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The Government’s recent obesity strategy has divided opinions, but it seems the new rules could bring opportunities for the independent, fine food sector.
As part of Boris Johnson’s plan, a host of new rules have been laid out that will ban the advertising and sales of food high in fat, sugar or salt (HFSS).
Restrictions include the banning of advertising HFSS on television or online before 9pm, when children are most likely to see them. There will also be a ban on BOGOF promotions of HFSS foods, as well as these items being placed in prominent areas of the stores including checkouts and entrances, as well as online. Rather than offering promotions on HFSS foods, retailers will be encouraged to promote healthier options, and to offer promotions on items like fruits and vegetables rather than sweets and unhealthy snacks.
Large dining outlets with 250 or more employees are also required to add calorie labels to food items that they sell, while there’s also talk of the same being implemented on alcohol.
How will this affect the industry?
The new regulations are likely to have the biggest impact on the multiples, which tend to rely on the promotion of HFSS products to help drive sales.
That said, these rules will no doubt have an impact on independent retailers and producers as well. Seasonal marketing, when chocolate, cakes, biscuits and confectionery products are typically promoted more aggressively, could be affected by the new ban. The restriction on offers will also mean increased costs for customers, so retailers may seek to balance this out with discounts on other items.
ACS has also voiced concerns about the challenges that smaller retailers will face given the restriction on where products can be placed if lack of space is an issue. What’s more, the restrictions may offer a hurdle to challenger brands and start-ups, which will find it more difficult to gain a market share against established brands without the ability to offer promotions to entice customers and increase their profile.
But the regulations also offer an opportunity for the fine food and independent sectors, as the very nature of the industry typically revolves around foods that are produced to stricter standards and are naturally healthier than their mass-produced counterparts.
As the Government’s obesity strategy takes off, and the campaign is rolled out across the country, we could see an increased awareness in the health benefits of specialist food products, and in turn, an increase in health-conscious consumers. Producers of wholesome foods as well as indie retailers may seek to alter their marketing messages to incorporate the health benefits of items, whilst promoting value for money or additional discounts to ensure consumer spend isn’t affected.