger generation becoming more and more health conscious. With almost sedentary lifestyles, people are opting for healthier eating and exercise options to stay fit.

Brands are ensuring their communication shows their commitment to health but the challenge lies for brands that have stuck for a decade with high sugar and salt content and are now finding it difficult to change that perception.

The answer: either promote the product for its taste and goodness or alter its key ingredient to make it more appealing for the health conscious consumer. Recently, world’s largest food and beverage company Nestle announced that it will further cut the amount of sugar, salt and saturated fats in its products as it tries to improve the image of packaged foods.

The move may also be viewed as a safeguard measure by Nestle against the recently accounted sugar tax in the UK, wherein soft drink companies will now be required to pay a levy on drinks with added sugar. Nestle has Nesquik, Nestea and MILO in its drinks portfolio. The new tax was designed to curb rising levels of obesity in the UK. 

Nestle and its rivals (Mondelez and Mars) are under pressure from a shift in consumer preferences towards healthier food and away from processed products such as instant noodles and frozen pizza. The maker of KitKat chocolate bars and Maggi soups is responding with healthier products and is also moving into higher growth categories, such as coffee, pet care, bottled water and infant nutrition.

It also confirmed its commitment made in 2014 to reduce saturated fats by 10 per cent in all relevant products that do not meet World Health Organisation recommendations. Nestle chief executive Mark Schneider remarked, “The trend towards healthier foods is to be observed worldwide. Combining the convenience of packaged foods with healthy good nutrition, that is where our sweet spot is.”

Nestle spent 1.72 billion Swiss francs ($1.71 billion) on R&D last year. The company launched over 1000 new products last year to meet the nutritional needs of children and wants to further enhance products for kids with fruits, vegetables, fibre-rich grains and micronutrients. Reformulating recipes to make its products healthier is part of Nestle’s effort to keep its products attractive for consumers. This year it launched a new Milkybar white chocolate bar that has 30 per cent less sugar.

Although the F&B giant has decided to take the healthier route in UK, it wouldn’t come as a surprise if it decides to alter the ingredients in all its operating markets to reach more consumers. India has lately become the playing field of all major brands and the move may or may not be implemented here, as the Indian chocolate industry was worth Rs 78 billion at the end of 2016 and is predicted to reach Rs 122 billion with a compounded annual growth rate of 16 per cent by 2019.

According to the 2016 Euromonitor International report, the chocolate confectionery market in India is projected to grow at around eight per cent per annum between 2016 and 2021 to reach Rs 16,200 crore (on constant value) from Rs 11,256 crore in 2016, backed by better retailing across rural areas.

Given Indians’ love for sweets, whether or not global giants tweak their recipes here will not impact sales. A consumer in rural India will buy a product, regardless of the alteration of ingredients, because he has little knowledge about the health aspect. However, consumers in urban and metro cities are the ones who are cautious and tweaking the sugar and salt quantity is likely to get them to add the product to their basket.

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