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Healthy Foods Offer Investors Risks and Rewards

Planet Tracker and the Access to Nutrition Initiative have co-published a report evaluating how healthier food can help drive better profits and outcomes for both people and planet. The report compared the healthiness of food product portfolios from 20 of the largest global manufacturers with their profits and market valuations. The results revealed a link between healthier food product portfolios and higher profitability, but that poor company disclosures have obscured this connection and present a risk to investors. The authors argued that companies with broader, healthier food portfolios tended to have higher average profit margins (15.2%) compared to those with unhealthy portfolios (13.4%). As such, investors would benefit from a switch to healthier foods, with profits potentially rising by nearly US$350 million and valuations by US$60 billion in a scenario where companies with unhealthy portfolios would switch to healthier products and achieve similar margins. “Unhealthy food products are costing society and employers, but the issue is being overlooked by financial institution,” said Peter Elwin, Head of the Food and Land Use programme at Planet Tracker. “Regulation presents an increasing threat to companies profiting from producing unhealthy foods, but poor disclosure is hiding the risks. Our analysis shows that there could be investment opportunities associated with producing healthy food, so there’s an incentive for investors to ask for change”.

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