In recent years, health and wellness have become one of the biggest drivers of trends in the food and beverage sector. Preventative health is a huge area enabled by rising disposable incomes and greater nutritional awareness, where people are taking action to live healthily instead of waiting to do so after illness has befallen them.
Diet is a large component of this movement and it is common to see consumers rely on nutritional labels — health claims, ingredient lists and nutrition panels among others — to help them discern the ‘good’ from the ‘bad’. In fact, several studies in Europe have shown that labelling does have a potential impact on improving public health, such as reducing obesity rates.
But while there are people who regularly rely on such labels to help them with their decisions, there are also those who ignore it entirely out of confusion or skepticism. How much do consumers rely on labels and what does it mean for manufacturers?
The Savvy Consumer
Bruce Stockwell, Virginia Beach, US
Manufacturers and retailers should know by now that consumers are a varied bunch with different needs and wants that can range with age, geographical location and gender among others. Likewise, there are three types of consumer reactions to nutritional labels: reliance, scepticism and confusion.
The consumers who rely on nutritional labels to make their purchasing decisions are health-oriented and tend to be parents, people on diets, first-time buyers of a particular product, or brand hoppers. According to the International Food Information Council (IFIC) Foundation, these are the people who are using labels such as the Nutrition Facts Panel (NFP) in various aspects.
For instance, parents who want only the best for their children and individuals who are watching their calories would use the NFP to compare products in the store and perhaps determine which has the best daily value (DV) of vitamins and nutrients, or to see which one holds less fat and calories. When at home, the NFP is used to check and verify serving sizes, or to help people manage serving sizes and intake.
First-time buyers unfamiliar with a new product would also turn to the NFP to get a better sense of what the product contains and how it might taste. They might also be comparing it to see if it matches up to their preferences.
This too, is especially true for consumers who are less sensitive to brand and prefer to focus on the benefits of the product. Such individuals tend to assess the merits of an item by using the information found on an NFP, especially when comparing between products that have similar price points or front-of-pack claims.
These consumers require labels that are informative with all the relevant details as well as product details that provide a clear benefit so as to help them make the right decision.
Then there are the skeptics — consumers who believe that nutritional claims are but a marketing ploy. According to the Nielsen Global Survey of Food Labeling Trends in 2011, more than two thirds of global respondents believe that such claims are either never or only sometimes trustworthy.
Things are slightly better when it comes to more definitive claims such as raw nutrition facts like those found on an NFP. The study found that calorie counts were the most trusted, where one third of the respondents believed calorie claims to be always accurate, and 58 percent found them sometimes accurate. Vitamin and fat content followed as the next most trustworthy claims respectively.
In contrast, almost 80 percent of respondents have never or only sometimes considered the more ambiguous claims (eg: “heart-healthy”, “natural” and “low fat”) as believable. “Consumers have difficulty trusting more ambiguous attributes compared to the concrete ingredient-based information,” said James Russo, SVP of Global Consumer Insights at Nielsen. To him, this serves as an opportunity for more education.
Nonetheless, it might also be too much exposure to information that might be causing scepticism, which is an increasingly prevalent trait among the younger crowd. According to an analysis by Amanda Topper and Katrina Fajardo from Mintel, 59 percent of consumers aged 18-24 (otherwise known as young millenials) are skeptical about health related claims despite actively looking for clean product labels.
Armed with a treasure trove of information that can be accessed instantly on their smart devices, young millennials have developed an awareness that is much keener than their older counterparts. According to the analysts, young millenials are seeking products with added health benefits, such as omega-3s, protein and free-from or reduced claims (eg: low sodium, sugar free). When compared to the older generation, they are also more likely to look for snacks that are gluten-free, natural and organic.
But at the same time, being privy to the internet has given young millenials access to all types of information, including examples of malpractices in manufacturing. They too have grown up being inundated by marketing messages, and are part of an ever-growing group of savvy consumers who tend to be critical and more than capable of separating fluff from stuff.
Only by providing evidence and accountability can manufacturers gain the trust of this group.
Despite their differences, the two categories of consumers mentioned earlier are united in the fact that they understand labels. It was only a matter of whether they believed it or not. In the third and largest group however, consumers generally ignore nutritional labels out of confusion.
According to the Nielsen survey, 59 percent of global respondents have difficulty understanding nutritional labels on food packaging even though they have healthy eating on their minds. Consumers in the US showed the most confidence in understanding labels (59 percent), followed by Canada (49 percent), but falls dramatically when it comes to Asia Pacific (31 percent).
The reason for this drop could be due to language differences, where it was found that comprehension was highest in countries such as Australia, New Zealand and India where English is a commonly spoken language. In contrast, food label confusion was the highest in Chinese speaking countries as well as other parts of Southeast Asia where indigenous languages are predominant.
At other times, confusion may arise because consumers have not been adequately educated in reading labels, or because producers are bombarding consumers with too much information. The Mintel report revealed that nearly half of young millenials (49 percent) are confused by the number of food claims on packaging.
Through these examples, it is clear that an indifference to labels can be cultivated by a variety of reasons. Nonetheless, the solution to combat this problem is the same. By providing simplified, clear, concise and easy-to-understand nutritional labels, producers can eradicate confusion and reach out to a bigger crowd at the same time.
The Benefits of Labelling
Daniel Oines, US
When it comes down to it, how important are nutritional labels for winning customers over? Plenty, if you agree with Emerald Gao, Asia Pacific product marketing manager at Tate & Lyle, who believes that food labels are a useful communication tool.
“Objective and accurate food labelling help manufacturers build up trust in the brand and consumers can better understand what they are eating or drinking,” she said. Food labels done right are a win-win situation for both producers and consumers.
Doubling up as a source of information and a marketing tool, nutritional labels can be the differentiator between your brand and a competitor’s. More importantly, it helps to build trust with consumers.
“As long as the health claim is trustworthy and understandable, it can help with building trust between the two parties (producers and consumers),” said Ms Gao. With this in place, claims are bound to have an impact on purchasing behaviour as consumers are invested in nutrition enhancement and balanced dietary habits.
For instance, she shared that high fibre claims are popular as people worldwide are consuming less fibre than recommended by the World Health Organization (WHO). There are also more Asian consumers, a demographic generally associated with high sodium intake, who are becoming well educated on the burdens that come with a high sodium diet.
However, keeping in mind that claims only work when they can overcome the scepticism and confusion faced by consumers, what exactly can producers do? By making sure that their claims are easy to understand, trustworthy, with some form of quantification that tells consumers how much of their daily recommended intake they are fulfilling, said Ms Gao.
Making A Compelling Case
To eradicate confusion and distrust, nutritional labels should be easy to understand. Similar to the rationale behind the clean label movement, consumers are seeking natural and familiar ingredients that they understand instead of foreign, chemical-sounding names that are most likely a product of the lab.
Emphasising how crucial this is, Ms Gao feels that labels need to be understandable before they can be trusted. People want to know what they are ingesting and whether it is harmful to them, and they can only achieve this when they actually understand the ingredient list.
In the meantime, trust is earned when claims are made in a responsible and accountable manner. This requires transparency and evidence, such as claims that can be quantified rather than generic, ambiguous sounding ones. For instance, instead of saying that a particular ingredient is beneficial to certain conditions, it would be better if manufacturers could highlight how much of a benefit that ingredient would bring (eg: ‘High in fibre’ versus ‘Provides 50% of fibre required daily’).
To prevent this, manufacturers should ensure that the claims they make are effective and evidence-based. The promise of the product must be delivered and at the same time, brands must be transparent about how they came to this conclusion. This is where scientific inquiry comes into play. Studies and trials, if valid, should be reflected when possible.
One of the reasons behind the scepticism displayed by consumers is because they have been at the receiving end of too many gimmicks or marketing messages that do not match up. A poll commissioned by Greenfields milk that measured Singaporeans’ buying habits found that 58 percent ignored packaging information and 52 percent were unsure of how to verify or validate packaging information before their purchases. This was mostly because manufacturers failed to provide adequate or accurate information.
This is particularly so in Singapore where slick advertising is a norm, to the effect that 77 percent of those polled stated that they were mostly influenced by promotional marketing and advertising materials before purchasing groceries. Providing further support for the need to verify your claims, 27 percent out of this particular segment have said that they were frequently dissatisfied with their purchases as they fell short on their promises. This hurts brand reputation and turns customers away forever.
In an age where false or exaggerated claims can be easily debunked, transparency can go a long way. Food labels are a perfect opportunity for manufacturers to display accountability and show consumers that they can be trusted. Despite there being confusion and strong scepticism, it is highly likely that labelling will remain a strong consumer influence as healthy living becomes the new status quo. To catch up with the future, manufacturers have to act now by creating compelling claims that are fact-based and easily understandable.