Nestlé, the global food and beverage company, has announced significant changes to its reporting practices, aiming to provide investors and the wider market with a clearer picture of the healthiness of its sales.
Aligning with the Access to Nutrition Initiative
The company will now provide additional data aligned with the scope of the Access to Nutrition Initiative (ATNi), starting with its next non-financial report. This move is expected to enhance transparency and accountability, enabling stakeholders to better understand the make-up of Nestlé’s sales and the healthiness of these sales.
Introducing a Sales Weighted Average Metric
Nestlé will also introduce a “sales weighted average” metric for both specific product categories and its entire portfolio. This metric will provide a more comprehensive view of the company’s sales and help investors gauge the overall healthiness of its offerings.
Continuing to Use the Health Star Rating System
The company will continue to use the Health Star Rating (HSR) system, endorsed by governments in Australia and New Zealand, as the basis for its nutrition profiling. This system provides a standardized way of measuring the nutritional value of food products and will help ensure consistency across the company’s reporting.
Product Exclusions and Breakdowns
Nestlé will continue to report separately on its specialized nutrition, pet care, and pure coffee product ranges, but it will also provide a breakdown of the healthiness of its remaining sales, in line with ATNi guidelines. This will enable investors to better understand the diversity of the company’s offerings and the proportion of healthy products in its sales.
Transparency and Accountability
ShareAction, a lobby group, has welcomed Nestlé’s decision and highlighted the importance of transparency and accountability in the company’s reporting practices. ShareAction stated that investors want to see Nestlé set an ambitious target to sell more healthier food and that the company’s commitment to this goal will reassure investors and stakeholders.
- ShareAction highlighted the need for Nestlé to increase the sales of more nutritious products, with a target of increasing sales by SFr20-25bn ($24.22-30.28bn) by 2030.
- The company’s current reliance on less healthy products has been a subject of criticism, with ShareAction arguing that it is “still far too reliant on the sale of less healthy food and drink products”.
Previous Criticisms and Challenges
In the past, ShareAction has criticized Nestlé’s reporting practices, arguing that the company has not followed the HSR guidance on what products should be excluded from its reporting. Specifically, ShareAction has raised concerns over the classification of certain products, such as coffee and baby foods, as nutritious, despite these items not being subject to government-endorsed nutrient profiling models.
Commitment to Change
Nestlé has committed to changing its reporting practices, with a clear plan to increase the sales of more nutritious products. The company’s commitment to this goal will be reflected in its reporting practices, providing investors and stakeholders with a clearer picture of the healthiness of its sales.
Increased Transparency
Nestlé’s decision to provide additional data aligned with the scope of the ATNi and to introduce a sales weighted average metric will increase transparency and accountability in the company’s reporting practices. This will enable stakeholders to better understand the diversity of the company’s offerings and the proportion of healthy products in its sales.
Example: KitKat and Maggi Sauce
Nestlé’s sales of KitKat chocolate and Maggi sauce, two of its most popular products, will be reported separately. However, the company will also provide a breakdown of the healthiness of its remaining sales, in line with ATNi guidelines. For example, products with a Health Star Rating of 3.5 and above made up 38% of Nestlé’s net sales in 2024 without pet care and non-food products.
| Health Star Rating Range | Net Sales Percentage Without Pet Care and Non-Food Products | Net Sales Percentage With Pet Care and Non-Food Products |
|---|---|---|
| 3.5 and above | 38% | 20% |
| 1.5-3.5 | 20% | 16% |
| Below 1.5 | 21% | 17% |
Nestlé’s Ambitious Target
Nestlé has set an ambitious target to increase the sales of more nutritious products by SFr20-25bn ($24.22-30.28bn) by 2030. This target is expected to drive the company’s transformation towards a more balanced portfolio of healthy and nutritious products.
Conclusion
Nestlé’s decision to increase transparency and accountability in its reporting practices is a positive step towards a more balanced and nutritious portfolio of products. The company’s commitment to this goal will reassure investors and stakeholders, and its target to increase the sales of more nutritious products by 2030 will drive a transformation towards a healthier food industry.
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