Using regulatory insight to aid commercial resilience

Sustainability has been on the food and beverage industry agenda for decades, and many companies have well-established targets and initiatives in place. However, as the urgency of environmental issues escalates, there is increasing pressure to make material gains. In addition to the net zero targets that apply to all industries, many markets are introducing measures that specifically target food and beverage businesses.

In the mid-term, we expect the EU’s Farm-to-Fork initiative to influence ongoing global development of regulatory models for sustainability. Nevertheless, there is a significant lack of global harmonisation in sustainability-focused guidance and regulations at present, and our conversations with our members indicate that the complex landscape is causing a high level of confusion and uncertainty.

Food and beverage packaging is still high on the agenda for many authorities. The ‘Reduce, Reuse, Recycle’ mantra remains central here, with increasing pressure to place more emphasis on reduction and re-use, as well as improving and accelerating the outcomes of recycling.

Last year, leaked proposals from the European Commission indicated that the revision of the EU’s packaging and packaging waste directive (2018/852) will advise a 75% reuse target for drinks packaging by 2040 and 20% by 2030. This is currently being challenged by beverage associations including the European Fruit Juice Association and UNESDA Soft Drinks Europe. The official definition of ‘recyclability’ is proving contentious in the EU too. Recycling logos are another complex and inharmonious area of global regulation; the UK and Europe situation is summarised here.

At present, ‘less healthy’ food and beverage products are generating more regulatory changes than those which claim to confer positive health benefits. Businesses manufacturing or selling products that are high in fat, salt and sugar (HFSS) face a rapidly changing patchwork of global regulations, most of which is aligned with governmental strategies to tackle obesity. Businesses that are innovating or reformulating to improve health and wellness credentials would benefit from applying a regulatory lens to products at the earliest possible stage to reduce risk of failure later.

New and forthcoming measures and regulations cover everything from nutritional labelling to advertising restrictions and sugar taxes. There are two macrotrends at play here; one focuses on guiding and empowering consumers to make healthier choices (i.e., front-of-pack labelling), the other looks to penalise or control the actions of manufacturers.

The regulatory agenda for ‘unhealthy’ food and beverage products has been heavily occupied with sugar and salt in previous years. Now, attention is also turning to fats, particularly trans-fats. Food businesses that may be impacted by any developments in this vein should pay close attention to emerging and evolving requirements.

The members we interviewed when preparing the Annual Trends Report unanimously said that safety is always at the top their agenda. It's important to sustain a progressive attitude to quality and safety, because as the industry evolves, new concerns and challenges arise.

From a quality perspective, rules related to plant-based product labelling are causing complexity and uncertainty at present. In the past 12 months, several markets have moved quickly to regulate labelling for plant-based products. The use of terms traditionally associated with meat products, such as steak, sausage, and burger, is a key area of concern.

Regulators are also turning their attention to lab-grown meat created using cell culture techniques. As these products become more commercially viable and consumer acceptance increases, they will start to make the transition from niche to mainstream. Our regulatory specialists suggest that forthcoming developments in the US, UK, China, and Australia and New Zealand could be indicative of how global regulations might evolve to encompass cultured meat.

Food, beverage, and supplement businesses are dealing with serious global supply chain issues, increased inflation and rising costs. However, alongside the challenges there are opportunities for innovation and competitive differentiation. We believe food and beverage businesses that align their commercial roadmaps with robust regulatory strategy have much to gain.

Accounting for regulatory factors at the outset of product innovation or market expansion makes it easier to pivot and adapt if circumstances change. This reduces risk and improves the likelihood of positive outcomes. It’s the difference between riding the storm and thriving within it.

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