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From natural to clean: Who’s really defining the trends shaping the food industry?

Posted by Dagan Xavier on June 15, 2016

Lots of consumers talk about eating “clean,” sticking to natural foods, and avoiding all things artificial. But finding foods that fit these parameters can be tricky because many of these attributes aren’t clearly defined or regulated.

Take, for instance, the term “natural,” which is found in over 130,000 claims in the Label Insight database. The FDA has not objected to using this term if a food does not contain added color, artificial flavors or synthetic substances. But these are just ingredients -- the policy doesn’t address food production methods (use of pesticides, for example) or food processing and manufacturing methods (like thermal technologies, pasteurization and irradiation). Clearly, the term is used a lot, but what it means likely varies depending on who you ask.  

I’ve seen this first hand when talking with retailers and CPG brands about how to define “clean label.” It’s always a challenge for all parties to agree on the meaning. But whether it’s “natural” or “clean label,” the challenge facing brands and retailers is deciding just how transparent they want to be. At Label Insight, we call it the Transparency ROI Index -- the greater your commitment to transparency, the greater your return.  At its simplest, highly transparent organizations will be able to guide consumers to products that fit their interests and dietary needs, earning trust and loyalty along the way.

What’s this going to get me?

Today, with abundant amounts of product data and granular attribution technology, retailers can define food movements and help their shoppers find products to match. At Label Insight, we help retailers develop scientific definitions for terms that matter to their shoppers. It’s a lot of work, but the benefits are real:

Standardization: You create a standardized way of talking about something, making it easier for your stores and their employees to communicate with shoppers.

Differentiation: Stand out from your competition by creating definitions from scratch, or, when regulation does exist, use it as a starting point, then build on it to make it your own.

Credibility: Whether creating new definitions or building on existing ones, showcasing these efforts to shoppers will improve trust and loyalty.

The art and science of building definitions

I said this is hard work, so let me talk a little about Label Insight’s approach. (Which, luckily for our customers, makes the process more efficient and seamless.) We start by gathering all of your product data from your packaging images. We then deconstruct this information into millions of data points. From here, we’re able to reconstruct and group specific data points, giving you the building blocks needed to standardize a definition.

A simple example is caramel color -- a common ingredient in many conventional foods, but the jury is still out as to whether or not it's artificial or natural. Caramel color isn't part of the FDA's approved list of artificial colors, but there are instances where it is labeled as artificial. By deconstructing the product data, we're able to provide this level of analysis allowing you to formulate your own definition of what is or is not artificial.

4 attributes every retailer should define

Here are the top four attributes I’m most often talking to retailers about.

Ailment-Based Attributes: Food as medicine is becoming mainstream. Linking certain nutritive-based attributes to preventative health concerns is a way for retailers to educate shoppers on products that may be of interest. Specifically, we’re seeing an increase in ailment-based attributes focused on bone health, heart health, aging, blood pressure, CVD, kidney issues, gut or digestive health and even acne.

Natural v. Artificial: In an environment where “natural” or “clean label” have yet to be defined, retailers are looking to fill the demand for clean and natural foods, by using basic building block attributes that do have regulations and definitions associated with them. Attributes calling out products that are free of artificial preservatives, artificial flavors, artificial colors or even artificial sweeteners are most common. 

Retailers with more sophisticated data capabilities are going further by pledging to ban certain ingredients (Whole Foods, Kroger, Panera Bread etc) that many consumers already perceive as artificial.

GMO: Based on the volume of press and discussion on this topic, many consumers are seeking guidance from retailers. Often, retailers are determining if a product contains GMOs based on whether its packaging states it is non-GMO or not. But some retailers are going beyond the label by calling out “at risk” ingredients regardless of the whether the product includes an on-pack claim about GMOs.

Sustainability: Almost every retailer we work with has developed their own sustainability attribute. And for good reason: More than a third of consumers (37 percent) say they consider whether a product is produced using sustainable methods when making a purchase. Most often, these attributes focus on the environment and animal welfare. And, interestingly, the concept of sustainable farming practices is something that we’re seeing as the new “organic”.

Today, more than half (53 percent) of consumers grocery shop with a specific diet in mind, according to a recent survey conducted by Label Insight. For some, they see the grocery store as a puzzle, trying to piece together the foods they can and cannot eat. There’s a real opportunity for retailers to improve this experience by standardizing how they define the attributes that matter most to their shoppers. It sounds like a bit of a paradox: In order to differentiate yourself you must first standardize how you define something. But building a safe and sturdy set of standards upon which you build your definitions is the only way to ensure validity and credibility. To learn how Label Insight can help you accomplish this, schedule a demo today.

Topics: Company Viewpoint

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