09 July 2024
Can the mandatory reporting of healthy food sales be gamified?
Mandatory reporting of healthy food sales – Health metrics, methods, and gamification. What ought to be considered when landing on the best type of metric? Our Senior Project Officer Indu Gurung investigates.
The food industry wields significant influence over our diets, health and environment. However, the current food system is driving both health and climate crises, raising concerns about the social license under which food businesses operate.
Transparent reporting on the healthiness and sustainability of sales is therefore crucial for pinpointing areas of improvement and for driving informed business and policy decisions.
There are currently a very large number of existing, or soon-to-be implemented, corporate reporting regimes across the UK, Europe, and at a global level.
Regardless of the decisions the new UK Government makes on UK specific reporting demands, the direction of travel clearly points towards increasing requirements for large food and drink businesses to disclose and report on their progress towards more sustainable and healthy business practices.
In the UK, the Food Data Transparency Partnership (FDTP) is a partnership between government, industry and experts aiming to improve the availability, quality and comparability of data in the food supply chain to create a positive change in the food system.
The FDTP’s Health Working Group was at advanced stages of discussion on those healthy sales metrics that would be best suited for companies to report against before the July election was called.
As part of our Plating Up Progress (PUP) benchmark, we assess 29 major UK operating food businesses on their progress towards supporting healthy and sustainable diets. One of the indicators we look at in as part of PUP is whether companies are disclosing data and setting sales-based targets for sales coming from healthier food and drink vs. less healthy ones.
In light of the critical need for the new government to resume its work on standardised reporting for large food businesses post-election, the following blog uses 2023 PUP analysis to highlight the range of health targets and methodologies currently employed by those companies who are already disclosing healthy sales data.
A consistent set of metrics for businesses to report back against is critical for ensuring standardisation. In the following blog we have outlined what healthy sales metrics those companies leading the way in disclosure (mostly retailers) currently report back against in a voluntary capacity, looking at the pros and cons of each.
Easy starting point for businesses: Assessing the proportion of own-brand food and drink products is a straightforward way for businesses to begin evaluating their product portfolio.
Not sales-based: Since this metric isn’t directly tied to sales, it may not accurately reflect consumer purchasing behaviour across the entire product range.
Increasing healthier own-brand products: Companies can gamify their approach by focusing on increasing the proportion of healthier products within their own-brand offerings only.
Balancing with unhealthier branded goods: Simultaneously, they can increase sales of less healthy branded products.
Incentives sales of drinks: Companies could promote and increase sales of healthier drinks like water or diet coke
- Asda
- Coop (disclosure only)
- Morrisons
Available data: The data on own branded goods should be easily available and can help companies target healthier product sales.
Doesn’t reflect the portfolio: It doesn't reflect the full picture of a company’s portfolio which includes many branded goods and may not indicate consumer purchases across the entire range offered.
Incentives sales of drinks: Companies could promote and increase sales of healthier drinks like water or diet coke and increase healthier options within own brand goods while also increasing sales of unhealthier branded goods.
- Aldi
- Iceland (disclosure only)
- Waitrose
Granular insights: Provides sale figures coming from healthy vs less healthy food across the whole portfolio, which is important if the company sells both branded and own branded goods. This offers insights into consumer purchasing patterns based on the types of products sold.
Equal weight measurement: Ensures a fair assessment across all products regardless of the unit type. For example, whether selling a 6 pack of yogurt (6x100g) vs a larger tub (1kg), the metric captures the total weight. If the metric used units rather than tonnage, both type of yogurts would be classified as 1 unit regardless of their actual weight and the impact on the consumer’s basket.
Data availability: Some companies lack robust databases to capture accurate sales data by tonnage, which can hinder reporting.
Out of Home (OOH) sector challenges: Reporting tonnage for the OOH sector (e.g., restaurants, cafés) is particularly challenging due to the lack of data infrastructure.
Promoting healthier drinks: Companies can gamify this metric by prioritising the sales of "healthier" beverages such as water or diet soda over whole foods due to the weight of beverages.
OOH Sector Incentives: In the OOH sector, offering free salads or healthier sides (even if not always consumed) could encourage healthier options.
- Lidl
- M&S - only stock own branded goods
- Sainsburys
Direction of progress: Gives a general direction of progress and figures coming from healthy vs less healthy food across the whole portfolio.
Easier: It is easier to measure than tonnage.
Inaccurate data: Products are available in different packages (1l vs 6 packs) which could skew the data and may not be a true indication of consumer purchases.
Incentives smaller units: Could be achieved by selling more 'healthier' drinks e.g. water, diet coke and products which have higher units but not in volume (sell 6 packs of small portions of yogurt vs 1 large tub)
Tesco (unit volume sale)
Understandable and available: Measuring sales in units can give a general direction of progress and is easier to measure than tonnage.
Measurement: It may not be a true indication of consumer purchases as it doesn’t account for weight or volume of product as it doesn’t reflect the serving size of products.
Vulnerable to economic factors: Data can fluctuate due to inflation and wider geo-political and economic impacts
Commercially sensitive: Sharing revenue sales data could be sensitive information businesses are not willing to share publicly.
Pricing strategy: Companies could adjust the prices of healthier products or decrease prices of less healthy products.
Not a comprehensive indicator: It doesn’t show change in healthier sales overall, thus not an indicator for healthier products as it doesn't reflect the serving size of product
N/A
The targets for healthy sales of own-brand products are often much higher than those that include both own-brand and branded goods, making accurate comparisons difficult and allowing branded goods to escape scrutiny.
Lidl for example, have a target to increase sales, based on tonnage, of healthy and healthier own brand products to 80%. This contrasts to Tesco, who have a 65% target for sales, based on tonnage in units, of healthier products for both branded and own brand products.
Currently, there is no consistent approach to reporting sales of healthier foods for those companies who do disclose data.
- Two retailers (Sainsbury’s and Tesco) currently disclose data and have set targets on sales of own brand and branded goods. However, Sainsbury’s report their total sales in tonnage whereas Tesco report the unit volume of sales.
- Five retailers disclose data only on sales of own brand goods, with four retailers having set targets for these.
- Two retailers disclose data only on the proportion of their own brand goods which are ‘healthy’.
|
Company |
Models |
Inclusion |
Exclusion |
|
Aldi |
NPM |
•Own brands only |
•Branded •Alcohol |
|
Asda |
Not specified |
•Own brands only |
•Branded •Alcohol |
|
Co-op |
NPM |
•Own brands only |
•Alcohol |
|
Iceland |
NPM |
•Own brands only |
•Branded •Alcohol |
|
Lidl |
NPM |
•Own brand only |
•Branded •Alcohol |
|
M&S |
NPM |
Sell own branded goods only |
•Alcohol |
|
Morrisons |
NPM |
Own brands only |
•Branded •Alcohol |
|
Ocado |
No target as of 2023 |
||
|
Sainsburys |
Own criteria & NPM |
•Own brand only & branded |
•Alcohol |
|
Tesco |
NPM |
•Own brand & branded |
•Alcohol |
|
Waitrose |
Own criteria |
•Own brand only |
•Alcohol |
Types of nutrition profiling models used
At present four different health profiling models are used by retailers, manufacturers and the out of home sector, to categorise foods as healthy or less healthy, all of which have different strengths and limitations. The 2004/5 nutrition profiling model (NPM) developed by the Food Standard Agency is the model used by most of the retailers. It's a more holistic model compared with the traffic light system (TLL) as it considers positive nutrients such as fibre, aligning with the total diet approach. TLL focuses on negative nutrients but it’s more nuanced showcasing the quantity of calories, fat salt and sugar. This model is preferred by the OOH sector and deemed to be easier for SMEs to use compared to the NPM given familiarity with the TLL system for food labelling. The Food (Promotion and Placement) Regulations encourages companies to reformulates their products to be healthier but doesn’t showcase the incremental changes to its binary results. Lastly, some companies choose to create their own criteria for food and drink, which could potentially be either more rigorous or stringent than other models or less, and makes is difficult to compare across different companies.
Based on our analysis the gold standard for a healthy sales metric ought to be for businesses to disclose the proportion of total food and drink sales by volume (tonnage) annually, that is made up of healthier products, aligned to the Government-endorsed NPM.
