Anthony Fletcher, the previous chief of snack manufacturers Graze and Harmless smoothies, was in quest of a brand new wholesome consuming challenge when he landed in an unlikely class: donuts.

His fledgling model City Legend, launched a yr in the past, goes face to face with Krispy Kreme in UK supermarkets because it seeks to influence hungry shoppers to modify to a lower-sugar, lower-calorie various.

His banoffee pie, strawberry cupcake and “Choc Social gathering” confections, made utilizing a patented course of that “units” the dough utilizing steam as a substitute of deep-fat frying, place him amongst a crop of start-ups in search of to displace household-name meals manufacturers with more healthy choices.

These start-ups are additionally set to learn from new anti-obesity rules within the UK, which limits the place supermarkets can place meals which are excessive in fats, sugar and salt (HFSS) — however not variations with considerably more healthy components.

“The thought for City Legend is to not ask the buyer to vary. . . it is taking the junk out of the junk meals fairly than making one thing that seems totally different to the buyer,” Fletcher mentioned.

“Krispy Kreme is a deeply indulgent product that’s excessive in all kinds of issues. We needed to recreate that style expertise with out the upper ranges of sugar, fats and energy — that was our outrageous imaginative and prescient.”

The UK’s weight problems drawback, one of many worst in Europe, has put packaged meals firms within the highlight. Unilever, below strain from traders, final month printed a diet evaluation of its portfolio that discovered solely 35 per cent fell exterior the HFSS class.

Corporations resembling Unilever, which makes Magnum and Ben & Jerry’s ice lotions and Hellmann’s mayonnaise, are acutely aware of adjusting client habits and regulatory pressures to offer a more healthy providing. Unilever set out new diet targets this yr. It purchased Graze, which makes wholesome snacks resembling roasted nuts and seeds, in 2019.

But entrepreneurs resembling Fletcher consider one thing additional is required. His newest enterprise was impressed by a dialog with a senior public well being official, who advised him general UK diets continued to deteriorate yearly regardless of voluntary sugar discount targets for the trade — and regardless of the expansion of firms like Graze, which reported annual revenues of £38mn in 2020, the primary yr after it was purchased.

The rise of the wholesome snack model “had barely moved the needle”, he mentioned. “I did not wish to do one other premium, healthful product.”

As a substitute, he turned to donuts as a part of an try to make more healthy meals accessible and reasonably priced to these most susceptible to weight problems.

Public well being teams resembling Impression on City Well being, a part of the non-profit Man’s & St Thomas’ Basis, argue that low-income households usually tend to have poor diets due to the excessive costs of wholesome merchandise, a proliferation of unhealthy meals in disadvantaged areas, and an absence of “cash and headspace” to organize healthful meals.

“[For companies] unhealthy meals is cheaper to provide, is tasty and sells,” mentioned Louis Bedwell, managing director at enterprise capital agency Mission Ventures.

Whereas the UK’s new guidelines have prompted some adjustments, “there are more healthy snack choices popping up however they’re in a small set of classes, stocked in sure shops and are sometimes dearer”, mentioned Bedwell.

Multinationals are sometimes reluctant to take dangers on new manufacturers or more healthy variations of present ones, particularly after a collection of failures in areas resembling low-sugar chocolate.

In the meantime, about £42mn of enterprise capital funding into “wholesome” meals classes between 2018 and 2022 was dwarfed by, for instance, the £296mn plunged into alcoholic drinks manufacturers, in keeping with company finance group Oghma Companions.

To attempt to fill the hole, Mission Ventures and Impression on City Well being have arrange the Good Meals Program, which supplies funding and recommendation to “wholesome challenger manufacturers”, together with City Legend, that make merchandise reasonably priced in classes with few moderately priced and nutritious choices. They need these manufacturers not solely to succeed however to affect international meals makers.

One other model supported by the scheme is seven-year-old Jim Jams chocolate unfold, which is mounting a direct problem to Nutella. Others embody Naturelly jelly, made with fruit juice and added fiber, and Rootles chocolate biscuits made with 40 per cent root greens.

Such merchandise should not with out their very own points. Many low-sugar manufacturers depend on sweeteners referred to as polyols, which may have a laxative impact when consumed in giant portions or by individuals with digestive issues.

The merchandise might want to present that they will tempt shoppers to attempt a brand new model, style ok to attract repeat customized, and that patrons is not going to eat giant portions emboldened by decrease calorie counts.

Bakery merchandise resembling donuts are seen as one of the vital tough classes to recreate in more healthy variations, mentioned Fletcher, with chocolate probably the most technically difficult. However new applied sciences for recreating texture and taste are enabling extra convincing options, he added.

Nonetheless, Ferrero, the multinational that created Nutella, mentioned that “reformulation isn’t an easy choice. We’ve got not but discovered various recipes that our shoppers choose.”

It added: “The basic difficulty in meals consumption is energy, not sugar, so adjustments that cut back sugar however enhance energy could be counter-productive.”

Ferrero mentioned Nutella’s focus in well being phrases was portion management, with its advertising and marketing supplies encouraging shoppers to eat a single 15g serving. Krispy Kreme didn’t reply to a request for remark. It additionally gives smaller “bits” servings.

Specialists agree that a lot wider change is required to deal with weight problems, together with a shift in direction of consuming extra vegatables and fruits.

Katharine Jenner, director at Weight problems Well being Alliance, mentioned: “We want to see rather more of a stage taking part in area in the case of what’s on our cabinets — whether it is attainable to make donuts and chocolate spreads with much less sugar, then all donuts and chocolate spreads might have much less sugar.

“Meals companies have to be adequately incentivized, and for that we want political will from the very best ranges of presidency.”

For the primary cohort of manufacturers participating within the Good Meals Program, the take a look at is reputation. Jim Jams is obtainable in all UK supermarkets and the Good Meals Program mentioned there had been “important switching” to the product amongst low-income households. The corporate turned worthwhile this yr.

City Legend donuts can be found in London branches of Tesco and in Selfridges, with a trial underway at J Sainsbury’s. Fletcher acknowledged it was early days, however mentioned he needed to transform a big variety of patrons from Krispy Kreme, which introduced in $1.4bn of web revenues final yr.

Donuts are “a product that makes individuals really feel good and impacts their well being — that is why I picked it”, he mentioned. “A more healthy brioche wasn’t going to vary the world.”