If the upcoming restrictions affect you, then you’ll know only too well what HFSS stands for. But for the benefit of everyone else, this is an acronym for High Fat, Salt and Sugar which is essentially a classification of products deemed to be “less healthy”’.
The Department of Health’s Nutrient Profiling Model (NPM) has been the guiding factor in deciding what has been included in HFSS, and what hasn’t. Products that have been put on the naughty list include old favourites like burgers, pizzas and fizzy drinks, but also less obvious items such as sandwiches and yoghurt.
Potentially, 64% of products in the top 15 categories affected fall into the HFSS guidelines. The impact promises to be momentous with some claiming that it will be the biggest influence the government has had on our eating habits since rationing was introduced after the Second World War. HFSS is just one part of a wider drive from the Government to tackle the UK’s rising obesity rates.
What is happening, when?
In a nutshell, the Government will be implementing a total ban on paid-for advertising online for certain HFSS products by the end of 2022. It’s also going to introduce a 9pm watershed on TV, as the Government is particularly focusing on products that are most likely to appeal to children.
As well as the advertising restrictions, HFSS products will not be able to run multibuys or promotions from secondary displays in-store.
Overall, more than £1 billion in sales are expected to be lost from total UK grocery. However, with a lower reliance on advertising and promotions, a small crumb of comfort is that the changes are likely to see growth in Own Label ranges.
Using data provided by the major multinationals, many categories will be hit by HFSS, but none are likely to suffer more than Chocolate Confectionery.
In a word, hard. The kind of promotions in the Out-of-Home sector likely to be included in the HFSS legislation are:
- Free meal components with the purchase of a main meal, such as free dessert
- ‘Kids eat free’ promotions
- Multi Buy promotions such as two pizzas for the price of one
- Free drink refills with meals
- Combination offers, such as ‘2 courses for £12.95’
- Pre-packaged HFSS products in multibuy promotions
The chart below highlights the categories in the most danger. It’s apparent that foodservice will need to find imaginative, new ways to convince the customer their meal offerings are of excellent value.
While the new regulations look like they are going to prove costly for some, there could also be costs for those who don’t comply with them. Enforcement officers will be checking in-store to ensure all promotions abide by the new legislation. If they don’t, then an improvement notice will be served, and failure to comply with this will result in a fixed penalty of £2,500.
There will be winners too
While HFSS presents a major challenge for some brands, it will also create opportunities for others. Players in categories that are perceived to be healthier will have a chance to take advantage of the extra available space in the most sought-after areas in-store.
The big question is what steps will you need to take to win this impending ‘shelf war’? There are other questions too: Is this an opportunity for closer collaboration between wholesalers and suppliers? And who will take the lead and become the launching ground for new product development (NPD)?
Challenges for NPD
Currently, 16% of all new products have display and marketing support in the first four weeks after launch. Without this, it’s difficult to get consumer attention. Small manufacturers, in particular, will have difficulties launching NPD without media backing. It will also be risky for wholesalers and retailers adding NPD to their shelves without media support or the ability to display the new products in eye-catching locations.
One thing is for sure – it seems inevitable that new lines will struggle for space up against the deep pockets of major suppliers.
Planning for the changes ahead
Like the regulations or not (and if they affect you, then you most certainly won’t), you have no choice but to put a plan in place to deal with them. Firstly, you will need to raise awareness across your business of what is about to happen. This is the biggest change for retail and foodservice in decades and you need to understand what the impact is likely to be on your business.
Now would be a good time to start profiling your Own Label nutrient values and make plans to re-formulate if they are going to get caught up in HFSS. It’s also worth talking to key suppliers to discuss a joint lobbying position with the government.
Further action later
Once you’ve done the groundwork, you can then think about mobilising with key suppliers in terms of product reformulation, NPD, marketing strategies and finding new healthier hero SKUs to champion.
You’ll also need to calculate the impact in terms of display payments and the human cost to your business if promotions are significantly reduced.
Don’t forget to introduce HFSS on your website and ensure that governance is in place to manage the process when live in-store or online. You’ll need to reassess the role of gondola ends and secondary space in-store and possible promotions against the value of EDLP options by category.
Last, but by no means least, you’ll probably need to engage with your media and creative agencies to review any changes that need to be made in terms of creative content or scheduling. There really are so many different angles to consider.
As we’ve highlighted, the new legislation will impact different brands in different ways. A re-think will be required by all affected but, in many cases, new strategies will open up fresh opportunities where old ones have been lost. The HFSS story is sure to pick up pace as we get closer to launch. Watch this space for any new developments…