New nutrition index pushes food companies to do better

By March 13, 2013 2 Comments

Accesss to Nuttrition have just published their inaugral Nutrition Index which ranks food companies according to improving nutrition. It is a thorough piece of work which takes the nutrtional value of companies’ products, the availability the availability of those products, corporate strategy, marketing practices, and product labelling into account.

I think this is great. The index will help consumers to buy more nutritious food and it will put pressure on the food companies to raise their game. I’m particularly enthused by the fact that thirty nine investment organisations managing more than $2.6 trillion in assets have signed a statement in support of the index. Even if companies don’t want to do the right thing for the right reason (i.e. in support of world health) then the pressure from shareholders and consumers should get them moving in the right direction.

Time will tell whether companies that score well in the index perform better on the stock market too, but I think there is a good chance they will. I have seen small scale studies showing that companies who rate highly on corporate social responsibility (CSR) generally have started getting rated more highly by analysts over the last five years, and I think this index is more powerful than bland CSR stats.

The bigger driver of share price will for these companies will, of course, be how well their products fare in the market, and here I think the trends are positive too. To make a very broad generalisation, in food and many other areas the 21st century consumer’s basic needs are sated and she or he is now increasingly looking to buy from companies that go beyond provision of goods and services to help them live a better life. In the case of food that means choosing to buy from brands that show they care about nutrition.

I think this is an important trend for startups to get their heads around. Taking the argument to it’s logical conclusion the successful consumer companies going forward will be the ones that think and care about the well being of their customers above and beyond the basic process of selling them goods and services. ‘Well being’ and ‘a better life’ are very broad statements, and I think the key will be understanding what consumer wants out of life and helping them to get there, across the full range of things that people are interested in. Eating better, getting healthier, sustainable sourcing and having better relationships are four obvious areas, but the full list includes the myriad of niche interests that people pursue. These niche interests might be good places for small companies to get started.