New report flags impact investment opportunities in the UK food industry | Big Society Capital

You are here

New report flags impact investment opportunities in the UK food industry

Big Society Capital, together with the Guy's & St Thomas' Charity and the Food Foundation have today (19th November) released a new report: Healthy Returns: Opportunities for market-based solutions to childhood obesity.

This report explores opportunities for investors and funders to help address the prevalence of childhood obesity in urban, deprived communities through impact investment.

Investors have the opportunity to help meet the demand among low-income families earning less than £20,000 who are seeking convenient, affordable and healthy food options that don’t compromise on taste. Today, families are forced to sacrifice at least one element, and nutritional value is often the first to go. With the food spend of this group estimated at £6.5 billion last year1, there is a sizeable market-opportunity for ‘challenger’ food brands to step in. 

In America, impact investment is already helping to lead the way in affordable convenience-food. California based FreshWorks is a loan and grant program providing financing to food enterprises who are increasing access to affordable, healthy food in low-income communities. FreshWorks raised £125 million loan fund from institutional investors including: JP Morgan Chase, Citi Community Capital, Morgan Stanley and Bank of America alongside £20.4 million of grants and other lending and £120.5 million of new markets tax credits2.

This blended finance package helped FreshWorks achieve significant impact through increased access to healthy fresh food for more than 800,000 Californians, creating or retaining more than 1,900 jobs and generating hundreds of millions of dollars in economic impact3,4. For the debt investors, they received healthy returns between 4-7%5.

Stephen Muers, Head of Strategy and Market Development at Big Society Capital, said:

“With the rate of childhood obesity continuing to rise, and those living in more deprived areas being disproportionately affected, the opportunity to achieve social impact through investment is clear. However, despite a growing number of social entrepreneurs focused in this area, there are very few investors able to support these businesses to increase their scale and reach sustainability.  

“This is where we felt Big Society Capital could make a difference – by helping to support challenger businesses to scale with social investment and specialist support.  

“We look forward to working with Guy’s and St Thomas’ Charity and others to help tackle this pressing social issue.”  

Sarah Hickey, Childhood Obesity Programme Director at Guy’s and St Thomas’ Charity, said:

“Research shows that our food environments today are making it difficult for families to eat well, particularly those living in urban and deprived areas. Our ten-year childhood obesity programme is looking to change food environments for the better, starting by understanding the opportunities and barriers to families accessing healthier diets.

The unique combination of data in this report has helped us understand what families on lower incomes eat and where they buy food, and how trends are changing. We’ll be using this insight to design the support infrastructure that helps the emerging ‘good food’ challenger brand sector to grow sustainably, and hope that other philanthropists and investors will join us in this mission.”

Anna Taylor, Chief Executive, The Food Foundation said:

“This report reveals that the amount of unhealthy food consumed in the UK is similar right across the income spectrum, but children in poorer households are eating even less fruit and vegetables than their wealthier counterparts.

“We show there are genuine market opportunities for affordable, appealing and convenient healthy food options. We do need policy measures to tackle childhood obesity, but market-based approaches offer an exciting chance to also develop financially sustainable solutions to the biggest public health challenge of our time.”

-ENDS-

The full report can be found here

NOTES TO EDITORS

1 Healthy Returns: Opportunities for market-based solutions to childhood obesity pg 10

2 Healthy Returns: Opportunities for market-based solutions to childhood obesity pg 53

3 California Freshworks Fund, “California FreshWorks Food Access Report,” 2016

4 FreshWorks Fund, “The Social and Economic Impacts of FreshWorks,” 2016

5 Healthy Returns: Opportunities for market-based solutions to childhood obesity, pg 54

About the report

This report was produced for Guy’s and St Thomas’ Charity and Big Society Capital by a team coordinated by The Food Foundation. Full methodology appendices can be provided on request.

In order to complement existing market and policy reports, information was analysed from three leading surveys in the UK. These the National Diet and Nutrition Survey Rolling Programme (NDNS) (combined years 2008-2016), the 2015/2016 Living Costs and Food Survey (LCFS) and the Kantar Worldpanel for UK (2016).

In researching the food businesses and their support organisations that informed this report, researchers conducted online research of 84 organisations; of which, 17 completed an online survey and 19 were interviewed.

About Big Society Capital

Big Society Capital improves the lives of people in the UK by connecting social investment to charities and social enterprises. We know that investment can help charities and social enterprises achieve more. We believe the greatest chance to improve lives comes when investors and enterprises are both motivated by social mission.

We engage with investors, fund managers, charities and social enterprises to make it easier to use social investment. With our co-investors, we have made over £1.3 billion of new capital available to organisations with a social mission, through investments into fund managers and social banks. We have a special focus on: providing homes for people in need; strengthening communities; and early action to prevent problems

www.bigsocietycapital.com

About Guy’s and St Thomas’ Charity

We’re an independent, place-based foundation. We work with Guy’s and St Thomas’ NHS Foundation Trust and others to improve the health of people in the London boroughs of Lambeth and Southwark.

Childhood obesity is a complex global issue and a major challenge in Lambeth and Southwark, where local rates are among the highest in the country. We are running an ambitious programme focusing on the relationship between child obesity and inequality. Our goal is to close the ‘obesity deprivation gap’ in our boroughs – bringing the high obesity levels in the most disadvantaged areas down to the level of the more affluent ones.

www.gsttcharity.org.uk

About the Food Foundation

The Food Foundation is an independent think tank that tackles the growing challenges facing the UK’s food system in the interests of the UK public.  We provide clear analysis of the problems caused by the food system and the role of policy and practice in addressing these.  We develop and articulate food policies that support and guide the UK public to make choices that improve their health and well-being and we inform and generate demand for new and better public and private sector policy and practice.

www.foodfoundation.org.uk

Last updated | 
21 November 2018