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Sugar’s role in coronavirus fatalities

Sugar’s role in coronavirus fatalities

29-07-2020 | Insight

The sugar content of food and drinks played an unseen role in the Covid-19 death toll, says engagement specialist Peter van der Werf.

  • Peter van der Werf
    Peter
    van der Werf
    Engagement Specialist

Speed read

  • One-third of people who died from Covid-19 had diabetes
  • Engagement program sought to remove sugar from foods
  • Companies have made progress but reformulation is slow

He says food companies need to accelerate plans to take sugar out of their products, as it is a major cause of obesity and diabetes, which has made people more vulnerable to dying from the coronavirus. 

Research by the UK’s National Health Service shows that one-third of the people who died from Covid-19 had either Type 1 or Type 2 diabetes, a condition in which the body can’t make its own insulin, requiring lifelong treatment.1

The coronavirus is known to more adversely affect people with underlying health conditions as it causes the immune system to go haywire, leading to a higher death toll among diabetics, along with the elderly and infirm. More than 400 million people in the world now have diabetes, or one in ten of the adult population, while one-third of all US adults are obese.2

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Risks to companies as well

Aside from the health issues, the negative impact on the performance of a company using sugar in its processes can be significant. The costs associated with obesity include increased health care expenses, decreased productivity and premature deaths. Because of this, food and beverage companies face regulatory, reputational, legal and market risks.

Examples include governments in both high- and lower-income countries that are introducing a sugar tax, or are restricting advertising of less-healthy products to children. Regulation is increasing over the use of health and nutrition claims, while food labelling requirements are being strengthened. Ultimately, companies that do not adjust to changing dietary preferences may lose market share, revenues and profits.

Global obesity crisis

“Sugar has contributed strongly to the current global obesity crisis, and to the onset of diabetes, given its presence in almost all packaged food or drinks,” says Van der Werf, who focuses on engagement with the sector. 

“The economic costs of obesity are clear; USD 2 trillion annually, or nearly 3% of global GDP. It is estimated that obesity, along with smoking and armed violence, is one of the top three social burdens induced by humans.”  

“Sugar has a direct link with one-third of the Covid-19 fatalities as these were associated with diabetes. In the US, researchers found that people with diabetes who contracted Covid-19 were twice as likely to die within a week than non-diabetic patients.”

Engagement program

Robeco is concluding a three-year engagement program with eight companies in the food and beverage industry that aimed to encourage them to use less sugar in their products. 

“The engagement called on them to speed up product reformulation and innovation to ensure a successful business model in the long run, and all eight companies have made good progress with this,” Van der Werf says. “This has led to a 10% drop in the sugar content on average.”

“But when it comes to communicating this, many companies initially opted for ‘stealth reformulation’ – by only mentioning on the back of the packet that the product’s sugar content has been reduced. This is due to the negative reaction that their consumers often give to prominent announcements of sugar reduction, resulting in a sharp drop in sales.” 

“We also remain concerned about the large volumes of sugar that are still sold to consumers as part of processed foods, especially as this pertains to some of the flagship legacy products that remain a very important cornerstone of their product portfolios.” 

Innovation is vital

Innovation has proved key in producing more nutritious foods that are increasingly demanded by a more health-conscious society, he says. The companies that don’t reformulate face a backlash for the ‘social risks of sugar’ in the same way that tobacco eventually became socially unacceptable to the mass market.

“Not all companies under engagement have made the level of progress on innovation management that we expect from the food industry,” Van der Werf says. “The leading companies have made larger shifts in strategy towards healthy product categories, which we think provides the best future-proof strategy when it comes to minimizing the social risk of sugar.”

“Other companies indicated that in general, having healthy attributes are an important consideration for any new product launch. However, some remain heavily vested in high-sugar carbonated soft drinks, or are expanding into energy drinks with a high sugar content. Or they are continuing to focus on highly processed food products which in most cases need sugar to make them palatable for consumers.”

Covid-19 has raised the game

With a much greater focus on the fragility of human health brought about by the coronavirus pandemic, Van der Werf says this may now accelerate moves to lower the sugar content of food and drinks. 

“The Covid-19 pandemic has further strengthened our view that obesity is an important global health risk with a significant economic impact,” he says. 

“The food industry will be held accountable for its future role in marketing high-sugar products for consumers who are not able to make dietary choices that prevent obesity. This obesity risk therefore continues to be a long-term overhang for the industry.”

1https://www.theguardian.com/society/2020/may/20/type-1-diabetics-type-2-coronavirus-nhs-study
2https://www.diabetes.co.uk/diabetes-prevalence.html

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This information is for informational purposes only and should not be construed as an offer to sell or an invitation to buy any securities or products, nor as investment advice or recommendation.
The contents of this document have not been reviewed by the Monetary Authority of Singapore (“MAS”). Robeco Singapore Private Limited holds a capital markets services license for fund management issued by the MAS and is subject to certain clientele restrictions under such license.
An investment will involve a high degree of risk, and you should consider carefully whether an investment is suitable for you.

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