Examination of Witnesses (Questions 820-839)
THURSDAY 27 NOVEMBER
MR ANDREW
COSSLETT, MR
JULIAN HILTON-JOHNSON,
MR MARTIN
GLENN AND
MR TIM
MOBSBY
Q820 Mr Burstow: Could you tell us how
many individuals are working in your company specifically on health
issues and separately how many are working on nutrition issues?
Mr Cosslett: We have a science
and research department. Part of their remit is the food safety
agenda as a whole and part of that would be nutrition. There would
be probably 20 people working in that in the UK. Recently, partly
in response to the general concern in this area, we have put a
team in place led by a lady social impact director, who reports
directly to the chief executive. She has a global network of people
in place now that is growing who have a large part of the responsibility
for thinking about how we can not just develop nutrition platforms
but, more importantly, get them into the market place so that
they are commercially successful. Quite a lot of initiatives fail
because they are well intentioned, but they do not deliver in
the market place. We have a growing number. We have always had
in the UK a large number of people involved in food safety and
nutrition within that and that is growing as we become more interested
in this issue.
Mr Hilton-Johnson: We have a director
of nutrition. In the UK nutrition is dealt with through cross-functional
teams who come together to review our menu items and new menu
items. They are obviously supplemented by a nutritionist and advisers
working with our suppliers.
Q821 Mr Burstow: And on the health side?
Mr Hilton-Johnson: We put them
together.
Q822 Mr Burstow: And roughly, in terms
of numbers?
Mr Hilton-Johnson: It is very
difficult to say because the cross-functional team will vary.
It is quite a large number of people who are involved in the process.
Q823 Mr Burstow: Are those people pulled
out of other parts of the organisation to do this work?
Mr Hilton-Johnson: Yes, some of
them.
Mr Glenn: As a global Pepsi initiative,
we have an advisory board on health and wellness of 13 eminent
nutritionists and food scientists, led by Dr Kenneth Cooper of
the Cooper Aerobic Centre and Dr Dean Ornish of the Preventative
Medicine Research Institute of California. They provide global
guidance. They give advice on new product development, whether
things are suitable for the trends that we are all aware of as
a business. Within the UK as well we have access, albeit discreet,
to four nutritionists and food scientists who give the UK business
advice on product formulation of our new product range.
Mr Hilton-Johnson: I should have
mentioned our global advisory council on nutrition which is made
up of 13 people from different sectors around the world, including
a gentleman from Leeds University.
Q824 Mr Burstow: Mr Glenn, the two aspects
you have described are both advisory roles outwith the company
but working with the company. Do you directly employ any staff
that deal specifically on issues around health and nutrition?
Mr Glenn: It is the same answer
really that Cadburys gave you. Within our research and development
organisation that issue is picked up.
Mr Mobsby: It is a rather strange
question for us in some respects. I am not trying to be evasive.
All of our marketing people have been exposed to nutrition considerations.
We have dedicated nutritionists working within each of our businesses,
either reporting directly to the general manager or in some instances
in other areas. On a global basis, it would be unaffordable to
fund primary research into many areas but on a global basis we
coordinate our understandings and new learnings that are emerging
in the areas of nutrition and nutrition science to try and pull
that information into the business. It permeates our business
quite considerably all the way through. Witness, we spend a lot
of time trying to understand exactly what our foods do in the
diet, as we try to illustrate in some of the information we provide.
Mr Burstow: Afterwards, if anyone felt
able to give us any concrete numbers over and above the ones they
have given today and any additional memoranda on that, that would
be very helpful.
Q825 Chairman: Mr Hilton-Johnson, one
of the issues that we have had raised with us is that at least
one of your branches—I believe it is Paddington—has
some formal links with the NHS whereby NHS staff showing their
staff card can get some sort of discount, a medium meal for 1.99,
normal price, 3.29. You can go large for an extra 30p. Is this
a general arrangement with the health service or is it just a
one-off that appears to have occurred locally?
Mr Hilton-Johnson: I am certainly
not aware of it. I would suggest therefore that it is likely to
be an initiative on a very local level, but I can certainly get
the information for you.
Q826 John Austin: Can I come back on
the question I asked earlier about promotional toys? I understand
that one of your promotions was that people had to collect the
parts to put together so you had to buy a whole lot to get the
final toy.
Mr Hilton-Johnson: You are quite
right. We did run one such promotion recently. It did not work
very well and we will not be repeating it.
Q827 John Austin: Mr Cosslett, you said
earlier on you were in the food industry whereas some of your
colleagues in the confectionery business suggest that they are
not in the health or nutrition business but they are in the pleasure
industry. I wonder if you would like to comment on that, particularly
in the light of your website which describes the position of Heroes
as "tiny little bits of fun for everyone to share".
Crunchie is "the fun, feel good chocolate" and Curly-Wurly
is "fun for everyone". Do you see yourself in the food
industry or in the pleasure industry?
Mr Cosslett: I think we see ourselves
in the food industry, but we have a very specific role in the
food industry which is to be a source of pleasure. It is generally
known, and our research consistently endorses it over the decades,
that confectionery is used to brighten people's lives. It is a
shared product. 68 per cent of the products we sell are in a sharing
format. It is designed to be a bonding, shared experience. Whether
it is tubs of Heroes or Roses or family bars which gets shared
around the family, that is at the heart of what confectionery
is. It is based on cocoa, sugar and milk, so not to call it a
food would be wrong.
Q828 John Austin: I do not think any
of us would deny that consumption is a pleasurable activity but
do you feel you share some responsibility for the health consequences
of the products you sell and for the obesity epidemic?
Mr Cosslett: No. I do not think
there is any correlation between confectionery consumption and
obesity. We are a very small proportion of the diet. Our own products
account for something less than one per cent of what people eat.
All the evidence suggest that people use our products extremely
sensibly because of the issue of it being a known quantity. I
think it is the unknown quantities which present the challenges.
I lived in Australia where confectionery consumption is half what
it is in the UK. They have the fastest rising obesity rates in
the world, despite their healthy image. The USA has far lower
rates of confectionery consumption than the UK; whereas Switzerland
has the highest confectionery consumption in Europe and it is
comfortably down on obesity levels. There is no correlation. The
market is fairly static, certainly in the last ten years, and
children are eating no more. It really does not go anywhere close
to explaining the huge growth curve that we are starting to see
on levels of obesity. We have to look elsewhere for the major
drivers of that.
Q829 John Austin: All of us would agree
that a good, healthy breakfast is a good thing and cereal is one
of the ways of delivering it. You said added sugar gives you an
immediate burst of energy because it does not have to be broken
down in the way carbohydrate does. All the health evidence is
that we are consuming too much sugar. Is there not an argument
for reducing the amount of sugar in cereal products? You have
accepted it for salt.
Mr Mobsby: Yes. We are seeking
to reduce our salt levels. The evidence on the problems of salt
and health issues is probably a lot better and clearer than the
issue on sugar. I have not seen any issues that clearly demonstrate
there is a link between sugar and obesity. Maybe there is some
evidence I have not seen but I am not aware of it. We talk about
pre-sweetened breakfasts but I think it is important to get it
in context. We do a lot of analysis trying to understand exactly
what we contribute in the diet. Pre-sweetened cereals contribute
just seven per cent of the added sugars within the diet. In that
context, there are a lot of other things that provide a lot more
added sugar within the diet. Seven per cent, to me, is a low figure.
Q830 John Austin: Can I go on to the
type of product that you use in manufacturing generally? It became
quite clear to us in the United States that there is a massive
government subsidy in manufacture to the sugar industry. Millions
of gallons of corn syrup are produced which has to find a market
somewhere. Certainly Coca Cola uses corn syrup exclusively as
a sweetener. Is that true for Pepsi as well?
Mr Glenn: I would have to check
the details but I would imagine that would be the case. I would
emphasise that 60% of what Pepsi sells in the UK is no sugar.
Q831 John Austin: Are there health issues
in the way carbohydrate has to be broken down by the body into
sugars which are further broken down? Sucrose also has to be broken
down before it delivers the energy, whereas if you are using high
fructose corn syrup you are delivering it straight to the liver,
bypassing the bodily functions of breakdown. Are there health
implications?
Mr Glenn: If we bring it back
to the question of obesity which I thought was the term of reference
of the debate, I do not know the answer to your specific question.
There are a number of scientific theories bandied about on these
things and you have obviously read something that suggests there
is and I have not, but I am sure the Food Standards Agency would
be well equipped to advise whether it were a problem or not. To
come back to the notion of obesity, the simple message to people
is the only way we will make progress and getting diverted about
high fructose corn syrup and government subsidies may or may not
be helpful.
Q832 John Austin: We talk about calories
in and calories out. I believe you use palm oil in many of your
products which has a healthy tag because it is vegetable oil,
whereas it is mostly saturated fat, is it not?
Mr Hilton-Johnson: I do not know
specifically about palm oil. I do know that we made a change which
was broadly viewed as being positive to move to 100 per cent vegetable
oil in our cooking processes. This question has never come up
with me in this kind of context before and it has never been raised
by one of our nutritionists. We do have different cooking processes
in the UK as compared to the US. For example, we reduced trans
fatty acids by 50 per cent in the UK a number of years ago. It
is my understanding that they have not done that in the US, so
we have changed cooking processes and the fat content of what
we sell has gone down over the years. It is quite significantly
less than it was, say, in the mid-1980s.
Q833 John Austin: What were the principal
drivers that led you to move in that socially responsible way?
Mr Hilton-Johnson: I think it
was changing customer tastes.
Mr Glenn: Clearly, there is a
similar issue that applies to crisps and snacks. You are absolutely
right. We use a blended vegetable oil called Palmolin which is
relatively high in saturated fats. In the US they use a different
oil which is high in trans fatty acids. If I refer you back to
the submission and the data from the Pepsi Cola Report of 2002,
there is a lot of innovation going on in cooking oils. In the
US, there is a recognition that if you could reformulate the oil
blends to reduce trans fatty acids it would be a good thing. At
some considerable cost, the US changed its cooking oil. In the
UK, Walkers is also reformulating its core brands. We have a low
oil/low fat brand called Lites, which are cooked purely in a new
oil called high oleic sunflower oil. It has a very similar fat
profile to olive oil. It is very low in saturated fats. It is
hard to get; it is very expensive and we have put it into a small
part of our range but over the next few years we plan to blend
it into the oil that we use with a target of reducing saturated
fats by 50 per cent. You can question the motives. Why are we
doing this? Because we think it is going to stand well with the
consumer.
Mr Hilton-Johnson: I have just
been informed that when we moved to vegetable oil it was not palm
oil. It was rape seed oil.
Q834 Dr Naysmith: Earlier, we were talking
about the need to put out a simple message about the potential
dangers of some of the products you produce. I accept what was
said about a balanced diet. All of you seem to agree that there
is some merit in the idea of a simple message, even if it is only
something like calories in, calories out and making sure that
gets across more effectively. Yet, you all put out different messages
in your marketing strategies, particularly in terms of portion
size and super sizing. Recently, there has been a big concentration
on buying a bigger portion and getting it cheaper and there must
be a lot of temptation in that for people. That is clearly going
in the opposite direction. Particularly to McDonald's to start
with, super sizing encourages people to eat larger portions and
academic research shows that. The cost is very little so in purely
financial terms such offers are very hard to refuse. Could you
tell us what your company policy is on super sizing?
Mr Hilton-Johnson: Super sizing
accounts for two per cent of our sales. If you look at the average
portion now as compared with 20 years ago, it is lower in calories
and it is lower in fat because of a number of different initiatives,
not one single thing. We provide very clear nutritional information
to people, telling them exactly what they are consuming. We stress
the importance of a healthy, balanced diet.
Q835 Dr Naysmith: I find it very hard
to believe that it is only two per cent of your turnover.
Mr Hilton-Johnson: It is two per
cent of turnover and four per cent of meals which are super size
in the UK.
Q836 Dr Naysmith: When you are training
staff, is there any attempt to encourage them to encourage customers
to ask for a bigger portion if they ask for the standard size?
Mr Hilton-Johnson: Staff training
is obviously very wide ranging but there are a number of things
customers may be asked. They may be asked if they want their meals
to be larger.
Q837 Dr Naysmith: That is part of the
training?
Mr Hilton-Johnson: Yes.
Q838 Dr Naysmith: You encourage customers
to ask for bigger portions?
Mr Hilton-Johnson: We encourage
staff to ask questions and leave it to the customers to decide,
making sure that they are fully apprised of the nutritional information.
Q839 Mr Burstow: When you apprise them
of nutritional information do you at that point, when you are
offering a larger portion, draw attention to the leaflets? Is
that part of the training?
Mr Hilton-Johnson: It is not part
of the training. The leaflets are available if people want them.
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