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Sugar means margins

Sugar means margins

The sweetest foods bring the highest profits for food companies

The most profitable food companies sell the most high-sugar foods, Tortoise has found. 

Two fifths of the products sold by the biggest food companies in the UK contain such high levels of sugar that they should be coded red under voluntary front-of-pack labelling scheme, our analysis of the output of the 30 biggest UK food producers shows.

Nearly 86 per cent of Mondelez’s product sample, weighted by sales, have enough sugar to need a red label. The figure is 80 per cent for Mars UK products and 50 per cent for Nestlé.

Red labels identify products that have more than 22.5 grams of sugar per 100g, or 27g of sugar in a serving over 100g. The analysis of a representative sample of products was conducted for the Tortoise Better Food Index, which scores the 30 biggest food companies in the UK on a range of sustainability metrics. 

By the numbers:

  • 30 – percentage share of products with red sugar labels in sample portfolios from companies in the index with high profit margins. The figure is 7.3 per cent for companies with low profit margins.
  • 96 – percentage of ingredients accounted for by sugar in Polos, made by Nestlé. (Nestlé also offers sugar-free Polos.) 
  • 35 – grams of sugar per 100g in Crunchy Nut, Kelloggs’ best-selling cereal.
  • 48 – percentage share of products sold by companies in the index that contain added sugar.

Mhairi Brown, policy lead at Action on Sugar, a campaign group, said: “These companies have relied on high sugar as well as high salt and high fat for so long, because they are cheap to make, convenient and have a long shelf life – despite a wealth of evidence of the impact that sugar is having on health.”

Twenty-six per cent of adults in England are obese and a further 38 per cent are overweight. Research suggests the consumption of ‘free sugars’ – including sugary drinks – is a major factor in the rise of obesity.

A Mars UK spokesperson said the company recognises its responsibility to ensure its consumers know they should enjoy its products as a treat and as part of a healthy and balanced diet. They added that Mars UK offers a Triple Treat range with 75 per cent fruit and nuts, which meets the government definition of non-HFSS (not high in fat, salt and sugar).

Nestlé said it was “clear about its intentions to continue to grow the more nutritious part of its portfolio” and that “42 per cent of Nestlé’s UK sales are non-HFSS against 27 per cent of sales that are HFSS”.

Kellogg’s commented that the “number one reason people buy Crunchy Nut is for its taste”. It added that it voluntarily displays front-of-pack traffic light labelling on its boxes, and that many of its cereals, including Coco Pops, Special K Original, Rice Krispies and Cornflakes, are not considered HFSS. 

The cereal company recently lost a legal challenge against the UK government’s definition of HFSS foods, arguing that the milk and yoghurt should be considered in assessing the nutrition of the cereal. In 2017 it funded research aimed at undermining official warnings about sugar consumption, according to the Times

Last October, the government introduced regulations restricting promotion of HFSS foods from key locations such as checkouts and the ends of aisles in large retail stores. But restrictions on advertising unhealthy food were delayed to 2025.

Food companies are coming under increasing pressure from institutional investors, who fear the companies’ reliance on unhealthy foods poses “systemic risks” to financial returns.

Further reading: scientific study of sugar’s impact on human health is a slow-burn story that could still boil over. Find out more about the background here. Read up here on past industry efforts to influence debate on sugar and coronary heart disease.