We present our analysis in three graphics
Company performance across multiple issues.
Future-fit companies need to be performing well across multiple issues, rather than focusing only on a few challenges.
Company spider diagram profiles are calculated from performance on metrics within each topic.
Click through to see each company’s profile against multiple issues. Scores closer to the outer ring of the graphic indicate better performance. We also include a potential profile for “2020 Leadership” which takes the best performance across the sector to illustrate what is possible for the sector.
Company focus on products vs supply chains.
Future-fit companies need to focus on developing their products and revenues and ensuring their supply chains are both aligned with a healthy and sustainable food system.
Companies are rated on two dimensions: Products and Supply Chains. Ratings for this are calculated from scores on specific metrics from our analysis that relate to healthy and sustainable products, and to sustainable and equitable supply chains accordingly. Companies should aim to be in the top right hand corner.
Hover over the data points to see how each company performs.
Company traffic light score across multiple issues.
Future-fit companies should aim for green lights across all issues.
Traffic light rankings are allocated from the same data used in the spider diagram profiles.
Click on each issue to see how companies compare on specific topics.
Each individual company scorecard can be downloaded below the three graphics, along with a sector summary.
None of the chains included in our analysis have public targets for healthy and sustainable food sales. Greggs however does have a target and performance data for sales of vegetables. Beyond this, any targets we did find were only partial, focusing on reducing salt or sugar, or only some menu sections. Most operators in this sector have at least trialled plant-based proteins or meat alternatives, but are yet to set meaningful targets. This is key for the sector given the reliance most have on meat and dairy, and sugary food and drinks across their menus.
Key investor asks on all companies operating here should be for targets across their entire menu, ideally sales-weighted, that show a shift away from foods that are high in fats, sugar and salt, towards fruit & vegetables, fibre-rich foods and for a proportionate increase in the sale of proteins that are plant-based.
Measurement and targets for scope 3 emissions are beginning to emerge, with McDonalds, YUM! Brands, and Restaurant Brands International either already taking steps or planning to map emissions and targets.
As with retailers, zero deforestation targets are generally strong for palm oil (although often focused on cooking oil rather than ingredients) but progress towards sustainable soy in animal feed is slow. There is a lack of focus on sourcing from farmers who make sustainable production practices the default, although most recognise the issue in some way.
While some businesses in this sector are engaging with their supply chain on water use, none have clear evidence of mapping sourcing and management from water-scare regions.
The majority have food waste metrics or reduction targets, but this focus does not extend to working with suppliers to reduce food waste across the supply chain. Again, the majority have made progress to reduce the use of plastics as the sector responds to public and investor concerns and pressure about these issues.
For a detailed analysis of the sector’s performance on animal welfare and antimicrobial resistance in livestock supply chains, see BBFAW.
Targets around living wages are weaker in this sector although corporate reports are keen to (rightly) emphasise other employee benefits as well. One exception is Greggs who state an aim that shop staff wages are above the national living wage. In the UK, none are signatories to the Real Living Wage initiative.
Similarly to other food sectors in this analysis, regarding human rights in their supply chains, businesses are working towards better understanding of human rights risks and mapping across their global supply chains, although concrete data on the % of supply chains being actively engaged, especially beyond tier one, remains weak.
Remarks on the impact of covid-19
Whilst all restaurant chains experienced significant negative impacts in the first few months of coronavirus lockdown, the example of the UK suggests that the ability of the quick service restaurant chains to recover is stronger than others (see our share price tracker). With the potential for ongoing growth in delivery services and potential safety advantages of quick service menus, investors looking to engage with companies in downstream food businesses should ensure that the pursuit of market growth or economic recovery does not come at the expense of businesses setting ambitious targets and reporting clearly on their transition to healthy and sustainable food.