Ethical Performance
inside intelligence for responsible business
 
accompanying image

news

Food labelling transparency links supply chain and consumer

July 2016

by Elisabeth Jeffries — A social media campaign swept across the planet in 2010, clamouring for a halt to the use of palm oil in Kit Kats. Six years on, manufacturer Nestlé now sources it through a producer traceability scheme and describes it as “palm kernel” on the wafer bar wrapper. Given the procurement shift, this type of compensating alteration makes sense. However, companies may soon find their choice of wording will need more refinement, as sweeping changes are under way, and labels are the first line of attack.

One aim is to squeeze product description into narrower boundaries. In the US, for example, the Food and Drug Administration (FDA) proposed a revised nutrition facts panel in 2014, which is now under consultation.

“Nutrition labels were first required 23 years ago, with the only change being the addition of transfats. Science changes; the FDA wants to update the label and, ideally, increase its effectiveness,” explains Michael Jacobson, founder and president of US consumer advocacy organisation the Center for Science in the Public Interest (CSPI).

The EU has also set its sights on producers, reforming labelling in a step-by-step process. A nutrition declaration is mandatory from December 2016. “The new legislation will help consumers make informed decisions on the food they buy. It could also contribute to a better lifestyle and healthier choices,” says Erico Brivio, European Commission (EC) spokesman on food health.

In addition, meat from swine, sheep, goat and poultry must, since April 2015, be labelled with the country where the animal was reared and slaughtered. Like the US FDA, some of the EC focus is on sugar, which must now be reported in grams per 100g or 100ml, removing wording options previously available.

Middle-income countries have made even stricter interventions, such as Ecuador. In Chile, junk food is now prohibited to children under 14. Eliminating false consumer information, minimising ingredient fraud and removing barriers to free trade are main motivations for the change.

The source of concern is clear: according to the World Health Organisation, global obesity has more than doubled since 1980, as has adult diabetes in the US. Sugary food and drink, it is argued, is contributing to this epidemic, while producer honesty in doubt.

But as Jacobson comments: “companies don’t lie about sugar content, but they might make distracting claims on antioxidants or the advantages of 10 vitamins/minerals in sugary foods. They certainly don’t highlight sugar content voluntarily,” he says. Useful information is set alongside colourful, tactile packaging or cartoon characters to entice the buyer, and information added to minimum requirements. But that may get harder.

In the US, print size, positioning and wording are all under scrutiny, and an industry model proposed, particularly for sugar. “Including ‘added sugars’ [sugars added to foods and not present in whole fruit and vegetables] is one way to improve labels,” says Michael Jacobson. This is an especially controversial measurelong under dispute. Beverage companies have the most to lose because the presence of added sugars in their products is particularly high. “Added sugar” labels would mark out the product as unhealthy.

To combat the problem, the usual tactic is to act first. “Trade organisations have lobbied against stronger regulation on issues such as food labelling, high fat, salt and sugar taxes, suggesting self-regulation and providing wider choice are better ways to help consumers make more informed choices,” comments Spencer Fox of Tovera Consulting.

This has been the case in most countries. But as Fox emphasises, “they have never agreed on how to provide the best information to consumers.” The traffic light system devised by many food retailers is one example. “These can vary enormously across different brands and retailers and can be confusing. It seemed inevitable therefore that governments would step in at some point, and I think most of the big brands have been preparing for that,” he says.

Will label changes succeed in altering diets and educating the consumer, thus forcing manufacturer ingredient or product substitution? Probably not. For one thing, there is some justification for resistance to product reformulation, especially in the case of sweet substances. “Non-caloric sweeteners don’t provide the bulk that sugar provides in pies and biscuits for example, costs depend on the sweetener, and parents have long not wanted to give their kids artificially sweetened foods,” says Michael Jacobson.

For another, labels are part of a bigger package; marketing in the guise of information.  Product diversification maintains the broader presence of the brand, dwarfing nutritional information. However, a sense of threat is discernible on the high street, and has already prompted change.

For instance, brands like Coca-Cola and McDonalds now sell healthy food alongside junk, and use smaller containers. Innovative sweeteners like Stevia are now commonplace. And there is an upside.

As Michael Jacobson explains: “Companies love small cans, because, at least in the United States, they charge more and have lower ingredient and packaging costs. On the whole, I suspect that smaller cans could lead to less consumption,” he says. The smaller containers, such as Coca-Cola’s 15o ml can, attract a higher profit margin.

Meanwhile, the ICT boom continues, targeting consumers far beyond the food store. Researchers find customers generally unaffected by improved information, and social media campaigns short-lived and often ineffectual, as Brian Wansink, author of Slim by Design, explains. “Very little opposition comes from consumers. Facebook ‘like’ campaigns are not a form of activism but ‘clicktivism’,” he points out. In the US, Wansink indicates only 15-25% of buyers actively look at nutritional information, and none of these are obese.

Given continued impotence in the face of marketing ingenuity and endless ICT diversification, the battle between regulator and producer will thus continue. Among the newer demands is a type of cigarette pack warning. Taxes on fizzy drinks have been imposed in several countries, such as Mexico and the Pacific island of Samoa, and have been announced in the UK. A sugar tax is threatened across the globe. The drive for greater transparency will originate, not from mainstream consumers, but from strong governance and sound science. But as developing countries shift to Western diets, manufacturers can be sure of one thing: the recipe, rather than the label, will have to change.



Global | Transparency

3BL Media News
Membership
Sign up for Free e-news
Report Alerts
Job Vacancies
eNews
Events Updates
Best Practice Newsletter