Two years ago I supplied feedback to the latest corporate responsibility report from a well-known listed UK food manufacturer. It was an expensive-looking document that discussed certain corporate responsibility impacts and credentials.
However, it did not discuss things like food additives, ingredients, obesity issues and the marketing of the company’s products to children. My observation was that the value of the report was undermined by the company’s failure to discuss these key areas.
Soon afterwards I met a listed television company with a large audience of children. It wanted to chat about its corporate responsibility impacts. The staff were surprised when I told them they had major issues concerning food and drink advertising and potential regulatory action. I suggested they put their heads together with their major advertisers to decide on a joint policy and action plan, and communicate the results to their investors.
That was then – this is now.We’re in the post-Super Size Me world, where the corporate responsibility credentials of the food sector and businesses associated with it are the subject of much greater investor scrutiny.
Despite these developments, it appears that many food industry companies have not addressed these matters within their investor communications and reporting. London-based City University recently produced a fascinating survey looking at the corporate web sites, annual reports and corporate responsibility reports of some of the world’s largest food manufacturers, retailers and food service companies.
Among the study’s findings was the fact that the majority of companies didn’t report actions concerning salt, sugar, fat, portion size or advertising. The survey did not look at sales and marketing information and other communications. I believe that many of the companies surveyed produce a lot of this sort of information for the benefit of their customers.
What can be drawn from this story? Clearly, many food sector companies do not believe their investor audiences are interested in their strategies and performance in this area. The recent experience of UK-listed beverage company Britvic is interesting in this context. Following a recent and unanticipated fall in demand for its carbonated drinks (and consequently in its share price), the company has communicated its strategy in this area to investors by presenting its plans to address the ‘better for you’ or ‘healthier’ drinks market.
History indicates that the importance of corporate responsibility matters can often catch industry sectors ‘on the hop’, leading to much of their reporting and communications activity being reactive rather than proactive and companies and their products being portrayed in an unnecessarily poor light. My own experience is that first movers often gain a significant investor relations and reputational advantage. The question is, will your sector be the next food sector?
