Study Shows That Consumers Do Not Understand Clean Labels

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Clean labels can be defined as an understandable declaration of what is inside the food that we eat. Jargon indicating artificial ingredients like preservatives and synthetic additives are banned from the ingredient list. As much as possible, only natural ingredients are used in making clean label foods.

This particular term has been very popular since last year, and many food manufacturers and retail distributors have joined the bandwagon of producing and selling more foods with clean labels. The purpose of clean labeling is noble, but it seems that only a few consumers understood what clean labeling is all about.

What People Think About Clean Labels?

What do people think of clean labels? Some consumers believe that products with clean labels mean “free from” products. Customers automatically believe that products that are gluten-free, fat-free, and sugar-free are synonymous with clean labeling. But this is not necessarily true. You have to take note that clean labels use natural and easily understood ingredients.

In fact, more than 30% of the American population think clean label products are free from synthetic ingredients while another 30% believes that they are made from organic and natural ingredients. The remaining population has no clue what clean label means.

The misconception about clean labeling can be dangerous. The assumption that clean label products are gluten-free, for example, can lead to severe allergic reactions especially to people who are suffering from celiac disease. Moreover, clean labeling does not protect individuals from the unknown hazards of food additives especially those used in the packaging of the food. The thing is that just because clean labeling omits the use of synthetic ingredients does not mean that the packaging is already safe. According to the Environmental Defense Fund, packaging may still contain hazardous chemicals like perchlorate and phthalates that can enter the food.

Setting A Clear Definition

Establishing a clear definition of clean labeling is imperative, and until there is an official definition from the US Department of Agriculture (USDA) or Food and Drug Administration (FDA), food manufacturers and retail distributors will continue to take advantage of the opportunity. If this continues, consumers will most likely be confused with the definition just like healthy and natural.

Unfortunately, both the USDA and FDA have not yet committed to devoting their time to giving a precise definition of the term. But although the government failed to make a definition for clean label, the Center for Science in the Public Interest (CSPI) has created its definition that clean label uses substances–even with long names– that are safe although some are not. Clean label products are also healthier than their non-clean label counterparts since they are made from real food rather than synthetic imitations. Still, the absence of artificial ingredients does not make them too healthy as they can still contain excess amounts of salt and sugar.

Inspired by www.fooddive.com

Shoppers Willing To Spend Extra For Ingredients They Recognize

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Most shoppers today are more aware of the food and beverage products they buy. They opt for products made from organic and natural ingredients, and they value the transparency of product labels more than ever before.

In a recent survey conducted by Ingredients Communications, it revealed that 52% consumers are willing to spend 10% more on food products that contain ingredients they trust and recognize. The survey interviewed 1,300 consumers from North America, Europe, and the Asia-Pacific. The survey also noted that 18% of the respondents are willing to pay more than 10% for reliable brands.

Consumers from the United States are the ones most prepared to pay extra to 44% of the respondents responding yes. This is followed by shoppers from the Asia-Pacific including the Philippines (29%) and Malaysia (26%) indicating that Asia is an emerging market for food companies who want to improve their transparency and recognizability of the ingredients they use.

Co-Branding Allows Shoppers to Recognize Reliable Products Easily

So, what does this survey imply? It simply points to the importance of having clean labeling on food and beverage products. Consumers are becoming aware that many food companies are now using synthetic or artificial ingredients to make their products. These ingredients are now known to cause negative side effects to the body. The movement of going back to basics which include buying products made from all natural ingredients is becoming popular. Food manufacturers are using this movement to their advantage by rebranding their products and co-branding with their suppliers.

Co-branding has become hugely popular in the clean labeling movement. According to the director of Ingredient Communications, Richard Clarke, co-branding has been used in the tech industry to sell products like laptops. If the food industry uses it, it will be easier for the consumers to know which brands to trust because they have partnered with other reliable brands and ingredient suppliers. This will result in higher spending, repeat purchase, and stronger loyalty to the company.

While co-branding is a great way for shoppers to easily recognize the ingredients and brand of the product that they want to buy, it may lead to higher prices. This leaves food companies to shop around from among its co-branded suppliers to find ingredients that are also cheaper. Successful branding is still resulting in more revenues because shoppers are willing to pay more for products that are made from familiar ingredients.

Shoppers Make Informed Decisions When Shopping

While co-branding is a great strategy to make ingredients more recognizable to the consumers by partnering with equally reliable companies, there are other factors that influence the product choices and decisions of consumers. Today, many consumers are very critical about the decisions that they make when it comes to buying different types of products. With their savvy abilities and increasing awareness, they are able to recognize which ingredients are good and which ones are not. The ability to distinguish the good from the bad ingredients make consumers want to pay more.

Inspired by www.groceryheadquarters.com

Why Consumers Are Filing Class Action Lawsuits with Food Manufacturers

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Today’s consumers are vigilant. In fact, cases that have been filed against the food industry have increased since 2008. The class action lawsuits filed in 2008 went from 19 to 158 in 2015. According to food litigation group Perkins Coie LLP, the food industry has compiled 114 class actions since October last year (2016).

Examples of these lawsuits include Hershey’s not putting a lot of Kisses in their bags and P.F. Chang adding an extra charge to their gluten-free products. So why are food and beverage companies facing class action lawsuits from consumers? Many attorneys are also wondering the same thing.

Food companies are now becoming the target for the plaintiff’s bar. According to Yvonne McKenzie from Pepper Hamilton LLP, a legal firm that counsels food businesses that are in trouble, there are many reasons why food companies are facing a lot of legal lawsuits.

The Food Industry Has Untapped Deep Pockets

One of the most obvious reasons is that food companies have deep pockets. They have become a lucrative target for litigations. There are a lot of gray areas regarding federal regulation. For instance, the term “natural” has no official definition from the Food and Drug Administration (FDA), and consumers use this to file against companies making erroneous claims about their food and beverage made from natural ingredients. Other examples include the class action lawsuit against KIND Snacks for using the claim “Healthy” on their packaging and website.

Some Courts Are Willing To Entertain Claims In Lawsuits

Another reason for the rise in food and beverage lawsuits recently is some courts are just willing to consider even the most frivolous claims. For instance, one of the ridiculous lawsuits the food industry experienced last year was when plaintiffs accused Starbucks of putting too much foam in their lattes and too much ice in their iced coffee. In general, courts are quiet when it comes to getting rid of the cases and grant the motion to dismiss the case. Even entertaining the lawsuit is giving class action attorneys precedent to take more cases to court.

Increasingly Health-Conscious Public

So far this article has probably sounded like the big bad consumers are taking advantage of the food business, right? It would be too unfair to say that. In fact, one of the greatest reasons for increases in lawsuits is the increasing awareness of the consumers about the food and drinks that they buy.

Today, there are more health conscious consumers than ever. They scrutinize just about anything in their food. Many consumers feel that companies are not transparent enough and mislead consumers with catchy packaging and marketing.

Many factors interplay the complexity of legal actions filed against food and beverage industries, and since there will likely be more class actions that will be lodged in the future, food companies should be prepared.

Inspired by www.forbes.com

Private Label Innovation: Connecting To Millennials

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Private label brands are manufactured by a particular company under another company’s brands. Over the past few years, private labels have seen a growth in market share. In fact, during the Private Label Manufacturer Association show last year in Chicago, the association indicated that the business continues to grow by 5%.

Private labels are available in different types of industries from cosmetics to food. They are mostly lower cost alternatives to other types of brands. Nielsen noted that the store sales of private labels are estimated to be at $120 billion. Private label company giants like Aldi and Save-A-Lot have catered to retail store companies like Trader Joes and Whole Foods. According to the National Bureau of Economic Research, most consumers tend to patronize private label brands because they are cheaper than others.

Why Private Label Is Innovating

The popularity of private labels has presented opportunities to manufacturers of major brands to create products that appeal to private label shoppers. For example, Hormel Foods is launching its latest commercial retail team to help partners grow their private label strategies.

Private labels also need to take a step further to meet the demands of their customers. Private label brands are also venturing into healthier products. For instance, Ohio-based SmithFoods have started producing almond milk aside from traditionally manufacturing milk and other dairy products.  On the other hand, Perrysburg from Ohio manufactures not only private label frozen pizza and snacks but also “better for you” products with organic and gluten-free ingredients.

Millennials Are The Future Consumers

Neil Stern, a senior partner from McMillanDoolittle, noted that most food retailers in the United States are updating their private label offerings to meet the demands of their customers. For now, these private label brands are focusing on producing organic and natural products.

The direction towards healthier options is being driven by younger consumers in the market. Younger or millennial shoppers are now warming up to startup brands especially those that offer healthier choices. Millennials are considered the most aggressive of all types of consumers.

 

In a recent survey conducted by the PLMA, millennials agreed that they have the knack to try food created in different ways. Meaning that they opt for healthier options that are prepared in the most sustainable way. Their food choices have also reflected their eating habits. However, Millennials do not like to spend an exorbitant amount of money to buy their food. According to the same survey, 75% of millennials tend to shop in the supermarket, where bakery goods and dairy items top their list.

With this data, supermarkets can experience big payoffs by innovating their private labels to meet the eating habits of Millennials.  Store brands have the opportunity to compete with the well-recognized national brands and in some cases, win.

Inspired by www.foodbusinessnews.net

Clean Labels: From Trend To Movement

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Today’s consumer is more interested in eating fresher and cleaner foods. Industry experts have noticed that many food companies have adopted the movement for cleaner foods.  Companies like Campbell’s Soup and PepsiCo have implemented food transparency through clean labeling. There is also a rise in food start-ups applying clean labels with their new products.

Chief Marketing and Innovation Officer, Suzanne Ginestro from Campbell Soup, noted that modern consumers are moving towards cleaner labels, transparency, as well as opting for products that are healthier and have ingredients that are easier to understand. People want transparency on all kinds of products from household cleaning supplies to electronics. Consumers just want to know what is inside the products they are using.

Why Transparency And Clean Labeling? 

So why are people so particular about clean labeling and transparency? Becky Frankiewicz from Quaker Foods North America indicated that consumers want to have more choices and this can only be achieved if they know the ingredients of the products they are buying.

While clean labels promote companies to indicate all ingredients on their labels, it does not mean that they should only focus on healthy ingredients yet. Companies have adopted the clean label movement to prove that they care about their consumers and their products. It also enables consumers to make informed decisions about their purchases.

Some food manufacturers still include ingredients that will make their products more palatable and that means using fat and sugar. The clean label is there to educate consumers about the types of ingredients utilized in the product. It is all about giving customers access to different food choices.

Clean Label: Trend or Movement?

What started out as a fad has become a movement that will surely stay. Today, many food startups have found success in introducing healthier foods and beverages to consumers. Large food companies are also capitalizing on the opportunity by introducing healthier product choices to their customers. Executives from large food manufacturing companies noted that the clean label movement had pushed brands to go back to their old business practices.

For instance, the 140-year old company Quaker Foods first started using fresh ingredients and developed ways to package their products so that it is easier for the consumers who live in urban places to enjoy healthy foods—similar to those living on the farm.

From trend to movement, clean labels are here to stay. Brands that focus on delivering healthy food with simple ingredients will win, plain and simple. Don’t be surprised to see more acquisitions of small, successful brands over the next five years as large companies like PepsiCo try to a secure a competitive advantage in this evolving space.

Inspired by fortune.com

Confectionery Industry Goes Clean Label

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The confectionery market in the United States had an estimated value of $35.86 billion in 2016. The value is expected to rise to over $38.19 billion in the next four years. According to a market research company, Technavio, confectionery companies sold a total of 7.31 billion pounds of products last year.

The slow forecast of growth for the confectionery industry (0.81%) made industry leaders think twice about what they need to do to improve their sales. Strategies such as acquisitions, diversifying the portfolio, and alignment with consumer trends have been implemented. One of the strategies that this particular industry implemented was clean labeling.

Confectionery Challenges In Clean Labeling

The candy industry is known to use different flavors and vibrant colors of using artificial flavors and dye. The growing consumer demand for transparency and simple ingredients is a difficult situation for candy companies.

However, confectionery companies plan to stay true to their promise of clean labeling. In February this year, Mars, Inc. pledged to remove artificial colors from their gum, chocolate, and other food products within the next five years. Other confectionery giants like Nestle and Hershey’s followed suit.

Currently, most products produced by Mars, Inc. no longer contain artificial colors, but the company is still doing its best to clean their products from synthetic ingredients thoroughly. The challenge here is how candy companies will make their colorful candies like Skittles and M&M’s more natural.

While the purpose of clean labeling is to benefit the company and the consumers, the cost associated with it can be very immense. Using natural ingredients require substantial investments particularly for the smaller confectionery companies. It can be hard for smaller businesses to move in the direction of non-GMO and natural confectionery and it can take its toll in the economies of scale for the candy company.

Taste Still Rules in Priorities

With the challenges that lie in making confectionery without the use of artificial flavors and colors, most candy companies are now prioritizing the taste and quality of their products.  Marketing communications manager for Wrigley, Michelle Green, noted that consumers are not so keen at compromising the taste of their favorite sweets.

This has led companies to innovate on the types of products that they produce. In the recent Sweets & Snacks Expo, bold flavors were featured, and new lines of snack options were created including chocolate barks and bites that come with unusual flavor combinations like oranges, blueberries, and pomegranates.

Fruit combinations with conventional confectionary are not only an interesting take on healthy snacks, but it also helps improve the flavor without using artificial flavors and sweeteners. According to Susan Whiteside from the Washington chapter of the National Confectioners Association, chocolate and fruit combination will be the top trend in the confectionery industry that has increased forecasted revenue by as much as 116%.

Clean labeling is a popular trend in the food industry, and while some have quickly adapted to the trend, the confectionery industry finds a lot of obstacles for now.

Inspired by www.foodbusinessnews.net

Most Demanded Superfoods: Avocado, Turmeric, and Kale

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Superfoods are considered nutrient powerhouses that have a lot of antioxidants, vitamins, minerals, polyphenols, and other compounds that are known to be highly beneficial to the body. Eating superfoods can decrease the risk of diseases, extend life, and improve overall vitality of the body. According to Search Laboratory, there is a growing trend to consume more superfoods in the foods we eat every day.

Superfoods have become very popular in with people dedicated to a healthy lifestyle. Superfood consumption is very common among young adults who want to embrace healthy eating habits. It is interesting to take note that you can probably already find superfoods in your home.  In fact, a Google trend reports reveals that while there are many superfoods that you can buy from the supermarket, there are three that top the list–avocado, turmeric, and kale.

1. Superfoods: Avocado

Avocado is a buttery green fruit that is an essential ingredient in guacamole. As one of the most nutrient-dense foods in the world, Avocado contains high amounts of fiber, Vitamin E, magnesium, potassium, and folate.

Avocado also contains copious amounts of monounsaturated fat, a healthy kind of fat. The amount of monounsaturated fat in avocado is almost similar to the amount found in olive oil. The monounsaturated fat found in avocado is oleic acid. Oleic acid helps lower your cholesterol level particularly low-density lipoproteins (LDL), which are considered as the bad cholesterol. It can also increase the amount of good high-density lipoproteins (HDL).

2. Superfoods: Turmeric

turmeric superfoodsTurmeric is a favorite spice in Asian cuisine. For centuries, it has been used in South Asia as a medicine. Turmeric has a lot of health benefits, and it is known to treat arthritis, acne, heart diseases, and Parkinson’s disease. This particular spice contains high amounts of curcumin—a powerful antioxidant. Curcumin is also a potent anti-inflammatory compound that can relieve different types of inflammation in the body. It can help improve the condition of patients who have diabetes and even cancer.

Turmeric milk wherein turmeric powder is added to milk with honey is not the only way of enjoying this superfood. Turmeric can be prepared in other ways to get its benefits. You can make it into a tea and add a hint of black pepper to improve its potency.

3. Superfoods: Kale

kale superfood

Kale is a leafy green vegetable related to other cruciferous plants like cabbages and cauliflowers.  It is a powerhouse packed with beta-carotene (Vitamin A), Vitamin C, quercetin, and kaempferol. It is one of the few vegetables that have a high Oxygen Radical Absorbance Capacity (ORAC) value. This rating measures the ability of the plant compounds to scavenge free radicals.

Consumption of kale has many health benefits. It can prevent cardiovascular diseases, macular degeneration, Alzheimer’s disease, atherosclerosis, diabetes, and rheumatoid arthritis to name a few. It can also keep the integrity of the skin; that keeps it looking great. Kale also contains flavonoids like glucosinolates, sinigrin, glucobrassicin, and glucoraphanin that convert isothiocyanates in the gut that helps prevent or suppress the growth of multiple types of cancerous tumors.

Inspired by www.fooddive.com

Mintel’s 2017 Global Food and Drink Industry Trends

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Now that 2016 is over, it’s time to look at the food and beverage trends shaping up to make an impact in 2017. Mintel recently announced the top six trends that they believe will see fast growth this year. Check out their predictions below!

1. Traditional Processing

While our food today is made using modern processing, many people are now opting for foods made by conventional processing techniques. Companies are looking at using age-old formulation as well as classic flavors. People tend to view these foods as safe, reliable, and recognizable. This trend can be attributed to the recent rise of ancient recipes, cooking practices, and traditions that have resurfaced to incite the feeling of familiarity in the kitchen and food.

2. Plant-Based Formulation

Plant-based diets are becoming more popular, and Mintel expects this to be a huge area for growth in the industry. As a result, the food and drink industry is developing more products that emphasize using plant-based ingredients. This trend will not only be perfect for vegans and vegetarians but also flexitarians. We predict there will be an increased consumption of vegetables, fruits, seeds, nuts, grains and other botanical products.

3. Zero Food Waste

The year 2017 will be the year of the environment. But how does that relate to food? The answer is zero food waste. Today, many food manufacturers and restaurant owners want to address the growing problem of food waste. There will be an increasing awareness among people to use “ugly” produce as well as repurposing food ingredients to avoid wastage.

4. Night Shift Market

In today’s fast-paced life, many people have to work at night when we are all asleep. This lifestyle creates a new market niche for food manufacturers. Companies are developing products that are solely dedicated to nighttime workers as well as those who stay up late at night. Products such as teas made from lavender and chamomile are now introduced to night owls so that they can relax better just before their bedtime.

5. Healthy Food for Everyone

In the past years, only people from the higher income brackets could afford to eat healthily. Fortunately, 2017 will be the year when even lower-income consumers can afford to eat healthily.  2016 helped drive this change with companies like Annie’s leading the Everybunny campaign and other organizations lobbying for subsidized fruits and vegetables to keep prices low.

6. Convenient Healthy Foods

Convenience has been driving change in food for over 30 years, but the new opportunity is in creating fast, healthy foods. People want to eat food conveniently so many food and drink manufacturers are developing new ways to deliver their products faster without compromising the taste and nutritional content.

If you have noticed, the trends of 2017 revolve around the idea of eating convenient, healthy, and reliable foods. It’s not that surprising if you’ve watched the market over the past few years. It will be interesting to see which companies take advantage of these growth opportunities in 2017 and beyond.

Inspired by www.mintel.com