The State of Transparency in Food and Beverage

Trust is the new currency of food and beverage brand loyalty, and the path to trust is transparency. But the definition of transparency means different things to different consumers.

By Lauren R. Hartman, Product Development Editor

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fp1705 cover storyTrust 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."

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