Featuring “clean” product attributes on labels is paying off handsomely across a wide array of food, beverage and other CPG/FMCG categories, Nielsen data confirm.
For example, sales of products that make organic claims are up 10% compared to a year ago, sales of those making “all natural” claims are up 7.8%, and sales of those claiming “no additives or artificial ingredients” are up 8%, according to a new Nielsen report on clean labeling trends, including consumer behaviors and sales results.
In the food and beverages sector, across categories, products that had labels showing the claim “nothing artificial” saw sales rise 3.6% in the 52 weeks ended May 20, products claiming “all natural” were up 7.8%, and those claiming “free of additives and artificial ingredients” were up 8%.
The sales benefits of clean claims span both “healthy” and “indulgent” categories. In fact, the two categories that saw the largest dollar sales gains due to clean-label products, in the 52 weeks ended Jan. 28, were salty snacks (up nearly $200 million, or 1.9%) and candy (up more than $150 million, or 11.7%). Close behind was ice cream, up $106 million, or 26.5%. Other categories showing big clean-label gains included “New Age” beverages, liquid coffees, baked breads, frozen entrées, “wholesome” snacks, yogurt and cookies.
“This purchase behavior confirms the notion that consumers will gravitate toward products with ingredients they trust and can easily understand, even when they’re seeking an indulgence,” notes Nielsen.
At the same time, there are staple, non-indulgent categories where transparency and an otherwise clean profile may not offset concerns about added sugar.
Nielsen consumer research shows that significant percentages of consumers say that sugar content influences their buying decisions within categories such as snacks/granola bars, yogurt, cereal and juice — categories where most of the products do contain added sugars. “In the snack and granola bar category, 94% of the UPCs contain added sugars, and 34% of consumers state that sugar content influences their purchasing decisions in the category,” Nielsen points out.
The report does not mention that in June, the Grocery Manufacturers Association succeeded in delaying the July 2018 implementation of the FDA’s revised Nutrition Fact label (no new date has been set), which would for the first time call out added sugar content. However, Nielsen does note that products in such categories might be affected by “shifts in consumer behavior” associated with such a new label.
But large food and beverage makers know that buying time won’t stop the consumer revolution. Campbell Soup, Mondelez International, Kellogg and other leaders are increasingly reformulating and/or promoting the clean attributes of existing products, as well as buying smaller companies that make clean products. One of many recent examples: The decades-old brand Triscuit, from Mondelez unit Nabisco, is now boasting non-GMO certification, as well as the products’ “3 simple ingredients” (shown above).
Indeed, one-third of all food and beverage sales are now generated by clean-label products — up 1.2 percentage points from two years ago, according to Nielsen. Categories with among the highest share of clean-label product sales include sugar and sweeteners (83%) and milk/dairy alternatives (90%).
A raft of data underlies the shift to clean ingredients and claims.
In a Label Insight survey, 39% of U.S. consumers said they would switch from their current brands to others that provide clearer, more accurate product information.
In Nielsen research, 73% of consumers said that they feel positively about products that share the “why behind the buy” information about their products, and 68% said that they’re willing to pay more for foods and beverages that don’t contain ingredients that they perceive are bad for them.
‘Free From’ Can Trump Healthy Ingredients Claims
Indeed, sugar sits atop a long list of “undesirable” ingredients that, ironically, also includes artificial sweeteners.
“In some cases, consumers are more interested in knowing what’s not included than what is included in the products they buy,” notes the report. “In fact, 53% of consumers say the exclusion of undesirable ingredients is more important than the inclusion of beneficial ingredients.”
One example: Sales of beverages that contain supposedly health-enhancing antioxidants and are free of artificial sweeteners rose 3.3% in the year ended Feb. 25, while sales of those that have antioxidants but are also calorie-free (presumably due to use of artificial sweeteners) declined 3.1%.
Nielsen notes that just 7% of products that don’t include artificial colors call that out on their packages, but those that do reported nearly 6% sales growth in the year ended April 29.
Levels of Clean Labeling Claims
Because there’s no universally accepted definition of what constitutes a clean product, Nielsen and Label Insight defined four progressive levels of clean label types: “free from,” “clean,” “simple” and “sustainable.” (See the report for definition specifics.)
They found that sales of food and beverages with conventional labels, with no clean claims/restrictions stated, were down by 0.3% versus a year ago, while those with “free from” and “clean” label types each saw 1.2% sales growth, those with “simple” label types saw 1% growth, and those with “sustainable” label types saw impressive 7.2% growth.
Sustainable claims appear to be particularly potent. In the 52 weeks ended Jan. 28, products making sustainable farming claims saw average sales growth of 11.4%, and those making sustainable business practices claims saw growth of 10.8%. Those making claims of sustainable packaging material, fishing practices, animal welfare, and production practices saw sales gains ranging from 2.5% to 4.2%.
The report also offers data on clean labeling trends in non-food FMCG categories.