Today’s consumers are becoming increasingly aware of the notion of clean label products. As a result, many major food and beverage manufacturers are rushing to phase out artificial colors, flavors and sweeteners, as well as in ingredients such as trans fats, high-fructose corn syrup and gluten.
- According to recent Nielsen analysis, conventional products sales are on the decline, while those products advertised as: clean, simple, free of artificial ingredients and sustainable are rapidly on the rise.
- Recognized as a "mainstream movement," Nielsen cites that that 93% of households in the U.S. have purchased clean label products at grocery stores, 70% at a large merchandiser or supercenter, and 31% at club stores such as Costco or Sam’s. Today almost half of all shopping trips include the purchase of a clean label product.
- Millennials and Generation X consumers are much more likely to seek out and purchase items labeled organic, GMO-free and no added hormones. On the other hand, members of previous generations, don't tend to place as much importance on these claims.
Recently, Kraft Heinz chose to reformulate their Oscar Mayer hot dog recipe in order to appeal to market demand for clean label products. Today Oscar Mayer hot dogs have a label highlighting the word ‘no’ three times, accompanied by text in smaller font explaining that the products are no longer manufactured with by-products, added nitrites or nitrates, and no artificial preservatives. In 2015, Campbell Soup announced that it will remove artificial flavors and colors from the majority of the brands’ North American products by the end of fiscal year 2018. Campbell’s has also introduced new items with simple ingredients to entice customers seeking clean labels. Following suit, General Mills, Hershey and many other food manufacturers are making similar adjustments to their ingredients.
The reason for these drastic measure is simple: 75% of U.S. consumers report that they read the ingredient labels of food and beverage products, while 91% resonate with ingredients they recognize are healthier according to new research.
More than ever, the food and beverage industries have economic incentives to move in the direction of clean labels, especially considering that a growing majority of consumers are willing to pay 10% more for a food or beverage item containing trusted and well-known ingredients. And 18% of consumers said they would pay a premium price of 75% or more for favorable ingredients.
Consumers who recognize product ingredients indicate that it is a very important factor in their purchasing choice, along with the ability to see nutritional information on food packaging. However, price still remains as the number-one deciding factor.
An important thing to remember is that while the general consumer population may prefer clean labeling on food and beverage products, there is still some slight variation in preferences depending on age, income and individual tastes of the consumer.
Contact QPSI to learn more about the latest trends for clean label product packaging.