Snack Industry ESG Thematic Report, 2023

Environmental, Social, and Governance (ESG) in the Snack Industry

The current trend of investments is impacted by the introduction of policies in areas of Environment, Social and Governance and the intense implementation of such policies.

Snack industry, which has a variety of food products, is driven by the increase in demand for the frozen foods and preserved food, mostly meat based. Key players in the industry are using different methods of preservation ranging from inducing chemical preservatives to food irradiation, where the main aim is to eliminate the development of micro bacterial development. These preservatives cause a wide range of health issues, mild to intense, thereby adversely impacting social health.

The key leaders in the market are trying to create a positive impact in terms of society by stopping the use of certain preservatives, in favor of reaching health-conscious consumers.

ESG Trends

The industry creates an ESG impact in terms of social. The social health is negatively impacted, primarily due to the preservatives used and the methods used to preserve the food. Procedures such as food irradiation are prevalent in the market, where the product is exposed to certain radio-active elements such as cesium or cobalt 65. Even though this doesn’t make the food radio-active, still the food’s color, texture and taste may change. Some of these foods may cause allergies upon consumption or gradually over a period. Companies in the snack market can be creating a negative impact on communities in line with the United Nations’ Sustainable Development Goal 3: Good Health and Well-being.

Preservatives such as sulfites and nitrates, nitrites are reported to show impacts on health in forms of headaches, nausea, allergies and even cancer. It has been reported that nitrates and nitrites used for preserving meat-based products as a cure, when consumed converts into nitric acid and this may lead to stomach cancer. Thus, there is a significant negative impact on the human community in terms of health and safety when exposed to food products marketed in the snack industry.

Further it has been reported that sorbates or the sorbic acids are added as anti-microbial preservatives, causing urticarial and contact dermatitis. Benzoates, a widely used chemical preservative, is reported to cause asthma, allergies, and skin rashes. butylated hydroxy anisole BHA, another widely used preservative from food becoming rancid, in various range of snack market products is supposed to be carcinogen.

Tert-Butylhydroquinone (TBHQ) a common preservative used over 1250 food products is said to impact human immune system, where it may be considered as an immunotoxin, causing hypersensitivity, chronic inflammation, immunosuppression, and other similar effects. It must be noted that this is a most common preservative used to increase the shelf life of the products. Preservatives such as asperities are reported to alleviate respiratory problems and classified as slow poison among other additives.  In terms of ESG, this sector will receive significant attention from investors due to its negative impact on the health and wellbeing of communities exposed to this market.

It must be noted that post pandemic, the awareness about the adverse effects of the preservatives in the snacks has increased amongst the governments, consumers as well as amongst the key leaders of the industry. This is leading to a development of alternative forms of preservation, trying to bring more positive impact on social health.

Growth of the Snacks Market

The snacks market at global scale is valued at USD 1450.4 billion as of 2021 and is expected to grow at a compound annual growth rate of 2.7% from 2022 to 2030. Initiatives for alternative methods for product preservation, such as using organic and natural preservatives, as well as the sustaining surge in the demand for the products, consumer preference towards the products are some of the key driving factors of the snacks market.

Key Companies in this theme

    • Unilever

    • Calbee

    • The Kellogg’s company

    • Kraft Heinz

    • Pepsi Co

    • General Mills

    • ITC Limited

Scope of the Snack Industry ESG Thematic Report:

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Aspects the Snack Industry ESG Thematic Report:

    • Offers a global perspective of the snack industry and the policies and measures taken by the players, for overcoming the challenges faced in terms of Environment, Social and Governance.

    • Key insights into the sustainability practices of major players in the market.