CLEAN LABEL: INSTILLING CONSUMER CONFIDENCE IN GLOBAL...

CLEAN LABEL: INSTILLING CONSUMER CONFIDENCE IN GLOBAL FOOD AND BEVERAGES ALAN ROWNAN

FOOD MATTERS LIVE, LONDON 2016

© Euromonitor International

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CLEAN LABEL – GLOBAL PERSPECTIVE

CLEAN LABEL LEADS THE WAY TO RE-ESTABLISHING TRUST

WHAT DOES THE FUTURE HOLD FOR CLEAN LABEL?


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Introducing ethical labels DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

PEOPLE

Clean Label:

• All Natural • No Artificial Additives • No Artificial Colours • No Artificial Flavours • No Artificial Preservatives • No Artificial Sweeteners • No Monosodium Glutamate • GMO Free • BPA Free

Origin:

• Locally Sourced Prominent

Religious Labels:

• Halal • Kosher

Charity/Sponsorship

ENVIRONMENT/

SUSTAINABILITY

Sustainable Trade and Farming:

• Fairtrade • UTZ Certified • Other

Responsible Forestry:

• Rainforest Alliance • FSC • Other

Sustainable Palm Oil System

• RSPO/ISPO/MSPO • Other

Recycling Label:

• Widely recycled • Can be recycled • Terracycle • From Sustainable/Renewable Sources • Other

Carbon Footprint/No Air Miles Food

ANIMAL

WELFARE

Free Range

Marine Sustainability

Bird/Insects Friendly

Grass fed/pasture raised

Vegetarian/Vegan



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26 markets with the focus on developed countries, 26 thousand brands across packaged food, soft drinks and hot drinks

DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

Americas USA Canada Brazil Mexico

Middle East and Africa Israel UAE

Asia & Australasia • Australia • China • Hong Kong • Indonesia • Japan • Philippines • Singapore • South Korea • Taiwan

Europe Belgium Denmark Finland France Germany Italy Netherlands Poland Spain Sweden UK



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The global bastions of a clean label surge to US$165 billion DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

Clean label sales, World, 2015, US$ billion UK artificial colours concern

Chinese food scandals

US GMO labelling debate



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The U.S. leads global clean label, 3 times the size of the UK DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Nutrition, marketing, ethics or something else? What is clean label?


Clear Transparent Robust Relevant

Euromonitor Clean Label Types All Natural

No Artificial Additives

No Artificial Colours

No Artificial Preservatives

No Artificial Flavours

No Artificial Sweeteners

GMO Free

BPA Free

No Monosodium Glutamate



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No single origin of clean label DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

1960’s 1970’s 2007 2008 2015 Emergence of ‘Clean Label’

globally

Southampton Study (UK)

GMO labelling debate in USA

Key factors in the evolution of clean label

Consumer interest in clean label accelerated by advances in information technology. Clean label reformulation is not exclusively based on hard evidence, a debate about the inclusion of a specific ingredient may be more damaging than reformulating.

Fears over E-number safety Melamine Scandals in China

MSG linked to health effects Fears over aspartame

Horse meat scandal



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Manufacturers respond to consumer concerns DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Labelling reflects the commitments DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Which claim is most important from the consumer perspective? DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

No artificial colours, flavours

and preservatives

No artificial colours

or flavours Zero added preservatives

Add taste, nothing else

Nothing artificial,

no added refined sugar

No artificial preservatives, no added

MSG, free from artificial colours

Made with real fruit, no artificial colours,

preservatives or sweeteners

100% pure & raw Water, lime cucumber, BC

…and that’s it

No added sugar,

no additives

No artificial colours

or preservatives

100% natural

ingredients, skin & collagen

No artificial colours, flavours or preservatives

No added MSG

Vegetarian, vegan and coeliac friendly

Gluten and lactose free

Cold pressed (never heat)

100% natural ingredients – yes!

Say no to…

Added sugar

Added sweeteners

Added preservatives

Added water



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Are clean label claims becoming a norm on children’s labels? DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

FREE FROM artificial colours and preservatives

Source of Ca, essential proteins, vit D, fruit pure

100% naturally sourced ingredients,

Vit D & Ca for strong bones

100% naturally sourced ingredients,

Vit D & Ca for strong bones, no added preservatives

No added sugar or nasties,

proudly supports Brown Lee Foundation

Fruit and veg yoghurts bursting with goodness

A great natural source of calcium, source of vit D, naturally

sweetened with concentrated fruit juice

Freezable, great for lunchboxes, no artificial sweeteners,

no colourings, suitable for vegetarians, gluten free

Natural colours derived from fruit and vegetables,

no artificial flavours or preservatives

Raw fruit, crunchies & nut, 100% natural ingredients, no added sugar, wheat, dairy

& gluten free,

My ingredients: dates, soya protein crunchies (soya, tapioca starch, salt), cashews,

raisins, banana, apple juice concentrate






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The WORLD is CHANGING DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Response to the change with the movement towards SUSTAINABILITY and TRANSPARENCY on labels


PEOPLE

PLANET PROFIT Transparency Sustainability

Clean Label: After years of focus on margin opportunities, large companies have begun

to accelerate their efforts to reformulate the ingredients in their legacy products

to better align with consumer trends and reaccelerate sales growth.



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HEALTHY

• BFY: reduced sugar, salt, fat • FF • Free from lactose, gluten

NUTRITIOUS & NATURAL

• Protein • Energy • Fibre, • Good oils • Good carbs • Natural hydration

HUMAN SUSTAINABILITY

• Optimising health • Natural • Free from artificial ingredients,

GMOs, antibiotics, hormones

BACK TO BASICS:

• Authentic • Religious labels • Protected origin • Single origin

SUSTAINABILE FOR FARMERS & PLANET:

• Support of local production • Support of 3rd World farmers

and suppliers • Plant-based food, especially

protein • Organic • Palm oil

Respect to values and beliefs: Era of re-established trust DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

MALNUTRITION * OBESITY * ALLERGIES & IMMUNITY * INTOLERANCES * DIGESTIVE PROBLEMS * MUSCLE & JOINT PROBLEMS * ANTIBIOTIC RESISTANCE * MENTAL HEALTH * SAFETY SCANDALS *

MISTRUST IN FOOD QUALITY * LIFE STAGE NUTRITION



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Clean label a tool to re-establish trust DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

US$128b Packaged Food

US$34b Soft Drinks

US$3b Hot Drinks



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Consumer demand for clean label: World versus the U.S. DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Driving clean labels by key region DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

No Artificial Preservatives in W.

Europe

No Artificial Flavours popular across the

board

In Asia Pacific GMO is most prevalent



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Clean label extremely fragmented, an opportunity to establish or re-establish trust in brand’s identity




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Focus: Clean label crisps in the U.S. DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Focus: Clean label ready meals in the U.S. DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Clean label a new standard for dairy, juice and ready meals DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Packaging versus CSR commitments: Let’s not forget about sustainability, origin and religious concerns when sourcing clean label




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Is full disclosure as important as clean label? DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

OR






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…but it doesn’t stop there. Fears over safety linger around. Increase transparency and/or move towards natural. Advantage of the first mover


2015 2017 2020 and

beyond Future of ‘Clean

Label’

Southampton Study (Red and Yellow) GMO labelling debate in USA

Fears over E-number safety Melamine Scandals in China

MSG linked to health effects

Fears over aspartame Horse meat scandal

Artificial Enzymes

Fears over safety and health impact of hormones Antibiotics

No added sugar

HFCS

Lactose

Sodium

Fruit and veg – at least 1 serving Wholegrains

Milk from cows treated with rBST

Stevia and new ingredients

ALL NATURAL No added colours No added flavours

Future factors in the evolution of clean label

Others Number of countries ingredients come from



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Keeping up with the commitments. Don’t just “trim around the edges”, but think of the overall ingredient makeover


Mars to remove all colours from its human food portfolio

Mars Inc

Kraft/Heinz

Kraft/Heinz reformulating core brands



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Clean sourcing Product

composition and taste

Packaging Branding MEET ETHICAL

VALUE and ESTABLISHING

TRUST

Make clean label the foundation of product planning…but find the right balance, keep it simple, do not overwhelm consumers


CLEAN LABEL IMPACTS EACH STAGE OF PRODUCT STRATEGY.



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The future of clean label DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET


THANK YOU FOR LISTENING

Q&A

Alan Rownan Ethical Labels Analyst [email protected]


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Ethical labels methodology DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET



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Clean label defined by packaging claims DELIVERING ON THE CLEAN LABEL EXPECTATION - NAVIGATING THE CONSUMER MARKET

GMO free/Non-GMO: GMO (genetically modified) foods involve introducing foreign genetic material into an organism artificially, usually to – increase yield, increase resistance to disease, extend shelf life or improve food properties (texture, flavour, nutrient value). This category quantifies sales of products under our coverage with a GMO-Free/Non-GMO claim.

All Natural/100% Natural: These terms refer to the natural properties of the product. Both All Natural and 100% Natural are to be recognised as the same ethical label. This includes references to 'all natural anything'.

Artificial Additives: This category aggregates sales of products with a claim "no artificial additives” and “free from artificial additives“ on product packaging.

Artificial Flavourings: This category aggregates sales of products with a claim "no artificial flavours/flavourings” and “free from artificial flavours/flavourings” on product packaging.

Artificial Colours: This includes all products with a claim "no/free from artificial colours". Several artificial colours have been banned by food standards authorities after being linked to an increased number of cases of attention deficit hyperactivity disorder (ADHD) and are thus avoided by certain consumers.

Artificial Sweeteners: This category captures aggregated sales of all products with the claim "no/free from artificial sweeteners“ on product packaging.

Artificial Preservatives: This includes all products with a claim "no/free from artificial preservatives and products with a claim "no/free from parabens". Parabens are a form of artificial preservative and when present in food usually come in the form of E numbers.

BPA Free: All products with a claim referring to "BPA free". BPA (bisphenol A) is an industrial chemical that is used to make certain plastics and resins. BPA is often used in containers that store food and beverages, such as water bottles.

Lacking a formal definition, Passport: Ethical Label bases its definition in the various claims found on product packaging that stress a shift away from complex artificial ingredients, toward familiar, natural

alternatives.


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