CLEAN LABEL: INSTILLING CONSUMER CONFIDENCE IN GLOBAL FOOD AND BEVERAGES ALAN ROWNAN FOOD MATTERS LIVE, LONDON 2016
ABOUT EUROMONITOR INTERNATIONAL About Euromonitor International 2 Euromonitor International is a global market research company providing strategic intelligence on industries, companies, economies and consumers around the world. A trusted business intelligence source Helping clients make informed decisions Subscription services and custom research 800+ analysts in countries worldwide Region and industry specialists
CLEAN LABEL GLOBAL PERSPECTIVE CLEAN LABEL LEADS THE WAY TO RE-ESTABLISHING TRUST WHAT DOES THE FUTURE HOLD FOR CLEAN LABEL?
Introducing ethical labels 4 PEOPLE ENVIRONMENT/ SUSTAINABILITY ANIMAL WELFARE 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 Halal Kosher Religious Labels: Charity/Sponsorship 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 Free Range Marine Sustainability Bird/Insects Friendly Grass fed/pasture raised Vegetarian/Vegan Carbon Footprint/No Air Miles Food
26 markets with the focus on developed countries, 26 thousand brands across packaged food, soft drinks and hot drinks 5 Americas USA Canada Brazil Mexico Middle East and Africa Israel UAE Europe Belgium Denmark Finland France Germany Italy Netherlands Poland Spain Sweden UK Asia & Australasia Australia China Hong Kong Indonesia Japan Philippines Singapore South Korea Taiwan
The global bastions of a clean label surge to US$165 billion 6 Clean label sales, World, 2015, US$ billion UK artificial colours concern Chinese food scandals US GMO labelling debate
The U.S. leads global clean label, 3 times the size of the UK 7
Nutrition, marketing, ethics or something else? What is clean label? 8 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 Transparent Robust Clear Relevant
No single origin of clean label Key factors in the evolution of clean label 9 Fears over E-number safety Melamine Scandals in China GMO labelling debate in USA Horse meat scandal MSG linked to health effects Southampton Study (UK) Fears over aspartame 1960 s 1970 s 2007 2008 2015 Emergence of Clean Label globally 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.
Manufacturers respond to consumer concerns 10
Labelling reflects the commitments 11
Which claim is most important from the consumer perspective? 12 No artificial colours, flavours and preservatives No artificial colours or flavours Zero added preservatives Made with real fruit, no artificial colours, preservatives or sweeteners No added sugar, no additives Nothing artificial, no added refined sugar No artificial preservatives, no added MSG, free from artificial colours 100% pure & raw Water, lime cucumber, BC and that s it No artificial colours or preservatives Add taste, nothing else No artificial colours, flavours or preservatives No added MSG Vegetarian, vegan and coeliac friendly Gluten and lactose free 100% natural ingredients, skin & collagen Cold pressed (never heat) 100% natural ingredients yes! Say no to Added sugar Added sweeteners Added preservatives Added water
Are clean label claims becoming a norm on children s labels? 13 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 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 Natural colours derived from fruit and vegetables, no artificial flavours or preservatives
CLEAN LABEL GLOBAL PERSPECTIVE CLEAN LABEL LEADS THE WAY TO RE-ESTABLISHING TRUST WHAT DOES THE FUTURE HOLD FOR CLEAN LABEL?
The WORLD is CHANGING 15
Response to the change with the movement towards SUSTAINABILITY and TRANSPARENCY on labels 16 PEOPLE Transparency PROFIT PLANET 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.
Respect to values and beliefs: Era of re-established trust 17 SUSTAINABILE FOR FARMERS & PLANET: 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 Support of local production Support of 3rd World farmers and suppliers Plant-based food, especially protein Organic Palm oil MALNUTRITION * OBESITY * ALLERGIES & IMMUNITY * INTOLERANCES * DIGESTIVE PROBLEMS * MUSCLE & JOINT PROBLEMS * ANTIBIOTIC RESISTANCE * MENTAL HEALTH * SAFETY SCANDALS * MISTRUST IN FOOD QUALITY * LIFE STAGE NUTRITION
Clean label a tool to re-establish trust 18 US$128b Packaged Food US$34b Soft Drinks US$3b Hot Drinks
Consumer demand for clean label: World versus the U.S. 19
Driving clean labels by key region 20 No Artificial Preservatives in W. Europe No Artificial Flavours popular across the board In Asia Pacific GMO is most prevalent
Clean label extremely fragmented, an opportunity to establish or re-establish trust in brand s identity 21
Focus: Clean label crisps in the U.S. 23
Focus: Clean label ready meals in the U.S. 24
Clean label a new standard for dairy, juice and ready meals 25
Packaging versus CSR commitments: Let s not forget about sustainability, origin and religious concerns when sourcing clean label 26
Is full disclosure as important as clean label? 27 OR
CLEAN LABEL GLOBAL PERSPECTIVE CLEAN LABEL LEADS THE WAY TO RE-ESTABLISHING TRUST WHAT DOES THE FUTURE HOLD FOR CLEAN LABEL?
but it doesn t stop there. Fears over safety linger around. Increase transparency and/or move towards natural. Advantage of the first mover Future factors in the evolution of clean label 29 Fears over E-number safety Fears over aspartame Melamine Scandals in China Horse meat scandal Sodium MSG linked to health effects GMO labelling debate in USA Southampton Study (Red and Yellow) Lactose 2015 2017 2020 and beyond Future of Clean Label Fears over safety and health impact of hormones Milk from cows treated with rbst Antibiotics HFCS Artificial Enzymes Stevia and new ingredients Number of countries ingredients come from Others No added flavours No added colours No added sugar ALL NATURAL Wholegrains Fruit and veg at least 1 serving
Keeping up with the commitments. Don t just trim around the edges, but think of the overall ingredient makeover 30 Mars to remove all colours from its human food portfolio Mars Inc Kraft/Heinz reformulating core brands Kraft/Heinz
Make clean label the foundation of product planning but find the right balance, keep it simple, do not overwhelm consumers 31 Clean sourcing Product composition and taste Packaging Branding MEET ETHICAL VALUE and ESTABLISHING TRUST CLEAN LABEL IMPACTS EACH STAGE OF PRODUCT STRATEGY.
The future of clean label 32
THANK YOU FOR LISTENING Q&A Alan Rownan Ethical Labels Analyst Alan.rownan@euromonitor.com
Ethical labels methodology 34
Clean label defined by packaging claims 35 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. 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.