Trust is the new currency of brand loyalty, and the path to trust is transparency.
That comes from Kira Karapetian, marketing vice president of Label Insight, but it nicely sums up the connections among transparency, trust and success in today's food and beverage industry.
Transparency is critical if food and beverage companies want consumers to trust their products. But what, today, is transparency? The definition is evolving and can be different for almost every consumer.
For many, it means simpler, less processed ingredients -- and certainly not genetically engineered ones, antibiotics, synthetic colors, sweeteners or flavors, nor "questionable" ingredients such as high-fructose corn syrup or brominated vegetable oil. Maybe organic or "free-from" is synonymous. Others want to know where their food comes from and if the producing company is committed to sustainability, humane treatment of animals or charitable causes.
"We’re in the midst of a shift in the marketplace where the culture and conversation around conventional food, particularly online, is changing as consumers navigate which foods to adopt, moderate or abandon," says Charlie Arnot, CEO of the Center for Food Integrity (www.foodintegrity.org), Gladstone, Mo. "The consumer trust model shows communicating with values is three to five times more important to earning trust than simply communicating facts and science."
Food companies are acknowledging that consumers want to know "what's under the hood." As a result, more and more brands are providing information about their ingredients, supply chains and nutritional content, some of that on labels and some of it online.
Having a transparency strategy and conveying transparency on packaging is important. CPG manufacturers wishing to make the biggest impact with new launches should invest in products with label transparency … and a personal touch, says IRI Worldwide (www.iriworldwide.com), Chicago. The top-selling "new" brand on IRI's New Product Pacesetters list is Dean Foods' DairyPure brand of milk, which incorporates the brand's five-point "purity promise." Dean promises "no artificial growth hormones, all milk tested for antibiotics, quality-tested to ensure purity, from cows fed a healthy diet and cold-shipped fresh from your local dairy" − all of which resonate with consumers.
"Simpler ingredients, including natural, organic and non-GMO, are quite sought-after in grocery aisles today," says Susan Viamari, IRI's vice president of thought leadership. Messaging must be clear and concise and even singular to be transparent and simple, the Pacesetters study notes.
Consumers are also highly focused on food safety, not only making their concerns widely known on social media, but editing their shopping lists based on those concerns, notes IRI's senior vice president Chris DuBois. "That’s why the food transparency trend is growing, and price gaps between organic and conventional food are decreasing. Organic, 'no antibiotics ever' (NAE) meat claims and traceability will become more standard. Over the next few years, I think it’s safe to expect there will be much more growth in organic food, more meat claims such as NAE and gestation crate-free pork, as well as higher consumer demand for traceability. Local supply programs will get more sophisticated as well, as consumers continue their focus on health and wellness."
DuBois points out two components to food transparency: primary product claims such as "organic" and "antibiotic-free," and grower information such as non-GMO, cage free, sustainable and fair trade. Such claims are growing in numbers and contributing to category growth. NAE chicken contributed 67 percent of total chicken sales growth while organic produce contributed 30 percent to total produce sales growth.
"The free-from market will continue to expand, along with the demand for transparency of ingredients," sums up John Lochinski, marketing research & consumer insights manager at Kerry Inc. (www.kerry.com), Beloit, Wis. "'Grass-fed,' for example, is a term widely used regarding dairy products [as is] 'free from antibiotics.' Another growing trend is producing food that uses processes, methods and practices perceived to be sustainable or ethical."
Transparency is the reason why Tyson Foods (www.tyson.com) removed all added nitrites and nitrates from its Ball Park brand of beef hot dogs, and eliminated by-products and added fillers from its meat line. The Springdale, Ark., company's core portfolio of hot dogs is made with 100 percent beef. "Ball Park brand has always been about quality," states Colleen Hall, brand director of Ball Park. "We’re taking the lead [in transparency] by removing artificial nitrites and nitrates and replacing them with natural alternatives, so people can feel even better when choosing Ball Park beef hot dogs. Consumers want more transparency when it comes to what’s in the food they eat, and we want them to know we’re listening."
A 2016 survey from transparency technology tool provider Label Insight (www.labelinsight.com), Chicago, found four in 10 consumers claim they'd switch to a new food brand to increase product transparency, while 73 percent would opt to pay higher prices for products with complete transparency. Food shoppers actually study products before putting them in their basket, according to Label Insight. But the company also noted consumers are trying to understand what certain ingredients are, what cage-free means, if the product matches their ethics and if it's tested on animals.
"While positive for consumers, the push for transparency has created challenges within the industry," Label Insight admits. "Transparency is hard. Retailers are trying to react to varying preferences. And brands are trying to figure out how to stay relevant and provide transparency that resonates with consumers while simultaneously building trust and loyalty."
Brands are sharing more information with consumers than ever before. Those that are transparent, Label Insight says, will capture their audience. But how is this done? "Transparency goes far beyond advertising and mandatory disclosures," explains Label Insight's Karapetian. "Transparency is about sharing the good, the bad and the ugly, and trusting consumers to make the right decisions for their personal preferences, beliefs and lifestyle. By doing so, they will gain the trust and loyalty of consumers."
Labels Get Smart
There's only so much transparency you can share on the label of most food and beverage products. Food companies can provide a lot more information through the SmartLabel, which was created in 2015 by the Grocery Manufacturers Association (GMA) primarily as a solution for labeling genetically engineered ingredients but can be used for much more. SmartLabel is a QR code on a product that connects to a website to facilitate product research for consumers. It can be scanned using a smart phone app or found using a web search.
"People want more information, and are asking more questions about products they buy, use and consume," explains Pamela Bailey, GMA president and CEO. "The SmartLabel puts detailed information right at their fingertips. SmartLabel is a modern technology that will change how people shop and help them get answers to questions they have on the products they purchase when they want that information."
A year ago, Hershey began participating in the SmartLabel program, letting consumers know about ingredients, nutrition information and allergens in a certain item. "All food companies are trying really, really hard, as we are, to respond to the public and consumers to make sure they have all their questions answered about a product and its ingredients and where it’s made," says Deb Arcoleo, director of product transparency at Hershey. The company also started an online interactive mapping tool platform that offers visibility into the supply chain by letting consumers trace agricultural ingredients back to where they were grown or made.
Product developers, together with marketers, can also drive programs using strategically selected claims and attributes. "Segmenting organic and natural products can help you learn which claims and attributes resonate with which customers," DuBois says. "This can drive more granular customer targeting and activation programs."
Third-party audits and verifications are also ways to show transparency -- if the results should be communicated to consumers. Family-owned Nature's Path Foods, Richmond, British Columbia, considers third-party gluten-free verification a way to show consumers its organic cereals, bars, cookies and gluten-free products are what they claim to be, says Arjan Stephens, executive vice president.
"For our gluten-free products, we must ensure they're safe for those who must avoid gluten in their diet," Stephens said. "Placing a verification seal on our packaging gives consumers a tool to make an informed decision in the grocery aisle, and gives them added assurance the product is tested to be gluten-free. Third-party verification process helps guide and standardize our manufacturing process so that we continue to be leaders in producing top quality organic, gluten-free foods."
The birds and the bees
General Mills (www.generalmills.com), Minneapolis, is making efforts to responsibly source ingredients and to transition its portfolio toward more transparent offerings, while reducing its environmental footprint. Recently, it entered into a five-year, $4 million bee habitat partnership with the non-profit Xerces Society and the USDA to plant 100,000-plus acres of pollinator habitat through 2021. Bees are responsible for more than $25 billion in agricultural production in North America each year, according to the partnership, and such habitats benefits crops that need insect pollinators by helping bumble bees, squash bees, honey bees and butterflies.
"Pollinators supply one-third of the food and beverages that Americans consume," explains Jerry Lynch, chief sustainability officer at General Mills. "As part of General Mills’ global commitment to treat the world with care, our investment will help pollinators to continue to play a key role in sustainable food production in the U.S."
WhiteWave Foods, which was just acquired by Danone, also is part of the Xerces Society and manned a "Bee Friendly Green Kiosk" at March's Natural Products Expo West. The company long has maintained "commitments to reducing food waste, removing commodity-driven deforestation and increasing energy productivity in the supply chain," according to spokespeople. It recently joined the Climate Collaborative, which "leverag[es] the power of the natural products industry to reverse climate change."
This name alone says a lot. Endangered Species Chocolate LLC (www.chocolatebar.com), Indianapolis, uses fully traceable fair trade cocoa beans from West Africa. Clearly stating on its packaging that its products are vegan, gluten-free and Non-GMO Project Verified, Endangered Species says it's trying to increase awareness of several high-risk species such as the rhino, owl, jaguar and eagle with large images of each animal pictured on pouches of its new Barks and Bites chocolates.
The packages also include conservation statistics to help the chocolate stand out on shelves, said creative director Nicholas Lee. The products help fund wildlife protection programs though Endangered Species' GiveBack program, which donates 10 percent of its net profits annually to partnering conservation organizations. Some of the company's partners include the Rainforest Trust and Wildlife Conservation Network.
Tyson's public relations manager Derek Burleson, who spoke to college students at the University of Arkansas, discussed how producers and agriculturalists can better communicate transparency to consumers. It boiled down to this: "More than fresh food, the consumer wants knowledge," he said. "The consumer demands the three Ts: trust, transparency and translation." Trust derives from transparency and good communication, he said, encouraging producers and agriculturalists to be honest and speak the consumer's language. He suggested they also should stay educated, informed and prepared.