Clean Labeling Brand Square Presentation

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Clean Labeling: Focusing on What Consumers Want

Jim Lucas Evanston Consul9ng Group

May 21, 2015

Desire for Clean Labeling

•  Consumers today are drawn to brands/products that equip them to live healthier, fuller, longer lives.

•  Product recalls, allergy scares and harmful added ingredients in many of the products on today’s store shelves are a serious concern to consumers of all demographic stripes.

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Concerned, but Confused Most consumers feel packaging nutriBonal informaBon is important –  38% of consumers trust what companies say on labels – More than 1/3rd (37%) are confused by claims on their food packaging

– More than 70% of BFG’s survey respondents said that they agreed some food labels were meaningless, but 37% said they sBll "trusted" the label’s intent.

Sources: Mintel, “Clean Labeling is the New Natural,” 2015; Fast Company Exist, “Americans will Pay more for Organic, But also have No Idea What Organic Means”. h\p://www.fastcoexist.com/3038415/americans-‐will-‐pay-‐more-‐for-‐organic-‐but-‐they-‐also-‐have-‐no-‐idea-‐what-‐organic-‐means#6 : BFG survey conducted September, 2015, n = 300.

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Truth Smuggled

•  Much of the challenge around product labeling can be thought of as “truth smuggling”—both trying to communicate and trying to extract understanding.

•  Or at least telling truth at a slant (Emily Dickenson)

•  Consumers are concerned, but confused.

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Organic Food: Not So Simple

•  69% buy organic meat, poultry, dairy and/or fruits and vegetables, but

•  20% correctly defined how the USDA defines “organic”; (16% knew that organic has no chemicals, addiBves or GMOs)

•  75% agree that organic has simply become a marke9ng tool

•  53% don’t trust that a product labeled organic is actually organic

Sources: Fast Company Exist, “Americans will Pay more for Organic, But also have No Idea What Organic Means”. h\p://www.fastcoexist.com/3038415/americans-‐will-‐pay-‐more-‐for-‐organic-‐but-‐they-‐also-‐have-‐no-‐idea-‐what-‐organic-‐means#6 : BFG survey conducted September, 2015, n = 300.

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Unnaturally Confusing

•  41% believe natural is be\er for you •  37% believe natural is not be\er for you •  63% agree that “natural” is a markeBng term

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GMOs

•  59% are concerned about GMO food products •  32% know how to define a GMO food •  21% did not know what GMO is

Image: h\p://www.inlander.com/Bloglander/archives/2013/09/27/syringes-‐gas-‐masks-‐and-‐frankenfood-‐visuals-‐of-‐the-‐gmo-‐debate

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Clean Labeling

•  31% believe it means lower sugar content •  13% believe it’s sugar free

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Sources: Fast Company Exist, “Americans will Pay more for Organic, But also have No Idea What Organic Means”. h\p://www.fastcoexist.com/3038415/americans-‐will-‐pay-‐more-‐for-‐organic-‐but-‐they-‐also-‐have-‐no-‐idea-‐what-‐organic-‐means#6 : BFG survey conducted September, 2015, n = 300. Image: h\p://mealsandmovesblog.com/2011/04/26/no-‐sugar-‐added/

Clean Labeling

Sweetness in SoS Drinks

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The Rise of Clean Labels

•  When it comes to food purchases and nutriBon labels, consumers want it one way: Clean.

•  22% of U.S. grocery consumers would like to see improved labeling on packaging to help them easily idenBfy more healthful food products, and less than 38% trust what companies say on labels, according to the global consumer trends for 2015 from internaBonal market research firm Mintel.

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Enter Clean Labeling

•  The clean labeling concept has gained tracBon in recent years, as consumers’ need for be\er transparency has grown and is unlikely to fade, given the FDA’s upcoming nutriBon label regulaBon.

•  Unlike the terms “organic or natural,” there is no legal definiBon for the term “clean label.”

•  It has largely been determined by consumers. •  It refers to consumers’ desire for straighhorward food labeling that lists exactly what ingredients are and are not in the product, as well as a clear, complete and accurate depicBon of the product these people are considering purchasing.

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Clean Labeling: Truth-‐based Rela9onships

•  And how might clean labels on packaging help build deeper, trust-‐based relaBonships with consumers? – A clean label gives consumers a clear, complete, and accurate depicBon of the product they are considering purchasing.

–  It can incorporate several consumer-‐friendly themes, but there are key components that we’ve seen successfully applied across product lines in the food and beverage category by brands and retailers.

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Accessibility

•  Consumers are trying to figure out what they are eaBng, but brands and retailers have not provided them with informaBon that is easy to understand nor readily accessible.

•  Therefore, a clean label should be easy to find and read, and should not require the use of addiBonal resources to decipher its contents. –  Wegmans Food Markets parBcipates in the

Facts Up Front iniBaBve and presents key data points such as calories, saturated fat, sodium and sugar on the front of packaging for store brand products in a large, easy-‐to-‐read format.

•  A host of other well-‐known companies have also implemented Facts Up Front on their products.

h\p://www.factsupfront.org/

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30-‐35% of food & beverage

product pageviews are being accessed from mobile devices.

Bazaarvoice, The info-‐hungry consumer, 2015

Clean Labeling

Transparency

•  Transparency puts your relaBonship with your shoppers and consumers first and “owning” it, for be\er or for worse. Transparency is an opportunity. –  An opportunity to do something refreshing and different-‐-‐

providing shoppers and consumers with the informaBon that they need.

–  If your product includes an ingredient that is not quite good for you such as added sugar, include that on your packaging and explain why it’s there. If you can do this right, you will gain consumers’ trust and ground on your compeBBon.

–  It’s not just about compliance, but about finding opportuniBes to pay it forward, not because you’re mandated to, but because it is what’s best for the consumer.

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Simplicity

•  Consumers crave simplicity. They are inclined to purchase products that contain 100 percent natural, tradiBonal and familiar ingredients.

•  Marketers can expect consumers to buy based on not just what isn’t in a product, but also what is in a product. In this regard, Naked Juice got it right with labels that include straighhorward messaging such as “Green Machine” or Siggi’s simple ingredient list.

•  The use of familiar, tradiBonal ingredients appeal to consumers’ need for simplicity in the food products they purchase

h\p://www.drinkwhat.com/naked-‐green-‐machine-‐all-‐natural-‐juice-‐smoothie/;

h\p://bri\neyg.typepad.com/sparkwood_21/2012/02/big-‐big-‐fan-‐siggis-‐skyr-‐icelandic-‐style-‐yogurt.html

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Fewer Villainous Ingredients

•  Consumers want foods that are simple, natural, organic – the fewer harmful, “villainous ingredients” in products the be\er. Some retailers have taken a leading role in this area, especially with their refrigerated and frozen foods. –  An example is the Simple Truth and Simple

Truth Organic “Free from 101” statement from The Kroger Co., CincinnaB. All products marked with the “Free from 101” label are literally free from 101 ingredients that customers told Kroger they don’t want in their food.

–  Similarly, Whole Foods Markets has a list of 78 ingredients that are unacceptable for food products.

h\p://www.simpletruth.com/

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h\p://www.wholefoodsmarket.com/about-‐our-‐products/quality-‐standards/food-‐ingredient

Clean Labeling: Some Final Thoughts

•  Clean labeling is an opportunity. So start the conversaBon now! •  As companies experiment with new and engaging ways to

incorporate “clean labeling” into their markeBng mix on, it’s evident that there is no one-‐size-‐fits-‐all soluBon. –  Provide fundamental product informaBon across touchpoints—

packaging, product websites, social media, etc. –  Provide product informaBon in an easily digesBble format –  Accessible, transparent, simple and fewer villainous ingredients –  Use CGC to understand consumer percepBons of a brand/product –  Supplement standard informaBon with authenBc CGC

•  Brand/product doesn’t have to be perfect to make a lasBng impact on shoppers and consumers.

•  Make it clear to consumers that you have their best interests at heart and are using this opportunity to reconcile and refocus on a more meaningful relaBonship with them.

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Thank you!

Ques9ons

Jim Lucas Evanston ConsulBng Group

847-‐691-‐8155 [email protected]

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Clean Labeling arBcle in Store Brands can be found at: h\p://www.storebrands.info/clean-‐labeling-‐focus-‐what-‐consumers-‐really-‐want

Clean Labeling

Marketing

Clean Labeling Brand Square Presentation