Product Transparency and an Industry Renewing Its Purpose

Product Transparency and an Industry Renewing Its Purpose

By | August 10th, 2016

Go to a store. Pick up a food product. Read the ingredients label.

You might see words like Acetic anhydride, Benzoin Resin, Benzoyl Peroxide, Calcium hypochiorite, Lactiylic sterate, Paracetic acid, Spermoil hydrogenated, Xanthan gum or Zinc Gluconate. All are permissible ingredients in food products and are listed in the FDA’s Generally Recognized as Safe or GRAS list.

Today… consumers are having a moment of hesitation and taking a pause. Today … more and more consumers are asking, “What’s in this food?” That simple question has become a great challenge to the industry, as it has for similar reasons in health and beauty care, household products and hard goods.

Surveys are indicating that consumers (nearly two-thirds) want more product knowledge from the agriculture community and food companies.

For the last 50 years large brand name products in supermarkets have commanded more demand and higher prices. Those days, however, may be numbered. Vani Hari, author and food activist notes that “Consumers are becoming very distrusting of the food brands they grew up with, rejecting the artificial ingredients those foods contain. They are now opting for new start-ups that are putting organic, non-GMO [genetically modified] foods on the market.” National brands are responding with reformulation efforts, hoping to win back these ingredient-conscious consumers.

Edward Jones analyst Jack Russo says of the major packaged-food companies: “In some ways it’s a strange turn of events. The idea of ‘processing’—from ancient techniques of salting and curing to the modern arsenal of artificial preservatives arose to make sure the food we ate didn’t make us sick.  Today many fear that it’s the processed food itself that’s making us unhealthy.” Analyst Robert Moskow noted that today consumers…“have more and more questions about why this bread lasts 25 days without going stale.”

Brand manufacturers are responding to this shift in consumer interest. Richard Smucker, CEO of his family’s namesake jelly giant asked, “We look at our business and say, ‘How can we remake ourselves?’” Campbell president and CEO Denise Morrison pointed out at a recent investor conference that 400 food start-ups have absorbed more than $6 billion in funding, which raises the stakes for big consumer brands who want to remain relevant. Morrison went on to say, “We understand that increasing numbers of consumers are seeking authentic, genuine food experiences, and we know that they are skeptical of the ability of large, long-established food companies to deliver them.”

The question is, what can brands do to restore consumer trust in the food we eat?

With steadily increasingly interest in understanding what’s in their food, consumers want –dare we say, are hungering for– a farm to fork view. They want to know where it was grown, how it was grown, and how the animals and workers and environments were treated. Today, consumers have health and wellness goals, need more information for special diets, including potential ingredient allergens. They are also looking for and demanding total product information transparency. In contrast with previous generational expectations for convenience, price, and taste, today’s consumers also want more information about food safety, nutrition and social responsibility.

Consumers want simplicity in their food. They want their meals to contain ingredients that they can actually picture in their heads and pronounce with words they actually understand.

Evidence of an industry and government response that is shifting towards more transparency is mounting:

  • McDonald’s just announced in August of this year that it will eliminate undesirable ingredients from its food. Chicken Nuggets and other items will be made without artificial preservatives; removing high fructose corn syrup from its burger buns; switching from margarine to butter for its Egg McMuffins; and changing its salad mixture to include kale and spinach. Dunkin’ Donuts has promised to put more egg in its egg patty. Taco Bell has announced that it will switch to actual black pepper rather than the current “black pepper flavor.”
  • The FDA’s new Nutrition Label requirements are final, and all US brands must comply with updated packaging by July 26, 2018. Some brands might see these requirements as either unnecessary or burdensome. Others will see the FDA requirements as an opportunity to help consumers to make informed decisions for healthier eating.

A new, more informative on-package information format is a much needed and an important step. However, today’s consumers are different. They are tech-savvy, health, environmentally and socially conscious. They are connected to countless intersecting online communities that search for and share information in real-time, making them brand stewards in their own right.

In this continued transformation in the way in which we consume and think about food, consumers –all of us, actually– aren’t just calling for more transparency, we’re asking specific questions, and we are willing to devote the time and effort in our search for answers.

Consumers want to know more about our food than can fit on a standard product label, demanding super-transparency. Two other technology trends are beginning to answer this requisite: blogs and enhanced product specific data access.

The trustworthiness of blogs and social media is increasing according to a 2016 Sullivan Higdon & Sink survey of over 2,000 adults – “Blogs are becoming more trusted, mainstream and legitimate sources of information about food production processes and practices. The credibility and trustworthiness of blogs may depend on the established reputation of the blogger or the brand as a whole. Food companies who aim to produce unique and brand-specific blogs must position themselves as trusted sources of information on industry-related topics.” Respondents were asked, “How trustworthy are the following sources of food production information? Very/Somewhat Trustworthy.” Trustworthiness is up from 18% in 2012 to 33% in 2016.

On enhanced product specific data access, the joint Grocery Manufacturers Association (GMA), Food Marketing Institute (FMI) initiative on the recently launched SmartLabel –which is supported by a broad coalition, including GS1 US and 1WorldSync– is another example of how enhanced technology can be used to meet consumer demands for transparency.

SmartLabel recognizes the need for brands to create a standardized method for sharing product information in a convenient, easy-to-understand, digital format. The SmartLabel seeks to meet this need, giving consumers easy, instant access to detailed product information. According to the GMA and FMI, SmartLabel features/attributes include:

“Online landing pages that are accessible by smartphones, tablets and desktops, consumers can find product information organized in a consistent manner, including: allergens, ingredient sourcing practices, third-party certifications, social compliance and sustainability programs, usage instructions, advisories and safe handling instructions, and company and brand information.”

“Going beyond the product label makes sharing additional product information with consumers more attainable and sustainable for brands and retailers. The result is more information, and consequently, more transparency.”

As we leave off, a final question: is there any evidence that these efforts are having an effect on consumer perceptions concerning transparency? Yes!

The Sullivan Higdon & Sink 2016 survey also found that:

“Food production knowledge is increasing. More than one-third (35%) of consumers indicate good or excellent food production knowledge, a significant improvement compared to 24% in 2014. There has also been a discernable shift from those with average, fair or poor knowledge to those who claim to have good or excellent knowledge.”

Perhaps not since the inception of our industry has there been such a groundswell of interest and energy for understanding not just what manufacturers and retailers think consumers want, but using the power of social listening in a digital age, we see an industry re-committing itself to providing what consumers actually want and need.

Hail the consumer!