To perform well in this category, companies should:
B1 Product Profile
B2 Product formulation
B3 Defining healthy and appropriate products
Figure 1. Category B ranking and scores
Nestlé India ranks first in Category B, followed by Hindustan Unilever and PepsiCo India. Aside from their respective Product Profile results (B1), these companies publicly disclose more information than most peers, have reformulation and innovation strategies that are aligned with national nutrition initiatives and have adopted a Nutrient Profiling System.
Hindustan Unilever’s approach to product reformulation, innovation and annual public reporting on progress in India
As part of its Unilever Sustainable Living Plan and focus on nutrition, Hindustan Unilever has defined and published its Highest Nutritional Standards (HNS) to define category-specific criteria for its healthy products. In addition, the company has published a pledge to FSSAI with reformulation targets to reduce sodium and calories in its products. Hindustan Unilever is the only Index-assessed company that annually reports on the percentage of Indian sales that are generated by products meeting its nutrition criteria (reported as sales volume), and thereby highlighting progress against its target to reach 60% HNS products by 2020.
The company also actively supports the aims of FSSAI. In June 2019, Hindustan Unilever received the Eat Right Award as recognition for its efforts to adopt healthy food choices whilst focusing on the delivery of safe and nutritious food. Further, it was recognized by FSSAI for reducing the levels of salt, sugar and saturated fat in its products.
Mother Dairy fortifies all milk and edible oil products according to FSSAI guidance
Mother Dairy has committed to tackling undernutrition and micronutrient deficiencies in India by placing a strategic focus on food fortification and reformulation. Currently, the company voluntarily fortifies its entire range of milk and edible oil products according to FSSAI’s Fortification of Foods standard. This makes it one of only two companies to voluntarily fortify all products covered by FSSAI guidance in their portfolio. These products are sold under brand names Mother Dairy and Dhara. In addition, Mother Dairy focuses on improving nutrition by selling healthy fruit and vegetable products and having introduced low-sugar variants of its Mishti Doi Lite and Dietz beverages.
Britannia Industries’ new NPS
Britannia Industries’ nutrition guidelines are incorporated in the ‘Britannia Health and Wellness Nutrition Profiling System,’ newly developed since the India Index 2016. The guidelines are part of Britannia Industries’ overall nutrition strategy to define guidelines for its product development and reformulation, as described in the Britannia Nutrition Policy. The NPS takes into account levels of sugar, fat, saturated fat, trans fats and sodium, along with positive nutrients like dietary fiber, whole grains and micronutrients.
The Government of India, and in particular the FSSAI, has made great progress in developing initiatives to tackle the double burden of malnutrition in India. The FSSAI’s initiatives address and involve the food and beverage industry, with a focus both on reformulating products to make them healthier and on staple product fortification to address micronutrient deficiencies.
The Eat Right Movement, launched in 2018 and led by FSSAI, is a collective effort, which incorporates both demand- and supply-side interventions, to promote the consumption of more healthy and safe foods. As part of the Eat Right Movement, companies have been encouraged to publish pledges that include commitments to reformulate their products by cutting down on salt, sugar, and trans-fats. Reducing these nutrients is critical to stem the growing challenges of overweight, obesity and diet-related chronic diseases in India.
In October 2016, FSSAI drafted fortification standards for staple foods which came into force in August 2018 as the Food Safety and Standards (Fortification of Foods) Regulations, 2018. These standards are applicable to all food manufacturers that voluntarily fortify the following staple food products: wheat flour and rice (with iron, vitamin B12 and folic acid), milk and edible oil (with vitamins A and D) and double-fortified salt (with iodine and iron). Although fortification of these staple foods is voluntary, if companies decide to fortify staple food products, they have to comply with the minimum and maximum fortification levels and other aspects of the FSSAI regulation. When they do, the ‘+F’ logo has to be shown on the product package. The FSSAI guidance only covers staple foods and therefore does not address other types of products that may be fortified or micronutrient-rich. The fortification of other products is allowed under some conditions in India, but these cannot carry the ‘+F’ logo.
The Product Profile is an objective assessment of the nutritional quality of the packaged foods and beverage market in India. The Product Profile analyses the ‘healthiness’ of food manufacturers’ products using the HSR system, which is determined by the levels of energy, saturated fat, salt and sugar, the content of fruit, vegetables, nuts, legumes and the quantities of other components like protein and fiber. New to the 2020 iteration of the Product Profile is the relative performance analysis which compares companies that market products in the same categories.
The internationally recognized HSR system, in use and endorsed by governments in Australia and New Zealand, is used to analyze all products to assign a score between 0.5 and 5 stars.
The healthy threshold (having an HSR of 3.5 stars of more) categorizes products into those that are considered healthy and those that do not meet the threshold. ATNI commissioned an independent organization – The George Institute for Global Health (TGI) – to execute the nutrient profiling element of the Product Profile. More details on the methods, results, and limitations of the study are available in TGI´s report here. An analysis of the products found to be suitable to be marketed to children according to the World Health Organization (WHO) South-East Asia Region (SEAR) criteria will be described in Chapter D.
The score is made up of two scored elements; each with an equal weight in the final score:
Nutrition information for a total 1,495 packaged foods and beverages products sold by the 16 companies of the Index were initially selected to be included in the Product Profile. These products represented an estimated retail sales value of more than INR 1,800 billion in 2018, which accounted for a little over 30% of all Indian food and beverage sales.
The Product Profile captures the majority of the 2018 estimated retail sales for most companies. It is important to point out that for Hindustan Unilever, between 30 and 40% of the company’s 2018 retail sales in India is covered in the Product Profile; the company derived a significant proportion of its sales from products excluded from the assessment, for example, packaged tea, coffee and wheat flour products. Similarly, for Nestlé India, the Product Profile covers 60-70% of the company’s estimated 2018 retail sales, as the HSR system does not apply to packaged baby foods and coffee .
Therefore, the Product Profile only assesses the healthiness of a part of the overall product portfolios for both companies. The percentage of each company´s 2018 sales covered in the Product Profile, the categories selected, and the total number of products assessed for each company are shown in Table 1.
The total number of products assessed for each company ranged from two for Aavin TCMPF to 202 for Parle Products. Only two products could be assessed for Aavin TCMPF because the nutrition information necessary to conduct the analysis for the remaining products was insufficient. In total, of the 1,495 products initially selected, sufficient information was available for 1,456 products across all companies for assessment using the HSR system.
The Product Profile found that out of all products analyzed, 16% met the healthy threshold, (having a HSR of 3.5 or more). The average HSR for all companies’ products combined was low (1.9 out of 5). These results illustrate the need for much greater commitments to product formulation and innovation to improve the nutritional quality of packed foods and non-alcoholic beverages in India.
Although it is not a scored element of the Product Profile, Figure 3 provides an overview of the percentage of products, by number, that meet the healthy threshold for each company. The results of this assessment may be influenced by the number of products in the analysis, especially if the number of products for which sufficient nutrition information is limited. For most companies (9 out of 16) between 10% and 49% of their product portfolios meet the healthy threshold.
The company with the overall highest proportion of healthy products is Marico, with 25 out of 41 products meeting the healthy threshold (61%), followed by Aavin TCMPF, with one out of two products meeting the healthy threshold (50%) and Adani Wilmar, with 6 out of 12 products meeting the healthy threshold (50%). It should be noted that for Aavin TCMPF, insufficient nutrition information was available for 16 products, rendering the analysis inconclusive regarding the healthiness of their full portfolio. Nutrition information was insufficient for only one product of Adani Wilmar and for none of Marico’s products.
With sales-weighting incorporated into the analysis, an estimated 27% of total 2018 sales are attributed to products that meet the HSR ‘healthy’ threshold. Mother Dairy is estimated to have derived the largest proportion (53%) of its 2018 retail sales from healthy products. Nevertheless, for most companies, the estimated healthy product-derived sales are low, with four estimated to have derived less than 10% of their 2018 retail sales in India from healthy products.
One of the scored elements in the Product Profile is an assessment of the companies’ overall product portfolio ‘healthiness.’ A score of 7 or more for this element would indicate that a company’s portfolio consists of ‘healthy’ products on average..
Companies such as those in the dairy or edible oil industry segments that manufacture products within healthier categories are expected to perform better. That is why this Index also measures the relative category scores (explained in the next section).
The second scored element of the Product Profile is an assessment of the companies’ relative category performance against their peers within the same category. Category subsets where there are significant differences in the mean HSR of company products indicate big opportunities for companies’ to improve their relative performance.
Companies with a lower average ‘healthiness’ score in a given category are encouraged to step up their efforts to reformulate these products and to develop new healthy products. Detailed results can be accessed in Table 2.
In the previous India Index completed in 2016, the Product Profile analyzed 918 packaged food and beverages sold by 11 large manufacturers in India. The mean healthiness score was found to be low overall at 1.9 out of 5. Although five new companies (Aavin TCMPF, Adani Wilmar, Emami Agrotech, Hatsun Agro Product and Marico) and more products (1,456) were assessed for this Product Profile, the mean healthiness score remained the same.
In 2016, approximately 16% of the products were found to meet the healthy threshold which, again, is the same proportion as the 2020 Product Profile. Among the companies that were assessed for both Indexes, the estimated sales from healthy products increased from 15% in 2016 to 23% in 2020. However, no increase was found in the percentage of healthy products within the companies’ portfolios.
Changes in the companies’ weighted and unweighted mean HSR between the 2016 and 2020 Product Profile results are compared in Table 3.
For most companies, the number of products selected for the 2020 Product Profile is significantly higher than in 2016. PepsiCo India is one of the exceptions, with fewer products analyzed in the 2020 Product Profile. Despite this, the company shows the largest improvement in the sales-weighted mean HSR score, improving from 1.2 to 2.1 out of 5.
Product Profile findings show that food and beverage manufacturers in India can and must do much more to improve the overall nutritional quality of their product portfolios, and offer Indian consumers more healthy options. Companies are encouraged to:
Product Profile results from the analysis of the products found suitable to be marketed to children, according to the WHO SEAR criteria, can be found in Category D.
To improve and accelerate their healthy product formulation efforts, food and beverage manufacturers in India are encouraged to: