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The bitter taste of sugar

Home / Hermes EOS Blog / The bitter taste of sugar

Rochelle Giugni,
11 June 2015
Social

Epidemic
We are in the middle of a global obesity epidemic. According to the World Health Organisation (WHO) worldwide obesity has more than doubled since 1980. As obesity rates increase, so does the risk of contracting a range of other serious conditions, including diabetes and cardiovascular diseases. The level of childhood obesity is particularly concerning. In 2013, 42 million children under the age of 5 were classed as overweight or obese.

Hidden sugars in processed foods are partly to blame. These include products that are – based on their calorie intake – labelled “healthy” when they are in fact high in sugar, such as fruit juices, sports drinks and some yogurts.

Another issue is the portion size of packaged products. Often what we expect to be one serving are actually two or more, facts which are only stated in very fine print on the back of the product label.

Consumption of a few of these processed foods a day can easily push you past the daily recommended sugar intake.

Response
Following a public consultation, WHO released a recommended guideline for daily intake of free sugars earlier this year. It strongly recommends that sugars should make up less than 10% of total daily energy intake, adding that if daily intake was further reduced to less than 5%, consumers could expect additional health benefits.

To tackle the problems caused by too much sugar, some countries – such as Hungary, France, Mexico and some US states – have introduced taxes on sugary drinks and/or junk food. The taxes are passed on to the consumer through higher prices in the hope that it will curb consumption of the products. The UK, Ireland and Canada meanwhile have taken another approach, restricting advertising of foods with high sugar content to children.

Pressure on companies
As a result, food and beverage companies have come under pressure to adapt to changing societal expectations.

For those acknowledging the issue, they have to consider their business strategy, labelling, marketing and advertising. Companies need to ask themselves whether they reposition their brand in healthier market segments. Do they reformulate current products or create new lines? How can they improve their product placement and labelling to make it clearer and more transparent? What other social initiatives can they undertake to address the obesity crisis?

In addition, we cannot forget that sugar is only part of the problem. The levels of fat and salt in food products also need to be reduced. Companies such as Nestlé and Unilever are on the right track, having nutritional strategies and targets in place to cut the sugar, salt and fat content of their products.

We will continue to talk to the companies we engage with about their nutritional strategies and how they can play a part in solving this costly crisis.

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Rochelle Giugni Rochelle Giugni works in Hermes EOS’ Business and Client Development team after previously engaging in the consumer goods and retail, financial services and utilities sectors. Prior to joining Hermes EOS, Rochelle worked for a prominent Australian-based corporate advisory firm providing transaction and forensic accounting services. She has worked extensively with distressed businesses and specialised in restructuring and corporate recovery, where she gained hands-on experience across sectors ranging from retail, property, hotel & leisure, agriculture & farming, through to banking & securities. Rochelle is a qualified chartered accountant and holds a degree in Commerce-Accounting and diploma in Business Administration from Macquarie University. She also holds the CFA’s Investment Management Certificate.
Read all articles by Rochelle Giugni

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