Children's health and food

Healthy returns

30 November 2018

Opportunities for market-based solutions to childhood obesity

In brief

In this report we consider the potential role for ‘challenger brands’, new businesses who are committed to creating healthier food environments, and how they can be supported to thrive.

Executive summary

Inequality and the role of food environments in childhood obesity

The healthy food and beverage market continues to grow steadily in the UK. However, nutritional value and price often increase hand-in-hand. This places many of the healthiest products out of reach of families most affected by childhood obesity. This matters.

Firstly, there is a clear and persistent relationship between childhood obesity and deprivation. Rates of childhood obesity are more than twice as high in areas with the highest levels of deprivation as that in their wealthiest counterparts; and this gap is widening. It should come as no surprise that income influences the options available to families. The diets of those on the lowest incomes are, on the whole, unhealthier than those in higher income brackets.

While they are eating a similar proportion of unhealthy food (which is high across the population), they are eating less healthy foods such as fruit and vegetables. Meeting the recommendations of the Eatwell Guide would currently require families on the lowest incomes (those earning less than £10,000) to spend 60% of their disposable income on food.

Secondly, we know that people’s eating behaviour is strongly affected by their food environment – the availability, attractiveness and accessibility of food inside and out of the home – and that those living in deprived areas face multiple factors that make it more difficult to eat well. Those living in more deprived areas are likely to be faced with a greater number of unhealthy food options when they step out their door, and likely to have less money and headspace to find healthy alternatives.

Tackling childhood obesity requires getting to grips with unhealthy food environments. This includes focusing on lower-income communities who are disproportionately affected by a food market that doesn’t currently serve them with products and services that easily enable healthy diets.

Affordability is critical. Increasingly, we're seeing a clear link between income and child obesity rates.

Henry Dimbleby Co-founder, Leon Restaurants and co-author of The School Food Plan

Challenger brands and their role in changing food environments

There is a business sector taking on this challenge. Over the last decade there has been an emergence of challenger brands in the food sector using sustainable business models to enable and drive lower income households to access more nutritious diets. These businesses are in part driven by social purpose; committed to creating healthier food environments and tackling dietary inequality. They are also responding to a market opportunity.

The total UK food spend of family households earning less than £20,000 was estimated at approximately £6.5 billion last year. There is unmet demand amongst this group for healthier options. Parents are seeking food options that are attractive, convenient, affordable and healthy. However the current food environment means compromising on one of these factors – with healthy being the first to go. As some of the case studies in this report highlight, when products and services can meet all these needs, they often have a recipe for success.

Helping challenger brands to scale

The businesses interviewed for this report are great examples of how these opportunities can be met. However, they are representative of a sector that is relatively new and small. As a result, they are facing challenges common to Small and Medium Enterprises (SMEs) around access to capital and markets. Having a social mission can add another challenge as a business sets itself criteria that reduce opportunities for cost-cutting; such as provision of a living wage to its employees.

In addition, the food sector is highly competitive and requires sector-specific expertise, which food start-ups may lack. Funders can help to tackle these barriers to scale. This includes social investors, grant makers and philanthropists who are interested in tackling childhood obesity through market mechanisms. It may also include food specialist institutional and individual investors interested in supporting innovation and disruption in the food sector.