Industry Insider: Food Labeling Transparency — How the Market is Changing

The food manufacturing industry is under intense pressure to provide more complete and accurate product information — not only to meet a growing demand for comprehensive transparency — but to support consumers in their quest for healthier choices, while addressing challenges in managing an ever more complex, farm-to-table supply chain.

In addition, the Food and Drug Administration (FDA) is updating labeling regulations to better align the definition of nutrition with the latest science and dietary guidance. This is combined with consumers’ increasing need for more information on caloric content, the acknowledgement of GMOs, presence of allergens, added sugars, and other modified ingredients, all of which they are growing more aware of and concerned about. Can industry initiatives like the SmartLabel program be the answer food manufacturers and consumers are looking to for help?

FDA Modernizes Nutrition Facts Labels

The FDA recently announced mandatory changes to the format and content of Nutrition Facts Labels required for all packaged foods regulated by the agency. The new regulations redefine the relationship between food and human health.

Dietary fat was the focus when the labels were created while calories are of greater concern these days. A product’s calorie listing will now be much larger than anything else on the Nutrition Facts Label, making it hard to overlook according to the FDA. Overall, the changes required are numerous, often involving packaging re-design, product reformulation, content changes to labels, increases in recordkeeping, and new ongoing analytic requirements.

Why the Shift? The Facts Have Changed

Chronic diseases and conditions — such as heart disease, stroke, cancer, diabetes, obesity, and arthritis — are among the most common, costly, and preventable of all health problems. The following chart lists the shift in the top 10 causes of death in the US.

 

The Shift in the 10 Top Causes of Death in the US
Rank	1900	2000	2015
1	Tuberculosis	Heart Diseases	Heart Disease
2	Pneumonia	Cancer	Cancer
3	Diarrheal diseases	Stroke	Lung diseases
4	Heart disease	Lung disease	Accidents
5	Liver disease	Accidents	Stroke
6	Injuries	Pneumonia and Influenza	Alzheimer’s
7	Stroke	Diabetes	Diabetes
8	Cancer	Suicide	Pneumonia and influenza
9	Bronchitis	Kidney Diseases	Kidney Diseases
10	Diphtheria	Liver disease and cirrhosis	Suicide

 

In recent years we have also seen a significant rise in reported food allergies combined with consumers’ interest in product nutrition information. As such, shoppers are demanding greater transparency from brands in order to make more informed decisions about the products they use and consume.

The Omni-Information Era

Today, the Internet allows shoppers to talk with the companies that serve them and, ever more importantly, allows these same shoppers to talk among each other. In addition, much of what was generally understood about and crafted for consumers is now readily supplemented through Internet-based communication. This provides greater awareness about what’s actually in our food, venues for post-purchase opinion sharing between the parties, as well as a wide range of available choices more easily procured inside a point-and-click, 24/7 store-to-door delivery model.

The old-legacy media model of one-way communication has given way to a multi-directional one – brand to consumer, consumer to brand, consumer to consumer. With the consumer gaining a significant degree of control over the sharing process, the Internet has, in effect, become the mass media vehicle for consumer-directed communications and information influence.

Responding to this, food manufacturers are turning to database systems that have the ability and capacity to consistently and accurately process billions of information objects. With consumer communication now global and always data informed, the principal challenges will be in managing and leveraging data sets that are continuously growing while implementing new technologies, including for machine learning, evolving mobile devices and the customer specific and directed information being shared on them.

All that said, now that the public has entered the Omni-information era we need to ask if there are there other innovative and informational digital strategies worth exploring and developing in addition to the standard nutrition facts labels on product packages.

The SmartLabel Initiative — A Time That’s Come

One effort, led by the Grocery Manufacturers Association (GMA) and the Food Marketing Institute (FMI), is the SmartLabel. This association sponsored and industry supported initiative is committed to building trust with consumers by providing comprehensive product information in an easy, standardized and accessible digital format. Participating manufacturers will be making available dozens of product attributes which consumers can readily visualize by simply scanning the product’s bar code with their mobile devices, or entering the code on connected desktop computers. The Grocery Manufacturers Association estimates that SmartLabel codes will eventually be available on nearly 30,000 products, including not just in the food and beverage categories, but also for health and beauty care and household products by the end of 2017.

In an age where everything that can be known, will be known, consumers want to know where their food is from, what is in their food, and even how their food will impact their health and wellbeing in the near term and over a lifetime. In fact, according to a report by BBMG, GlobeScan and SustainAbility, more than eight in ten (82 percent) of global consumers are already saying that “ingredient transparency is a very important or important factor” when shopping for food and beverage products.

Today’s connected consumers are personally experiencing, and now demanding, transparency, before giving trust. For a brand or a business, trust from these customers will increasingly become not just an important marketing edict, but a critical business requirement.

About the author

Michael Forhez is Global Vice President for the Consumer Markets at 1WorldSync, bringing over 20 years of diversified experience in sales, marketing and management consulting. 1WorldSync is the leading multi-enterprise product information network, helping more than 20,000 global brands and their trading partners in 60 countries – share authentic, trusted content in the hands of their customers and consumers, empowering them to make the right choices, purchases or health and lifestyle decisions.1WorldSync helps foodservice manufacturers, brokers, distributors and operators tackle customer requirements and government regulations for menu labeling and other nutritional standards.