The Changing Consumer and the Transparency Imperative. September 2016

Transcription

1 The Changing Consumer and the Transparency Imperative September 2016

2 Consumers are increasingly concerned about what goes into their food and where it comes from

3 Top drivers of demand for transparency ALLERGENS AND CROSS-CONTAMINATION USE OF PESTICIDES GMOs ANIMAL WELFARE SUSTAINABILITYAND RESPONSIBLE INGREDIENT SOURCING FARMERS AND FARM WORKERS FINANCIAL WELL-BEING

4 These trends are not limited to the coasts, but are mainstream 67% think it s important to understand how their food is produced 65% want to know more about where their food comes from 66% would like to see the food industry take more action in educating people on how food is produced Emerging Faith in Food Production, Sullivan Higdon Sink, March 2014

5 Food companies pay close attention to consumers perceptions and desires Top Ingredients AVOIDED Top Ingredients SOUGHT Reimagining Health and Wellness, Hartman Group, 2010

6 Food products are being reformulated in response to consumer demands Clean labels and shorter ingredient lists with simple, familiar ingredients are the new standard, coupled with a rise in nothing artificial and free-from claims. Major brands and food service providers have announced or pledged to remove artificial ingredients, colors, flavors and/or preservatives from their products, including Kellogg, General Mills, Nestle, Hershey, and Kraft as well as McDonalds, Panera Bread and Chipotle. In the US, 22% of food and drink product launches had a no additives or preservatives claim, a 31% increase since 2011 Ingredients & Additives Global Annual Review, Mintel, January 2016

7 Foods with free-from claims perceived to be healthier, more natural, less processed Trans fat-free Preservative-free Growth hormone-free GMO-free Sodium-free Nitrate/nitrite-free Cage-free/Free range Lactose-free Allergen-free Free-From Foods Trends US, Mintel, May 2015

8 Consumers primarily hold food companies responsible for transparency Food Companies Farmers GroceryStores Restaurants Impact of Impact food of Food on onhealth Health Food safety Safety Environmental impact Impact Labor Labor & human & Human Rights rights Animal Animal well-being Well-Being Business Ethics Respondentsallocated 10 0 points acrossthe groups responsible for providing information in each transparency topic. The numbers shown are the average number of points allocated to each group, acrossall respondents. Center for Food Integrity, Consumer Trust Research, 2015

9 A big is bad bias among consumers is creating trust issues Likely to Put Their Interests Ahead of Consumers Interests Large Food Companies 57% Large Commercial Farms 47% Small Food Companies 29% Family Farms 27% Center for Food Integrity, Consumer Trust Research, 2015

10 The agriculture industry would benefit by being more transparent Emerging Faith in Food Production, Sullivan Higdon Sink, March 2014

11 Likewise, food companies need to focus on transparency Emerging Faith in Food Production, Sullivan Higdon Sink, March 2014

12 Packaging is the most common way to deliver transparency information, but it has significant limitations SIZE LIMITATIONS EXPENSIVE AND TIME CONSUMINGTO CHANGE LABELS ARE ALREADY CROWDED, DIFFICULT TO READ AND CONFUSING

13 Hershey began transparency work in late 2013

14 We launched an internal effort to develop a better transparency tool in 2014 PROJECT LOOKING GLASS Lead/catalyze the development of an aligned industry solution for product transparency, leveraging mobile and web technology

15 We started by exploring with consumers PACKAGING IS CONFUSING AND HARD TO READ Normally wheni look at apackage,the first thing I jump to is always the nutrition label, but allergen information isn t always easy to find. SHAYLA CONSUMERS WANT FULL DISCLOSURE THE GOOD AND THE BAD I want more. They arejust putting forward the good stuff. I want to know the bad stuff too. KAT CURRENT MOBILE APPS ARE DISAPPOINTING Anyonecanwrite an app if they want to. To citewhere this information is coming from would bolster my confidence. AMANDA

16 Consumers have clear opinions on what they want to know % consumer saying they must know the information CURRENT REQUIREMENT NEW INFORMATION

17 We began developing, evolving and consumer-testing prototypes

18 Final prototype shared with the Grocery Manufacturers Association (GMA) in 2014

19 A cross-company consortium under the GMA and FMI designed the program in people from 90 organizations 1WorldSync Cargill General Mills IFRA Nestle RQA Tate&Lyle Abbott Clorox FONA JM Smucker Ocean Spray SCI Topco Accenture Coca-Cola Georgia Pacific Kellogg P&G Seventh Generation TraceOne ACI Colgate-Palmolive Givaudan Kraft PCPC ShopWell TROY Group Action Company ConAgra Gravity Tank Kroger Pepsi Co SNET Tyson Foods Ahold CSPA GMA Kiwikee Pharmavite Stibo Underwriter Labs Amazon.com Deloitte GS1 Land O Lakes Phoenix Brands Sun Products Unilever Amway Corporation DuPont Harris Teeter L Oreal Post Foods Sunny Delight Bev. Wakefern Arylessence ES3 Hershey Mars Reckitt-Benckiser Sustainability Cons. Walgreens Big Heart Pet Brands FCPC Hormel McCormick Reily Foods Symbology Walmart Bimbo Bakeries Ferrero House-Autry Meijer Revlon Syngenta WhiteWave Bumble Bee Foods Firmenich Idahoan Mondelez RILA Target Wrigley Campbell s FMI IFF Monsanto

20 SmartLabel was announced in December

21 Consumers get to a web landing page by scanning a QR code on the package

22 Consumers can also use search and/or links on company/brand sites to reach the landing pages

23 There is also a product search tool on

24 Five tabs deliver a full suite of information Food attributes: 52 required, 189 voluntary Non-Food attributes: 51 required, 57 voluntary Nutrition Ingredients Allergens Other Info Company/Brand

25 The SmartLabel program ensures consistency and accuracy of data Data directly from brand owners hosted on their own web sites; updated immediately with any changes SmartLabel information subject to the same regulatory oversight as on-pack labels Strict governance rules for participating companies to provide consistent user experience No marketing, advertising or pop-ups allowed

26 Dozens of CPG companies and retailers committed to participating

27 Eleven companies are live now, over 2,000 items; 34,000 predicted by the end of 2017

28 How NASDA and the agriculture industry can help First, a BIG thank you to NASDA and the leaders in this room for your support on federal GMO labeling your voices were crucial to the success of the effort Your leadership is critical and our industry needs your leadership now more than ever! How can you help? 1 Encourage farmers in your states to engage with consumers, and explain the benefits of their biotech investments on the environment, efficient food production, and crop yields 2 Emphasize to state lawmakers that a national food supply chain requires federal (not state) solutions on labeling and transparency issues 3 Help explain the benefits of digital solutions like SmartLabel

29 Thank you!