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Article • 21/02/2024

How FMCG Companies Reshape Brand Reputation as Consumers Demand Healthier Choices

artificial sweeteners

Companies in the Fast-Moving Consumer Goods (FMCG) sector navigate a well-trodden path of sugar-related health debates. Yet in 2023, they faced a slightly new set of challenges. This time, a widespread public debate arose on the health hazards of artificial sweeteners as sugar substitutes.

Global shifts, driven by sugar taxes and regulatory measures targeting health hazards in ultra-processed foods, drove companies to reformulate their products and rethink their reputation strategies. 

This collective shift sparked controversy in July 2023 when the International Agency for Research on Cancer (IARC), a branch of the World Health Organization (WHO), classified aspartame as ‘possibly carcinogenic to humans’.

As this revelation reverberated, the industry grappled with the intricate dance between health concerns and consumer choices, reshaping the narrative around artificial sweeteners and influencing the corporate reputation strategy of FMCG companies.

Regulatory Changes & the Rise of Artificial Sweeteners

In response to the increase in sugar taxes, companies globally reformulated products, replacing sugar with artificial sweeteners like aspartame and sodium saccharin. 

News articles published in 2023 covering sugar, saccharin, and aspartame in 2023.
News articles published in 2023 covering sugar, saccharin, and aspartame in 2023.

Aspartame, a widely used artificial sweetener, has been a staple in various food and beverage products since the 1980s. It is commonly found in a wide variety of consumer products: diet drinks, chewing gum, gelatin, ice cream, dairy products like yogurt, breakfast cereal, toothpaste, and medications such as cough drops and chewable vitamins.

The Delaney Amendment, part of the Pure Food and Drug Act, mandated that the U.S. Food and Drug Administration (FDA) refrain from approving any food additive with potential cancer-causing properties. As a result, the FDA banned saccharin in 1977. This decision was prompted by a Canadian study highlighting a connection between artificial sweeteners and bladder cancer in laboratory rats.

The FDA’s ban on saccharin had significant repercussions, particularly due to the absence of immediate alternatives for artificial sugar in the market.

This move faced resistance from the commercial sector, notably Coca-Cola Co., Inc., expressing disappointment as they produced several beverages labeled as “sugar-free.” Ironically, the ban on saccharin created a golden opportunity for the introduction and widespread production of aspartame – much in the same way that the efforts to reduce sugar intake created a golden opportunity for the increased introduction and usage of aspartame in more recent years.

Artificial Sweeteners Controversy Causes Spike in Negative Coverage

In July 2023, the International Agency for Research on Cancer (IARC), a branch of the World Health Organization (WHO), classified aspartame as ‘possibly carcinogenic to humans.’ This designation triggered a more than 200% surge in the mentions of aspartame in news articles when comparing the first and second halves of 2023.

The response to this classification was predominantly negative, marked by concerns about its potential health effects and its widespread presence in many commonly consumed foods and beverages.

Despite negative responses, industry groups such as the Calorie Control Council and the International Sweeteners Association staunchly defended nonsugar sweeteners. Major players like PepsiCo and Coca-Cola upheld their recipes, emphasizing the ‘preponderance of evidence’ supporting aspartame’s safety.

The debate over aspartame caused a spike in negative coverage in July 2023. (Signal AI)
The debate over aspartame caused a spike in negative coverage in July 2023. (Signal AI data)

The FDA, which granted initial approval to aspartame in 1974, disagreed with WHO’s classification of aspartame as carcinogenic. It instead aligned with the narrative presented by major FMCG companies in the debate, asserting that “scientific evidence has continued to support the (…) conclusion that aspartame is safe for the general population when made under good manufacturing practices and used under the approved conditions of use.”

WHO promptly moved to calm the concerns it had stirred after classifying aspartame as carcinogenic.

In the same month as issuing its report, WHO garnered attention by affirming that the current recommended daily intake of up to 40mg per kg of body weight, equivalent to 14 cans of Diet Coke for an average-sized adult man, would remain unchanged.

Following the confirmation of its safety for consumption, the International Council of Beverages Associations later criticized the media coverage of the ruling, stating that it “needlessly confused consumers with sensational speculation.” Scientists agreed, describing the classification of Aspartame as a possible carcinogen as “a bit farcical”.

The Food & Beverage Sector Faces Ongoing Health-Related Concerns

The foods and beverages sector, nestled within the broader FMCG industry, faces ongoing health-related concerns that can profoundly influence corporate reputations. 

While the controversy surrounding aspartame has subsided, ongoing health-related concerns persist within the FMCG sector, shaping corporate reputations.

The industry’s negative image of limited healthy alternatives comes amid heightened concerns about obesity and related health issues. Contemporary healthy eating involves reducing the intake of processed foods, sugar, fat, and salt—all common ingredients in many popular products from major FMCG companies in the food and beverage industry.

News coverage and sentiment around legislation intended to promote healthy eating habits and sustainable practices
News coverage and sentiment around legislation intended to promote healthy eating habits and sustainable practices

Positive sentiment toward regulations promoting healthy eating coincided with increased regulatory measures. However, criticism of regulators’ approach persists, particularly regarding the limited scope of individual nutrient-focused policies.

This focus encourages the industry to reformulate products to stay within critical thresholds, a practice that, while offering some health benefits, raises concerns.

A Push for Healthy Eating Drives Misleading Advertising

This approach often results in an increased use of additives or substitutions that do not genuinely enhance nutrient intake. Regulators lag behind the industry in adapting regulations to accommodate reformulated products, creating what some have called a perpetual game of whac-a-mole.

Critics have also long argued that current health guidelines wrongly focus on individual nutrients and ignore the effects of processing and additives. This essentially allows food companies to meet basic nutrition requirements while engineering ultra-processed junk foods that carry marketing claims that sound healthy — such as “fat-free,” “less sugar,” “high in vitamins” and “reduced sodium.”

The proliferation of these labels in an attempt to appeal to health-conscious consumers, coupled with false claims regarding sustainability and environmental impacts—commonly referred to as greenwashing—can lead to significant negative coverage.

News coverage related to false or misleading advertising

For example, The Advertising Standards Authority (ASA) has asked Kellogg’s to remove a promotional page for using ‘misleading’ and ‘unauthorized specific health claims.’ The banned advertisement included phrases like “Prebiotic” and “Prebiotic goodness to fuel your gut,” along with claims about chicory root fibre and gut microbiota nourishment. This request adds to previous instances of Kellogg ads being removed, including a 2019 advert that overstated the health benefits of Special K’s folic acid for pregnancy.

Still, expressing concern and taking direct and decisive actions to promote the consumption of healthy options can be a key reputation-booster opportunity.

In the UK, for instance, regulations aimed at curbing the advertising and positioning of high-fat, salt, or sugar (HFSS) foods and beverages faced a setback as Prime Minister Rishi Sunak reversed a key element of the government’s obesity strategy.

Sunak asserted that the public has a ‘right to choose’ their food, leading to the abandonment of plans for a ban on multibuy deals. This move, amidst concerns about food inflation, received support from food industry trade bodies like the Association of Convenience Stores.

However, Tesco remained committed to its voluntary ban as part of its initiative to promote healthier diets, originally introduced when the government postponed the initial plans for a clampdown on buy-one-get-one-free promotions in October 2022.

The announcement not only solidified Tesco’s commitment to supporting healthy and affordable diets but also emphasized its dedication to assisting customers in making healthier food choices.

Putting the ‘S’ in ESG: Elevating Corporate Reputation by Promoting Healthy Consumption

As the FMCG sector navigates health debates and regulatory challenges, consumers’ drive for conscious and healthy consumption shows no signs of slowing down.

Sustained vigilance, transparency, and inventive solutions become imperative for corporate reputation in this evolving landscape. The sector’s commitment to clarity, transparency, and consumer well-being is integral for maintaining a positive corporate reputation, demanding a strategic and proactive approach to navigating health-related challenges. 

Emphasizing clear communication and adherence to regulatory standards, especially in the realm of Environmental, Social, and Governance (ESG) considerations, is crucial. Prioritizing products that promote consumer health becomes a defining element in building a resilient and ethical corporate identity, offering the FMCG sector an opportunity to redefine its narrative and place health-conscious choices at the forefront of its commitment to sustainability and social responsibility.

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