Transforming Ultra-Processed Food Brands to Good Growth

The post-pandemic rise in the cost of living and interest rates has elevated the challenge faced by average families to keep healthy food on the table. While we may debate the breadth of demand for, or even understanding of what constitutes, “healthy food”, we can’t avoid the fact that fresh fruit and veg and home-cooking involve shorter shelf-life ingredients, more time and higher cost. A frozen pizza can be a fraction of the cost of a home-made one. It is difficult to provide healthy meals for a family if you can’t afford it.

Families are increasingly relying on pre-made, longer shelf-life, artificially flavoured, cheaper processed foods, many of which are classified as Ultra-Processed Foods (UPFs). The term UPF comes from the Nova food classification system developed by researchers at the university of São Paulo in Brazil. This system places foods in four categories, based on how much they have been processed. UPFs typically have five or more ingredients, tend to include many additives and ingredients that are not generally used in home cooking, such as preservatives, emulsifiers, sweeteners and artificial colours and flavours, and generally have a long shelf-life.

Does this matter?

These UPFs contain high levels of saturated fats, salt and sugars, they contain industrially-produced edible substances, they have lower nutritional value, replace healthier calories and stimulate our brain to want to eat more. Not great for heart, gut and dental health, a contributor to the increase in obesity, flying in the face of the advice on a healthy diet from WHO, the UK NHS and any other country’s national medical body.

What’s the business issue?

Many UPFs form the basis of large, successful brands, which have been good for profit and shareholder value. However, since business writer John Elkington coined the expression Triple Bottom Line in 1994, TBL has become an aspirational accounting framework in which companies evaluate their performance against Social (People), Environmental (Planet) as well as Economic (Profit) criteria to express their value. It would be difficult to argue that UPFs include long-term health value for People and, given the supply chain of saturated fats and other ingredients, for Planet. However, with their Profit positives, how do companies transform them to address these People and Planet negatives to create broader sustainable TBL value?

And the answer…?

Well, the first thing is to recognise that transforming these products/brands to Good Growth in which there is identifiable TBL value is not easy. It is also not helped by questioning the motivation of the people who created the products. However, transformation must be possible. This transformation is likely to involve every element of the value chain – supply, production, marketing and go-to-market models. The transformation process is likely to involve all functions within an organisation. The identification of alternatives, assessment of implications, timelines and creation of model options will take calm and challenging heads, before brave leadership decisions.

And the risk…?

Well, the biggest risk is doing nothing. Concern around UPFs and how to manage them is on the rise, with headline messages like “Label ultra-processed foods ‘addictive’ to tackle obesity, say scientists”* and “Start treating ultra-processed food like tobacco”**. There is an excellent book, “Ultra-Processed People: Why Do We All Eat Stuff That Isn’t Food…and Why Can’t We Stop? by Chris van Tulleken, highlighting the issue. (Incidentally, you do not need to read the whole of Chris’s book to get the message.) People and our planet keep suffering, legislation may force a change, or cessation, of sales, consumers may just stop buying, with irreparable damage to profit and company reputation. Voluntarily transforming these UPF brands carries a short-term risk of impact on profit, but a longer-term gain in corporate reputation and TBL value.

The time to grab this transformation nettle is now – please contact Oxford to discuss your options.

* Eleanor Hayward – The Times, October 10, 2023, ** William Hague – The Times, June 20, 2023 

About the author

James is experienced in Marketing and Business Leadership and as well as Facilitation and Consulting and strongly believes that the best answers come from within teams.