Obesity rates have doubled in the last 30 years. This is because our food environment - how food is promoted, advertised and displayed to us - drives people to over-consume. 

Food purchased in the out-of-home (OOH) sector comes from places like coffee shops, pubs, bakeries, restaurants and takeaways. It is on average much higher in calories than food bought to eat at home. Around 14% of our daily calories are consumed OOH, and evidence suggests that people on lower incomes may consume more from these outlets than the rest of the population. The sector is also expanding rapidly - OOH sales increased by 10.6% between 2021-2023.

The government recently announced a new healthy food standard: mandatory reporting and healthy sales targets for all large food businesses. Nesta has demonstrated how health targets could be implemented in supermarket retailers. Our latest research - during which we consulted with industry stakeholders, policymakers and NGOs - explores how health targets could be applied to the OOH sector.

Large-chain businesses (with 250+ employees) make up ~35% of total consumer spend. They also have greater resources and data infrastructure than micro, small and medium enterprises (SMEs). SMEs make up the remaining 65% of consumer spend, but have less capacity to report nutritional data and link sales data to this nutritional information. While health targets should ideally apply to all OOH businesses to ensure a level playing field, these compliance challenges make these measures unfeasible for SMEs right now. 

Policymakers should not delay policy intervention for large OOH businesses given their greater readiness to drive meaningful change, while considering options for SMEs in parallel.

Existing measures to improve the healthiness of the OOH sector have lacked effectiveness. Initial improvements to the salt content of food through voluntary targets have stalled, and similar measures for sugar and calories have largely failed to make tangible change. In fact, over the course of voluntary targets being in place, some OOH food products have become more calorific, not less. 

Put plainly, mandatory policy is essential to ensure impactful action from businesses. It is promising that the announced healthy food standard commits to mandatory targets, which stand the best chance of effectiveness.

A sales-weighted health metric accounts for what consumers are actually buying - as opposed to a simple average which gives equal weight to all products, regardless of sales. For example, a sales-weighted metric will capture whether a restaurant sells more calorific burgers than healthy salads. 

Our analysis identifies two viable metrics for the OOH sector, which you can read more about in our report. Both metrics have tradeoffs. The ultimate choice by policymakers will need further analysis, which will require submission of data by businesses to assess.

We recommend setting health targets for supermarkets at the level of the current highest performer - an ‘absolute’ target. However, this approach isn’t feasible for OOH given the diversity of business models, cuisines and products in the market. 

We found that a group absolute target (set at the level of the top performer of a group of similar businesses), or a relative target (based on an X% improvement from an individual business’s own baseline), both offer viable options for the OOH sector. A group absolute target likely maximises fairness, while a relative target enhances simplicity. Further analysis of real-world business data will be necessary to choose between these options, which is why expediting mandatory data reporting is key. 

Our modelling suggests that either a group absolute or a relative reduction target could lead to an approximate 2.5% reduction in obesity over three years of targets being achieved. This achievable and economically viable approach would translate to around £1.5 billion in annual cost savings to society.

The impact of targets for supermarkets is likely to be significantly higher than for OOH businesses (~20% reduction in prevalence of obesity over three years compared to ~2.5%). This is because sales from major supermarkets account for a much higher proportion of our diets (over 80%). 

The implementation of targets for supermarkets is also likely to be feasible at a faster pace than for OOH. This is due to fewer unanswered policy questions (the metric type and target are clear), the smaller number of businesses involved and the readiness of those businesses to comply. 

Key policy development questions remain for the OOH sector - answering these will require data from large food businesses on the healthiness of the food they sell. The government should therefore expedite mandatory data reporting to enable target setting.

However, to deliver maximum public health impact, the government should not let the challenge of setting targets for large OOH businesses delay the process of setting targets for grocery retailers.

Read our latest report on health targets for the out-of-home sector to explore our findings and recommendations in full detail.