Health, obesity and UPFs
Following heated debate over ultra processed foods, the House of Lords report concluded that evidence around UPFs was not strong enough to support new regulations.
Having said that, it did recommend further studies be taken to review any link between obesity levels in the UK and the level of processing, alongside setting out several recommendations for addressing the UK obesity crisis.
Regardless of whether a UPF tax will emerge in the future, the momentum around UPFs has been significant enough to create notable behavioural shifts among consumers.
Clean label
Research from Ingredion, for example, showed that clean label claims are now the top factor driving consumer willingness to pay premium prices, with 73% of European consumers seeking products made with recognisable ingredients.
Research from FMCG Gurus echoed this, with its Top Ten Trends for 2024 report finding that 73% of global consumers are seeking food and drink products that contain recognisable ingredients.
“I think it’ll probably go down the ‘clean label’ route,” agreed Alan Jones, head of R&D innovation and regulation at Baker&Baker, speaking at Food Manufacture’s recent UPF webinar.
“We’ll probably be asked to justify why we’re using ingredients which are not in the kitchen cupboard or why we’re using additives. And that’s an absolutely fair challenge because we should really only be using additives or different ingredients if they are adding functionality.”
Impact on plant-based
An arguable causality of the UFP trend has been plant-based, which has been – perhaps unfairly – depicted as the UPF poster child. This could be in part why we have continued to consolidation in the sector, with The Tofoo Co., acquired by German investment company Comitis Capital; Rude Health picked up by Oddlygood; and the administration of Allplants all happening this year.
In 2023, data from the Good Food Institute showed the UK retail market for plant-based was valued at £942m, with annual sales and unit sales both falling – by 2.8% and 9.3% respectively between 2022 and 2023.
Intellectual property firm Appleyard Lees revealed there was an approximate 7% decline in patent filings for plant-based meat technology in 2022 – the first fall since 2013.
We have also seen Gen Z starting to turn away from plant-based meats, with research from AHDB finding that almost a fifth of those aged between 19-22 who previously followed a vegetarian or vegan diet, changing their diets.
The study showed that Gen Z are more likely to associate red meat as being a good source of omega 3 fatty acids (up to +5%), and less likely to believe that red meat should be eaten in moderation (up to -7%).
Despite the decline in patents, the findings from the ‘Inside Green Innovation: Progress Report’ still show an appetite for plant-based, with new filings for the category in 2022 the second highest on record, climbing from 264 in 2021 to 283 last year.
This continued high investment into the category shows investors are confident a second wave of plant-based meats is on the horizon.
Plant-based ‘milk’ is arguably the biggest success story of plant-based, having now become a well-established market in the UK with a 9.7% value share. But ‘natural’ meat-free ingredients have also started to carve out a niche.
FMCG Guru’s revealed that 73% of consumers across the globe find ‘natural’ products appealing, with 74% claiming they check ingredient lists.
Kantar data (52 w/e 9 June 2024) shows that despite weaker growth in the meat-free category of 3.8% year-on-year, commodities such as tofu and tempeh have seen a 30% Y-O-Y rise.
Fermented foods have been gathering momentum in the UK, with tempeh, kimchi and kombucha gaining popularity over recent years – most likely propelled by increasing interest in gut health.
Kantar data (52 w/e 9 June 2024) shows that despite weaker growth in the meat-free category of 3.8% year-on-year, commodities such as tofu and tempeh have seen a 30% Y-O-Y rise.
Overall, East Asia cuisine has made a mark on UK consumers over the last few years. Data from Skyscanner reveals that it will continue to influence, with tofu, bao buns and pho to be trendy 2025 dishes.
Mood food
Ingredients such as ashwagandha and lion’s mane have also seen basket traction due to health perceptions. Although, we’ve also seen on-going speculation around the former, with the Food Standards Agency currently investigating its safety and a few clashes between businesses and the Advertising Standards Agency (ASA) over claims related to physical and mental function.
Mental well-being will continue to play an important role in 2025, with mood foods set to be a mega trend. We have already seen the likes of Pizza Hut and Unilever dabbling in this field, so keep an eye out for more in 2025.
Research by strategic communications agency, Nexus, has shown that 60% of Brits believe diet is an important factor for good mental health, with millennials the most concerned. As many as 66% of millennials believe diet is an important factor for good mental health vs 56% of Gen X.
Fifty-six percent of millennials (vs 49% of Gen Z and 34% of Gen X) say they are changing what they eat and drink to improve their wellbeing.
Political shake-up
This year saw more than 50 elections taking place across the globe, with the UK moving left and the US moving right.
Trump back in power
Last month (November 2024) saw Donald Trump elected as America’s 47th president. At 78, he is the oldest person to be elected and the first convicted criminal.
Concerns were raised on the impact of Trump’s win due to the potential for tariffs, with economists predicting that UK economic growth could halve.
Not long after, the Centre for Inclusive Trade Policy (CITP) warned that a blanket ban of 20% on all goods going into the US could see the UK’s exports drop by £22bn (0.8% of GDP).
It’s difficult to predict what will happen, although it’s unlikely the outcome will be beneficial for the UK or the US. In fact, according to think tank Resolution Foundation, proposed tariffs could cost US consumers about $2,000 (£1,500) per capita.
Whilst a 20% tariff on all imports into the US is one scenario for the UK, it could be that Trump is using this as a way to negotiate a trade deal with Britain.
A UK-US trade deal had been on the cards in Trump’s first presidency and while it would avoid extra taxes and could remove certain other barriers for the UK, it’s also highly controversial. At the time, the food sector and NGOs had expressed particular concerns over food standards and animal welfare, as well as unfair competition coming into the UK.
These concerns were aired again in a recent food security debate in parliament by Plaid Cymru MP Ann Davies.
Moreover, if a trade deal with the US did occur, we could expect to find ourselves in a rock and a hard place with the EU, which would likely respond by maintaining tough checks on UK imports.
It is more likely that the US-UK will strike up more limited agreements rather than an overall trade deal. But, again, such requests may make trade with other regions more difficult.
Labour’s landside
After 14-years, Labour triumphed over the Conservative Party, securing 421 seats on election night vs the Tories’ 121.
While several industry bodies criticised the lack of attention placed on food security and production during campaigning, many expressed hope that a new government could get to work quickly to tackle some of the issues facing the sector.
Shortly after the results, IGD published a report that suggested Labour would concentrate more on food than the previous government which had focused more on the economic development of sectors such as technology and service.
However, Henry Dimbleby was less positive expressing disappointment in Labour’s manifesto, specifically its lack of detailed food policy plans. While he noted a few commitments such as free breakfast clubs and the introduction of a land use framework, he said they were insufficient for a substantial food policy shift.
The former government health tsar has since launched a firm, aimed at advising governments and food companies on health and sustainability policies.
Following the Government’s first month in power, the Food Foundation said that “overall there is room for cautious optimism with some steps in the right direction”, referencing HFSS and child poverty as two key areas.
The 13 October 2024 marked 100-days since Labour returned to power following their July victory – with YouGov data showing mixed views among Brits on the party’s progress. According to the data, almost half (43%) of Brits polled believe Labour haven’t done anything positive yet.
Farmer protests
From a food perspective, the picture is also mixed. Rachel Reeves’ Budget disgruntled many, but perhaps none more so than farmers who have since been protesting over inheritance tax changes.
A 20% levy will now be charged on agricultural assets worth more than £1m. Protests which took place on 11 December saw farmers heading to Westminster and a tearful address from National Farmers’ Union (NFU) president Tom Bradshaw.
“It’s not money. This is a lifetime of work, it’s the heritage and the custodianship of their farm,” Bradshaw said.
UK Prime Minister Keir Starmer does not appear to be leaning towards a U-turn however, with the Government saying it expects to only impact around 2,000 estates each year.
But the NFU claims 75% of farmers will be impacted in some way. While Victoria Vyvyan, from the Country Land & Business Association, estimates it will affect 70,000 farms.
Responding to the backlash, he reemphasised Labour’s intent to ‘support farmers’ and a well-timed press release from Defra showed that the UK Government has injected more than £343m into the rural economy in the first week of December – reaching more than 31,000 farmers.
The Government is providing more than £5bn to the farming budget – the largest ever increase investment in sustainable food production in Britain’s history.
To further support farmers Ministers have also announced details on how farmers will benefit from improved farming schemes, including the enhanced Countryside Stewardship Higher Tier and new actions around flood resilience.
A new food strategy
This month (December 2024) also saw confirmation that a new food strategy is in the works. The announcement had been planned for the month before, but the ensuing farmer protests were said to have delayed it.
Health, alongside food security, environment and the economy will be focus of the strategy led by Defra. The news came at the same time as Defra’s food security report, which showed a notable decrease in food secure households in the UK; and chief medical officer for England, Chris Whitty’s, damning report on inner city health.
Defra has said the new food strategy will involve close collaboration across governmental departments, including the Department of Health and Social Care, and the Department of Education, as well as industry collaboration which will be achieved through a new coalition of food sector leaders, academics and charities.
The industry has responded warmly to the news, with several industry bodies noting that this will be an excellent opportunity to build on the work of the Dimbleby Report.
The former government health tsar has said whilst the details are sparse on the strategy, it’s encouraging.
“This will be a monumental task for Rt Hon Steve Reed OBE MP, The Rt. Hon. Wes Streeting MP, and Bridget Phillipson. Success will demand systemic thinking and cross-department collaboration which means there is a high chance of it getting bogged down,” Henry Dimbleby wrote on Linked In.
Regulations: Push forwards and push backs
Childhood obesity has surged since the pandemic, with 40% of year six children between 2020-21 classed as overweight – a rise of 35.2% from 2019-20.
Savanta’s Consumer Omnibus found that this spike has driven public favour for HFSS advertising rules, with 65% believing ad restrictions of these foods to children will be a step in the right direction to tackling obesity.
It’s no surprise then that Labour has pressed ahead with new HFSS rules, which extend the current restrictions on product placement in store.
Under the new regulations, which will come into effect 1 October 2025, HFSS products will be subject to a 9pm watershed across TV and on-demand. Moreover, a total online on paid-for adverts of less healthy food and drink will also be rolled out.
The advertising regulations will reach across all four devolved nations and affect businesses with 250 or more employees. The promotion regulations (i.e. buy-one-get-one-free) of less healthy items will be rolled out in England and will affect businesses with 50 or more employees offering pre-packed food for sale in store and online. This will also impact free refills of sugar-sweetened drinks in out-of-home sector.
There is a 2-stage process for defining a ‘less healthy’ food or drink product. The product needs to both:
- Fall within one of the product categories in the schedule to the regulations
- Score 4 or above for food, or 1 or above for drink when applying the 2004 to 2005 NPM using the 2011 technical guidance.
The 13 categories include all variations of products and meals, including:
- Hot
- Ambient
- Chilled
- Frozen
- Ready-to-eat or drink
- On-the-go
August 2024 saw nature minister Mary Creagh confirm that the new Labour government planned to roll out a UK-wide Deposit Return Scheme (DRS) ahead of the October 2027 deadline.
Across the UK, consumers purchase an estimated 31bn single-use drinks containers each year – 12bn plastic drinks bottles, 14 bn drinks cans, and 5 bn glass bottles. Yet current collection rates are between 70-75%, and a significant amount of these containers end up littered or in landfill.
Despite Creagh’s promise to get it over the line sooner, the UK Government has since said it will go live in October 2027, with England and Northern Ireland having reaffirmed their commitment to the DRS following Wales’ withdrawal.
This year has seen a lot of back and forth on the EU’s Deforestation Regulation (EUDR).
On 14 November, European Parliament voted to amend and postpone the EUDR from the original date of 30 December 2024 by exactly one year for large companies and to 30 June 2026 for smaller businesses.
The regulation which is part of the EU’s Green Deal prohibits the import or trade within Europe of several commodities, including palm oil, cocoa, soy and coffee, which have contributed to deforestation from 2020.
Whilst the postponement has been confirmed, conversations are still ongoing around whether another risk level should be added.
The EUDR uses a three-tier risk assessment system to categorise countries and regions into having either a high, standard of low risk. However, new proposals have been cast to include a no risk category.
Countries classified as no risk are defined as ‘countries with stable or increasing forest area development’.
However, the Soil Association Certification, alongside a number of non-profits, including the WWF, Earthsite, the World Resources Institute, and the International Union for Conservation of Nature (IUCN), have dubbed this move as a real threat to climate progress.
Member States have rejected attempts to deregulate and negotiations between the co-legislations have started. The pressure is on to make a decision though, with changes needing to be adopted, signed and published in the Official Journal of the EU before 30 December 2024.
We have also seen Extended Producer Responsibility fee estimates released.
Under EPR, all UK businesses that handle packaging will need to fund the total cost of managing packaging waste (from production to removal), on top of their current liability.
Fees will be incurred from 1 April each year based on the packaging supplied by registered producers for the preceding calendar year, with invoices set to be sent annually in early summer.
Illustrative base fees for 2025/26 have been calculated for each of the eight packaging categories.
Final fee levels for the first year of EPR packaging will be announced after 1 April 2025.
The UK has also seen new trade sanctions enforcement coming in under the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024.
These new rules mean companies could now face penalties even when they did not know and had no reasonable cause to suspect they were importing/exporting items in violation of trade sanctions.
While sanctions measures that concern food products are currently more limited than those against more strategic industries (such as the military or industrial sectors), certain sanctions programmes do prohibit the exportation or supply of luxury food items (e.g. caviar or truffles), or certain seafood products.
The bigger impact, however, can be on machinery used for food production or storage, as this can also fall within the wide-ranging restrictions, which include items such as certain filtering machinery, pressure-reducing valves, or cooling equipment.
While food manufacturers in the UK are planning to increase or maintain investment over the coming year, regulatory concerns have hindered opportunity for this to be expanded further.
FDF research found that although F&B producers have expressed an interest in investing into R&D (40%), plant and machinery (44%), and skills and training (44%), 53% will be holding back for fear of regulatory impact.
The FDF has cautioned that stable regulatory guidance from government will be necessary to ensure positive momentum, with an estimated £14bn untapped growth opportunity for the UK currently.
This year’s Business Leaders’ Forum echoed previous sentiments we’ve heard from senior leaders, that regulation is overwhelming.
“We don’t need more regulations, we need more dialogue. There should be more interaction between government and the industry,” said one delegate.
Food safety
This year we saw the publication of the 2024 Food Crime Strategic Assessment.
The report found that today’s threat landscape is similar to those highlighted in its last report, published 2020, but it also noted that new themes linked to recent events, including UK economic conditions and geopolitical events, have emerged.
The findings showed that all seven types of food crime have persisted, with four standout themes:
- Misrepresentation of red meat and poultry with regards to status, origin or durability date.
- Waste diversion, including links to animal by-products handling within red meat and poultry supply chains.
- Unlawful processing or importation of lamb and pork.
- Authenticity challenges in the supply chains of commodities positing notable or persistent fraud risks to the UK arising from upstream, overseas adulteration and misrepresentation.
A separate report from the FSA also found issues with frozen meat. The latest Retail Surveillance Sampling programme discovered that 40% of the frozen raw chicken and 42% of frozen beef burgers it tested were non-compliant.
Rising costs have been pinpointed as key driver for new threats. Despite some of the industry reporting that cost pressures are abating, total costs rose by 12.8% in 2023.
The bad news is that manufacturers are expecting costs to rise by 2.9% over the year to September 2025, as inflationary pressures gather pace.
Data from the Office of National Statistics shows that costs (excluding labour) to food and drink manufacturers rose by 0.3% over the year to September 2024.
The FDF’s latest state of the industry report found that cost rises of more than 10% were felt by 11% of manufacturers. SMEs experienced the highest hike with an average of 7%, compared to 2.9% and 2.4% for large business and mid-size businesses respectively.
Unsurprisingly, selling prices also rose and we’re likely to see food items increase in 2025 with the Institute of Grocery Distribution (IGD) predicting up to a 4.9% rise.
As always, when prices go back up it could mean increased risk of food fraud or unethical practices.
Earlier this month, the BBC reported that it had found ‘Italian’ tomato purees sold by several UK supermarkets appearing to contain tomatoes grown and picked in China using forced labour.
A total of 17 products were alleged to likely contain Chinese tomatoes – most own brands sold in UK and German retailers. All supermarkets have disputed these findings.
The new duty to prevent fraud (effective 1 September 2025) will add another layer for businesses within its scope, and the recent publication of statutory guidance suggests the compliance bar will be set high.
Sticking with tomatoes, we have also seen reports of cadmium contamination in tomatoes.
While fresh tomatoes have not historically been identified as a high-risk crop for heavy metal contamination, Alison Johnson informed Food Manufacture that recent events have shifted the tide.
In September 2024, the Rapid Alert System for Food and Feed (RASFF) issued two notifications of high cadmium levels in tomatoes, raising concerns.
The first report, from Croatia, involved tomatoes from Bosnia and Herzegovina. The second, just a day later from France, reported high cadmium levels in cherry tomatoes originating from Italy.
This sudden appearance of two separate incidents in different countries, within the same month, is particularly troubling as cadmium contamination in tomatoes has not previously been flagged as a significant issue.
It’s possible that soil could have been contaminated by improper waste disposal, contaminated irrigation water or air pollution, but it’s also worth considering the possibility of origin fraud.
Food Manufacture’s annual Food Safety Briefing, which featured the expertise of Johnson among others, flagged several food safety risks, including the potential for fraud food to target alternative protein.
A recent study funded by Defra which explored the potential for new risks regarding authenticity and labelling of alternatives, found that little consideration has been given to the risks around fraud and alternative proteins.
But it’s not just the alternative sector at risk, with Food Manufacture warned that we may see more cases akin to the Glen’s Vodka incident wherein counterfeit vodka labelled as Glen’s was found to contain isopropyl alcohol.
We also heard of growing concern around ecommerce risks from the experts. More recently, Food Standards Scotland issued caution over risks around food sold on social media with little known about what, or indeed the scale of, foods are being sold this way.
The research found that many adverts did not include information such as ingredient or allergen list.
Food allergy diagnoses are rising, with new food allergy cases almost doubling between 2008 and 2018.
Recent government estimates found that now around 6% of UK adults have a food allergy – that’s approximately 2.4m people.
One reason for the rise could be changes to our diet, including the introduction of novel foods.
But we have also seen a number of recalls this year – of particular note in the UK were the mustard products potentially contaminated with peanut.
FGS Ingredients Limited, which imports mustard as an ingredient to manufacture spice products including curry powders, seasonings and spice blends, undertook a precautionary withdrawal of all its mustard product over concerns it may be contaminated with peanut.
Safety advice was lifted in November after all affected products were removed from sale.
I must also lay mention to the big E. Coli outbreak of the summer which saw more than 270 cases confirmed.
Among those affected by the summer’s E.Coli outbreak, 122 people were hospitalised. More than half were female (57%) and had a median age of 35 (ranging from 6-85 years).
There were two deaths in patients within 28 days of confirmation of infection with the STEC outbreak strain t5:206. Based on the information available, the Food Standards Agency (FSA) believes one of these deaths is likely linked to STEC infection and the associated contaminated product - lettuce.
Food Manufacture investigated into the case further in this exclusive deep-dive to see what lessons could be learned from the summer E. Coli outbreak.
Growing investments
Despite significant levels of inflation, peaking in the UK at 19.2% in March 2023, there was some major M&A activity in the last year. Most notably, the £28bn acquisition of Kellanova by Mars that was agreed to in August.
Other significant transactions include Carlsberg acquiring Britvic, as well as Marston’s 40% stake in the Carlsberg Marston’s Brewing Company, and just this week Supreme rescuing Typhoo Tea from administration.
More recently, rumours have been circulating around whether Mondelez will make another attempt to acquire Hershey’s following a rejected takeover bid eight years ago.
If the Cadbury’s owner did successfully acquire the US business, it would make it the world’s largest candy company.
Speculation started following a Bloomberg report, which claimed the snacks and sweets company is exploring a deal.
Shares of the Hershey Company saw sharp climbs shortly followed, rising as much as 19% on 9 December 2024.
Assessing the potential for increased M&A activity within food during 2025, Food Manufacture has been told if inflation remains cool and interest rates stabilise, a continued resurgence in deal making could take place.
