HFSS – Finding The Positives
It appears that the new HFSS (high in fat, sugar and/or salt) compliance laws have thrown the FMCG and retail industry into full-on crisis mode. Suppliers are having to reformulate entire ranges, supermarkets are facing the biggest changes to layouts in 40 years, and there is a widespread view that the government has not provided anywhere near enough guidance to businesses on what they need to implement or support to do it. With a lack of transparent information, many businesses are still unaware of the need for change and even more have stuck their heads in the sand and are woefully underprepared for the new promotional and advertising regulations, due to come into force in October.
So, where is the silver lining?
Firstly, we all have to recognise that these new regulations are intended to be part of the solution to a vital issue. A recent government survey found that 14.4% of reception age children (age 4-5) are obese as well as 25.5% of year six children (age 10-11). These are worrying increases from 2019/2020 at 9.9% and 21% respectively, and the need for more positive change has never been clearer. The Soft Drinks Industry levy, designed to reduce sugar levels and introduced in 2018, caused similar hand-wringing and horror when it was proposed, but was (relatively) efficiently introduced and delivered a significant calorie reduction per UK resident per year. While there has been a mixed response from the food and drink sector to Henry Dimbleby’s National Food Strategy, his call for more transparent reporting and more common metrics around the sale of ‘healthy’ food has found many supporters, with companies such as Tesco and Unilever already agreeing to bold new targets that can be scrutinised by shareholders.
The new HFSS laws could also help challenger businesses to find their voice. Categories like biscuits and confectionery may lose some of the worst offenders from the shelves, leaving more room for smaller, higher quality brands to flourish. However, they will of course have to compete with a whole raft of HFSS-compliant products (both brand new and reformulated) that are now being launched by the international FMCG giants.
Finally, although the new HFSS regulations will significantly curb advertising and promotions on affected products – for example, there will be a 9pm watershed on TV advertising - they will still allow suppliers to promote brands even if individual products are banned. It should provide an impetus for CMOs to develop more impactful and creative brand-centric campaigns, and move away from (at times) blander, product-focused and promotionally driven campaigns.
Suppliers and retailers do not have long to make the changes needed and many are lobbying for an extension to the October timetable, given the current inflation pressures. However, it feels like they need to bite the bullet and it seems clear that the mid to long-term benefits of the new legislation will far outweigh some short-term pain.
