Neil Brown

Calling for a food and drink revolution

Neil Brown

As we all know, the road to healthy eating has many bumps and, if we’re honest, the odd diversion along the way. But as summer comes and people focus on getting fitter and healthier, we had a stark reminder this week of how far we have to go and the potential profits available for companies that can help get us there.

 

New research has revealed that less than a third of the products from leading food and drinks companies can currently be classified as ‘healthy’.The Access to Nutrition Foundation’s 2018 Index measures the efforts of the world’s largest food and beverage manufacturers to reduce ill health due to poor diets. This work covers 22 companies that generate an estimated US$500 billion in annual sales, whose products play a vital role in the diets of millions of people.

 

While the Index shows these businesses have stepped up their efforts in this area, analysis of more than 23,000 products reveals less than a third of these meet the Foundation’‘healthy’ criteria. The group has therefore called on the food and drink industry to improve the nutritional quality of its wares, particularly established, high sales volume items, as well as setting measurable targets to reduce levels of salt and sugar for example.

People are demanding more of the good and less of the bad from food and drink and we believe the theme of Delivering healthier foods represents a significant investment opportunity. Across our Liontrust Sustainable Future funds, we continue to focus on companies meeting these demands.

 

Wessanen for example is one of the leading sustainable food brands in Europe, manufacturing and distributing organic products such dairy alternatives, bread and biscuit replacements, vegetarian meals, breakfast cereals and hot drinks. The company’s brands include Bjorg, Zonnatura, Clipper, Tartex, Bonneterre, Whole Earth, Kallo, Alter Eco, Allos, Gayelord Hauser and Isola Bio.

 

But we also need improvements across all the brands we know and love. Reformulation is key here as consumers demand healthier and more natural ingredients with the same taste and value for money. This balance is difficult to achieve, which makes the success of our long-term holding Kerry Group all the more impressive.

 

This Irish company focuses on what it calls the ‘Three Rs’, reducing, removing and replacing the unhealthy or unnatural ingredients in our food and drink without compromising on taste or cost.

This recent researchcomes shortly after health officials in the UK called for a 20% cut to calories in our food products by 2024. They estimated that meeting this target could prevent 35,000 premature deaths and around £9 billion in healthcare and social care costs.

By accessing this theme through our funds, clients are able to support companies helping to deliver these much needed changes while gaining exposure to what we believe should be healthy financial returns.

 

Key Risks

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital.The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.

Some of the Funds managed by the Sustainable Future Equities team involve foreign currencies and may be subject to fluctuations in value due to movements in exchange rates.

Disclaimer

This content should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy.  It contains information and analysis that is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content of this document, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified. It should not be copied, faxed, reproduced, divulged or distributed, in whole or in part, without the express written consent of Liontrust. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing.

Friday, May 25, 2018, 3:45 PM