This week in FMCG: Amul and PETA slug it out, Nestle in ‘unhealthy’ food row and ITC’s Q4 earnings

A healthy lifestyle is no more a choice but a necessity as the coronavirus outbreak forces a rethink. People are more conscious about the products they are consuming, especially food, forcing packaged food and beverage companies to re-examine strategies.

The recent developments in the FMCG industry — Nestle acknowledging that about 60 percent of its products are unhealthy and Amul-PETA vegan row— show that the discourse on “health” has gone mainstream in India. This is a radical shift as Indian consumers were perceived to be value or cost-conscious by businesses.

Amul vs PETA

The standoff between Amul and People for Ethical Treatment of Animals (PETA) took an ugly turn earlier this week after the milk cooperative’s former vice chairman Valamji Humbal wrote to Prime Minister Narendra Modi, urging him to ban the non-governmental organisation.

While the recent flashpoint has been an advertisement by Amul, it all started when the country’s largest dairy brand objected to companies labelling plant-based beverages as milk.

At the core is the global discourse on vegan, vegetarian and non-vegetarian lifestyles and which is more eco-friendly. The two sides—the dairy industry and PETA that advocates a plant-based lifestyle —claim their products are healthier.

Watch this space, as the last word has not been said in this battle.

Also read: Explained | Amul and PETA are at loggerheads

Nestle’s fails health test

FMCG major Nestle in a presentation circulated internally acknowledged that 60 percent of its products do not meet recognised definition of health.

According to a report by the UK-based newspaper The Financial Times, the presentation, which was shared among the company’s top executives earlier this year, said only 37 percent of Nestle’s food and beverages by revenues, excluding products such as pet food and specialised medical nutrition, achieve a rating above 3.5 under Australia’s health star rating system.

After the report came to light, Nestle released a statement saying it was working on a company-wide project to update nutrition and health strategy.

Also read: Nestle ‘unhealthy’ food row: 4 questions answered

Earnings this week

ITC reported its fourth-quarter earnings for the quarter ended March earlier this week. The company’s net profit for the period fell 1 percent to Rs 3,816.84 crore from Rs 3,926.46 crore in the year-ago period. The FMCG major clocked a revenue of Rs 15,404.37 crore in the fourth quarter against Rs 12,560.64 crore in the corresponding period of FY20.

Though the company reported 7 percent year-on-year growth in its mainstay cigarette business and about 16 percent growth in the FMCG business, the earnings did not cheer the street and the share price fell about 3 percent on June 1 after the company reported its earnings.