Nestlé is aiming for bigger reductions in salt, sugar and saturated fats in its processed foods beyond what it has already announced, according to Reuters. The company said its goal is to cut sugar by an additional 5% beyond the approximately 34% cut made since 2000, and that salt would be reduced by 10% in addition to the 20% reduction achieved since 2005.
The Swiss food company also said it would cut saturated fats by 10% in any of its products which do not meet levels recommended by the World Health Organization.
Mark Schneider, Nestlé's CEO, told journalists during a May 15 briefing that that company was putting significant resources into the initiative and spent about $1.71 billion on research and development last year. "The trend towards healthier foods is to be observed worldwide," he said in the Reuters article.
Consumers are increasingly seeking out better-for-you foods, many of which include less salt, sugar and saturated fats. Nestlé and other large CPG firms are well-aware of the trend. Food companies know that if they don't improve their existing product line, they will lose market share to competitors who will.
Since many people view processed foods as less healthy overall, the onus is on manufacturers to achieve these reductions and reflect them in cleaner and more transparent labels that will make them stand out to consumers, as well as bolster sales.
Nestlé has committed significant capital toward these reductions. Building on the momentum makes sense now because its business is international, and, as its CEO noted, the trend away from sugar, salt and fat is worldwide. Nestlé appears to be taking a gradual approach toward its reduction of salt, sugar and added fat. It may be a smart move because the company can make an initial commitment, follow through on it, and then reassess what to do next before making a public announcement.
To help reduce sugar in its products, Nestlé has engineered a way to restructure sugar so manufacturers can use 30% less without limiting the sweetness factor. It was used for the first time in the company's Milkybar white chocolate candy, which debuted earlier this year in the U.K. The Swiss company hasn't yet launched any products in the U.S. containing the new sugar.
Nestlé, which is known more for indulgent chocolate and other items like Lean Cuisine and Hot Pockets than for low-sugar, low-salt and low-fat products, could stand to gain business from consumers who are looking for health and wellness.
Reducing salt, sugar and saturated fat on a gradual basis, and altering formulations more slowly, also may help avoid negative customer response. That way, they may be less likely to reject the new product as not as tasty or flavorful as the previous one they're familiar with.
Indra Nooyi, PepsiCo's CEO, said at Beverage Forum in 2017 that companies need to be careful not to move too quickly and instead embrace a gradual step down.
“We have to make sure we don’t just launch these products and say, ‘Oh my gosh why isn’t the consumer drinking these?’ We have to nudge the consumer down,” she said. “The consumer’s taste buds have to get used to the new taste.”
Doubling down on the initiative, Nestlé is also focusing on foods and beverages for children. The company just debuted a "Nestlé for Healthier Kids" campaign offering programs and online services for parents and caregivers about the types of foods children should consume to meet their nutritional needs. Even though Nestlé is positioning itself as more of a health, wellness and nutrition company, it isn't leaving sugar, salt or saturated fat behind, but it also knows where the consumer is heading and how to position itself to play a bigger role.