Opportunities Abound for Cleaning Up Your Label

March 3, 2020
Consumer demands for natural ingredients are changing the food landscape – and creating openings for new ingredients.

Thanks to the consumer push for clean labels, an exciting period of growth and transformation has arrived – and big opportunities are up for grabs for ingredient companies and investors that play their cards right.

As consumers are becoming increasingly aware of and educated about the potentially harmful effects of highly processed foods and artificial ingredients, they’re turning their attention and wallets to clean-label food products -- those containing natural ingredients and no synthetic chemicals, which is reflected on the labeling.

As with any consumer-driven trend, processors and ingredient suppliers are responding, reformulating recipes with new and cleaner food ingredients and providing more transparency about what’s actually in the food.

Some recent examples of reworked popular foods and beverages: Campbell Soup has removed all artificial flavors and colors from its products, including its iconic tomato and chicken noodle soups; Kellogg dropped artificial colors and flavors from its entire product line; Mondelēz has removed artificial colors and flavors from all its CPG brands; and Panera has eliminated all artificial colors, sweeteners, flavors and preservatives from its menu items.

Consumers show no sign of backing down. In fact, according to our research, 69% of consumers prefer food products with “no artificial ingredients,” 67% prefer “no preservatives” and 66% prefer products that are “all natural.” Food ingredient suppliers, manufacturers, investors and retailers must find ways to capitalize on the clean-label megatrend to stay ahead.

In that context, ingredient manufacturers are in luck. New technologies and food science are providing innovative solutions to meet the consumer-fueled shift to cleaner labels. From searching for the “holy grail” of clean-label bakery mold inhibitors to freeze-drying fruits and vegetables to using the stevia plant as a natural sweetener, manufacturers are finding inventive ways to make delicious food without sacrificing quality for health claims. Following are some of the food ingredients on the leading edge of the clean-label trend.

Natural mold inhibitors

The shift to clean-label ingredients has made extending the shelf life of bakery products a challenge for CPG companies. For example, calcium propionate, a chemical mold inhibitor, does a great job at preserving freshness in bakery products, but manufacturers have had difficulty finding a natural alternative.

One solution has been found in J&K Ingredients’ Bred-Mate and Cake-Mate. The mold inhibitors used in these products employ naturally fermented sorbic acid to keep cakes and bread fresh.

Another formulator, Corbion, replaced calcium propionate with its natural mold-inhibitor solution, Verdad MP100 – a combination of vinegar and natural flavors that matches the functionality and neutral flavor of calcium propionate. But, for now, the jury is still out: Consumers were equally split on their preference for breads containing MP100 and calcium propionate during taste-testing, according to Corbion.

Fruit and vegetable pieces and powders 

Processed fruit and vegetable pieces and powders give foods and beverages the taste and feel of fruits and vegetables, while also providing sweetness and color.

They come in myriad forms – such as crisps, granules, flakes – and, depending on the product, cost and desired outcome, can undergo a wide range of manufacturing techniques, such as freeze-drying, spray-drying, vacuum belt-drying and extrusion.

What’s more, depending on the manufacturing method, the addition of processed fruits and vegetables does not alter the clean label of the food to which they are being added. They also have many health benefits; they fortify food and beverages with vitamins, minerals and antioxidants.

Regulatory changes, particularly in the U.S., are expected to spur more growth. Now that manufacturers are required to identify added sugars on the Nutrition Facts panel, fruits may take the place of sugar to naturally (and stealthily) add sweetness to finished products.


As consumer preferences continue to evolve toward clean labels and against added sugars, so does the hunt for alternatives to sugar. To succeed in the marketplace, sugar alternatives must deliver on flavor, natural purity and cost.

While there are a number of all-natural sweeteners on the market – from allulose to monk fruit – stevia, derived from the stevia plant, is one that meets all three key criteria.

Given its affordability, flavor-improving potential and lack of any health or safety concerns, stevia is quickly gaining in popularity. It’s now present in numerous food and beverage products, ranging from soda to yogurt, either alone or in combination with other sweeteners such as sucralose or cane sugar. What’s more, advances in stevia technology could lead to explosive growth.


Hydrocolloids, consisting of gums and pectins, increasingly are being used to bring out texture and particle suspension and also maintain a clean label. This is creating steady growth in the global hydrocolloids market.

One type of hydrocolloid – gums – has become especially popular with food manufacturers and consumer packaged goods companies for its thickening and stabilizing properties. While gums have been on the market for some time, there has been a shift toward the specific gums that are perceived as acceptable on the clean-label spectrum.

A key example is the increased use of gellan as a “cleaner” substitute for carrageenan gum. Carrageenan, used as a thickener and emulsifier to improve the texture of products like ice cream, yogurt, cottage cheese, soy milk and other processed foods, has come under fire following some studies.

Other gums that are being used more are acacia gum (due to its low sugar content) and guar gum (which packs a hefty dose of fiber).

Another type of hydrocolloid riding the clean-label trend is pectin, which is employed primarily as a gelling agent in jellies and jams. Its growth outlook is particularly positive as it gains popularity in other applications.

Food enzymes

Enzymes manage every biochemical reaction in the human body. And thanks to food science, enzymes play a key role in a variety of foods, improving texture, visual appeal, shelf life and healthiness.

Lactose-free milk is a great example of enzymes at work. During the production process, the manufacturer adds small amounts of the enzyme lactase to the milk, which converts the lactose to galactose and glucose.

Lactose-intolerant consumers can enjoy the product, as they do not need to produce the lactase enzyme to digest the milk. Instead, the intestinal tract absorbs the smaller sugars, galactose and glucose, directly into the bloodstream. And, because enzymes are not present in the end product, it contributes to the clean label of the product.

Like gums, food enzyme use has gotten a huge boost from the clean-label trend. The food enzymes market is expected to grow at around 7-8% per year, fueled not only by cleaner eating but also by demand for premium and healthy foods, such as gluten-free bread, and the increased use of enzymes in food processing.

What’s next?

Whether freeze-drying fruit or creating clean bakery items, the food ingredient industry is experiencing a stimulating time of growth and transformation due to the clean-label megatrend. This evolving space offers big opportunities for players that can capitalize on a trend that shows no signs of slowing down.

For food ingredient companies, the key to success – and ultimately survival – is being aware of, and changing with, the latest clean-label developments. And, for investors, deals are abundant.

Those in private equity with a tight grasp on where to position themselves to play in the ingredients space will stand to profit the most. In a category where valuations have increased as interest in the space has risen dramatically, the time to join the clean-label ingredients trend is now.

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