The Increasing Demand for Transparency, Clean Labels, and What Brands Need to Consider

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The shift toward clean labels, a movement named trend of the year in 2015, is hardly a trend anymore as it has become the rule.

Transparency in product ingredients and brands’ abilities to provide accurate and comprehensive product information has become increasingly important to consumers, a shift we’ve seen concurrent with the vast amount of information that has come out regarding the negative effects of consuming artificial ingredients in products, along with the infinite number of publications and resources that are now available to us as consumers. Grocery shoppers today are armed with the knowledge to scrutinize brands and their labels like never before, and to make informed, healthy decisions.

Accompanying shifts, including brand loyalty becoming increasingly less important, and consumers’ willingness to pay more for a better choice, are big factors in convincing brands to clean up their labels.  In a 2017 study by Label Insight, 60% of surveyed consumers say they trust the brand less when they see ingredients they don’t recognize or find confusing. 64% of said they would be willing more to switch to another brand if that brand shared more detailed and understandable product information – and 54% said they would be willing to pay more for a product with ingredients they understand.  These are numbers brands simply can’t ignore.

We’ve seen many big players already making significant steps in recent years toward clean labels. Dating back to 2015, names like Nestle, General Mills, Campbell Soup, Kraft and Chipotle made promises to clean up their ingredients. Since, we’ve seen McDonald’s and Oscar Mayar jump on board, along with Target and Hy-Vee, and even Dunkin’ Donuts joining in early this year.

It’s a fine line companies are straddling, working to meet the demands of a more sophisticated consumer asking for transparency and clean ingredient lists, while maintaining consistency in their product and continuing to satisfy their longtime and loyal customers– who may or may not be as concerned with the ingredient list as they are with the taste, flavor and texture they’ve come to know and love from the brands’ product.

But at what cost to the company? Aside from the hurdles companies face in changing the recipe for their products, in finding ingredients to substitute for the artificial ones that look and taste the same – then, working with potentially complex sourcing issues and often times high conversion costs

Some brands have even faced backlash from some of their loyal customers in their efforts to clean up their labels – perhaps reasoning behind Kraft’s decision to quietly remove artificial dyes from their longtime fan-favorite Mac and Cheese, in an effort to prove to its loyalists that they can have the same beloved product, sans the artificial additives. After 3 years of work to reformulate the recipe (following a multitude of demands from fans to remove the artificial dyes), the brand announced that the new product would hit shelves in January 2016. Kraft knowingly began selling the revamped product in December 2015, and later confessed it as “the world’s largest blind taste test,” further noting that “fifty million boxes later…people didn’t notice a difference.”

Another company finding alternative ways to more seamlessly make the shift toward clean labels, General Mills, who announced they would be bringing the original Trix recipe back to shelves after consumers raised doubts about their new ‘natural’ recipe, that allegedly made the cereal’s taste “less fruity” and it’s color appear “washed out.”  The company was proud to announce they will be keeping the natural recipe on shelves along with this addition of the discontinued version that was Trix for 63 years. Now we can be assured Trix aren’t just for kids, but the clean-ingredient lovers, too – some of whom may be willing to sacrifice flavor and appearance for the healthier alternative.

This proves to show not all consumers are equally concerned with making clean choices when it comes to the products they’re purchasing, particularly if it has noticeable changes in their favorite and go-to products.  There are, of course, those that may have little to no concern in choosing clean labels and have no motive to prioritize them in their purchase decisions. Even those consumers that do seek a clean-label are on a broad varied spectrum.  A new report released at this year’s Natural Products Expo West trade show by ingredient supplier Kerry, provides insight on the customers likely to purchase clean-label products and categorized them into 5 types of customers. From “label seekers”: the most well-informed and expectant of clean-labels, also willing to pay more for clean-label products and certification, to “thrifty traditionalists,” who aren’t largely concerned with clean-labels but look for changes in their food choices due to medical necessity.

Another driving force behind the clean label shift that shouldn’t go unmentioned, is the increasing demand by grocers for clean labels, as the competition of natural food stores continues to increase.

The bottom-line is: brands need to make a number of considerations as the market in which they’re selling is rapidly evolving, with increased demands of the educated shopper and retailers, alike.

Albeit, there are sure to be significant costs and efforts associated with making the transition to clean labels, it is a change that food brands must consider if they want their products to withstand the test of time and evolution in the industry as we continue this shift toward transparency and the demand for clean ingredient labels.

They should consider each product and recipe change on a case-by-case basis when it comes to their marketing strategy and how best to communicate their changes and transparency in their products’ composition, to what may be a broad assortment of audiences – to best meet these demands of the new shopper mindset, while also maintaining relationships with their longtime loyalists.