Nutrition has now entered the C-suite. Progressive food and beverage companies are demonstrating an increasingly sophisticated approach to managing health and wellness issues. Facing a world of 9 billion people, the prism through which food and beverage companies view health and wellness has expanded to include the impact of the supply chain on the health of people, animals and planet; rapidly increasing rates of obesity and noncommunicable disease; and the linkages between access to affordable, healthy food, social justice and global economic and political stability.
To manage these trends, companies have institutionalized the role of “Chief Health and Wellness Officers” in business strategy, corporate culture and governance. Debra Sandler, newly appointed chief wellness officer at Mars, Inc., Jonathan Blum, chief public affairs and global nutrition officer at Yum! Brands (operators of fast food’s Taco Bell, KFC and Pizza Hut) and Maha Tahiri, vice president and chief health and wellness officer at General Mills, are all examples of C-suite executives recently tasked with helping their CEOs navigate an increasingly complex operating environment. These new voices serve as catalysts and “positive disrupters,” helping harness changes in how consumers and societies approach nutrition and wellness into innovative strategies for delivering growth and enhancing reputation with stakeholders.
While the issues faced by these companies are similar, their approaches to addressing them vary and reflect their corporate brand and positioning. Nestlé S.A., has made nutrition the core of its corporate governance as early as 2003 with more aggressive moves made in recent years, under the leadership of Sanjay Sehgal, head of Nestlé’s Corporate Wellness Unit. Supported by a cadre of internal health and wellness champions, corporate leadership at Nestle has been publicly evolving their portfolio and rededicating efforts to a shared value mission of promoting health through food. This effort extends beyond product reformulations to ingredient sourcing to labeling as well as innovation in personalized nutrition.
Earlier in 2014, during the National Restaurant Association’s annual trade show, Yum! Brands’ Blum participated in a panel on nutrition with Michael Jacobson from the Center for Science in the Public Interest and noted that listening to stakeholders critical of the industry had been a driver of the company’s and industry’s evolution and commitments to improving food offerings through healthier choices and greater transparency through labeling. General Mills’ Tahiri has written that “the experience of food product developers suggests that the art of successful health improvements in food products involves a formula that combines health as a core strategy, a consumer-centric approach, significant resources, a long-term commitment, and patience. With the strategic imperative of these corporate officers in mind, here are ten issues health and wellness leaders are thinking about (or should be) right now:
1. Value Chain Activism. Stakeholders are becoming increasingly sophisticated in the way that they critique companies, evaluating and providing commentary on an issue across the entire value chain — taking farm-to-fork conversations beyond nutritional to societal impact and corporate governance. Oxfam’s “Behind the Brands” annual report is one example of how stakeholders are linking social and environmental supply chain risks to ingredients like palm oil and sugar that also carry human health risks.
2. Food Waste and Competition for Scarce Resources. Nearly one billion people are “food insecure” living in fear of hunger or uncertain about the availability of nutritionally adequate foods and a significant percentage of food is lost or wasted; addressing “waste” has business saliency as global competition among food and beverage companies increases for raw ingredients, water and arable land. Tesco has been an early leader on the issue speaking publicly about the role their global supply chain and presence can have in reducing waste and improving food security.
3. Food as Nourishment. Growth for most consumer packaged goods companies (CPGs) is through increased market share in emerging markets. Global CPGs have been accused of “dumping” unhealthy products that are more challenging to sell for policy reasons in developed markets into developing and emerging markets, rather than innovating in healthy products aimed at these growing economies.
4. Epigenetics, Nutrigenomics & Social Justice. Emerging science in nutrigenomics leads some experts to argue that exposure to foods in utero can have an impact on gene expression later in life. As understanding of this science evolves, some will argue that this gives greater credence to calls for increased regulation around ingredients, processing and labeling because a case can be made that highly processed and unhealthy foods are creating cycles of poverty and disease that begin before we are born.
5. Use of Issue “Advertainment” to Sell Food. Communication on “issues” is no longer segregated to “stakeholders”. With over 13.5 million YouTube views, the recent and controversial Chipotle Scarecrow advertisement took the issue of sustainability and supply chain to the masses with a highly emotive animated video designed to educate (and possibly activate) consumers about the value of ethically and sustainably raised and sourced proteins. By communicating these issues in a highly engaging, authentic and entertaining way, a new form of consumer directed issue advertising has been created.
6. Taxes, Warning Labels and White Packages. Public health advocates frequently draw a parallel between tobacco and packaged food and beverages, which are increasingly linked to increasing rates of obesity and noncommunicable diseases globally. Warning labels and taxation have been used widely on products containing tobacco and alcohol and some countries are already instituting similar policies for food and beverage. Policy entrepreneurs are now calling for experimentation with plain packaging on certain food and beverage products as has been used with infant formula and tobacco as a means of curbing consumption and limiting impact of marketing and branding.
7. Geopolitical Activism. Businesses are increasingly used as vehicles for geopolitical consumer activism. Consumer boycotts impacting companies operating in conflict zones are coupled with governments creating market entry sanctions on global companies selling “unhealthy” foods or using controversial production methods, ingredients or agricultural technologies.
8. Agricultural Colonialism. In an effort to assure a steady food supply, some governments and foreign companies are engaging in a land grab – purchasing arable land and agricultural producers in sovereign nations from which to import food and commodities. This can exacerbate food insecurity and stymie development of domestic markets, particularly in developing economies.
9. The War for Water. While climate change is bringing concern for safe access to clean water, criticism of companies’ role in water shortages, contamination and algal overgrowth from agricultural run-off is on the rise. Companies are being vilified for using clean, safe water to make a profit. A social movement that identifies the companies that make the most money from the sale of water is growing.
10. Global Regulatory Whack-a-Mole. The epicenter of progressive nutrition policy entrepreneurship and leadership is moving away from mature markets. Advocates in developing markets and emerging economies are challenging global corporate affairs functions, with the rapid passage of the Mexican soda tax and kid marketing restrictions as notable examples.
Looking ahead to 2015, evolving consumer tastes and increasingly demanding expectations of stakeholders mean that the for the food and beverage sector there is significant Return on Reputation for those that look beyond quarterly P&L and incorporate nutrition, health and wellness into their governance structure. We predict that as demand for lower calorie, health aligned and organic products continues to grow corporations that deliver on this demand and make efforts to align both their corporate strategy and governance around nutrition, health and wellness particularly through the leadership of an accountable individual or function will see expanded opportunities and decreased barriers to grow market share even in challenging markets.Melissa Musiker is a director in APCO Worldwide’s Washington D.C. office and is a Registered Dietitian whose work focuses on issues sitting at the nexus of agriculture, food, nutrition, health and wellness.
Julie Jack is a senior director in APCO Worldwide’s New York office. She has worked at the cross section of major social issues – including health, wellness and sustainable agriculture – and corporate responsibility for major food and consumer goods companies.