Clean label goes mainstream
March 1, 2015
KANSAS CITY — While it may not have been the focal point of the Consumer Analyst Group of New York (CAGNY) conference in Boca Raton, Fla., this past week, the clean label trend played an undeniable role. As the chief executive officers of some of the food and beverage industry’s leading companies took the stage to promote their companies to the investment community most, if not all, paid homage to consumer demand for products with simple ingredients.
Within the context of the presentations the trend may have been no more than a few paragraphs or even a few sentences, but behind the scenes it is clear product development teams are working hard to reformulate and develop products to engage consumers who perceive a short, easy to understand ingredient label with health, wellness and quality.
Kendall J. Powell, chairman and chief executive officer of General Mills, Minneapolis, highlighted the opportunities he sees in the clean label trend when he told the CAGNY audience, “Around the world we see and understand that food preferences are changing,” he said. “People want natural foods with simpler ingredients. They are avoiding things like gluten, simple carbohydrates, artificial ingredients. They want more protein, more fiber, more whole grain. More natural and organic products. And consumers everywhere are snacking more than ever. All of these changes create tremendous opportunity for General Mills.”
It was no different for General Mills’ competitor the Kellogg Co., Battle Creek, Mich. Paul Norman, chief growth officer for the company, adopted a similar message when he said consumer purchasing habits are changing.
“Consumer’s relationships with food, their views of health, what food should be like are moving and we need to move with those trends,” he said. “The days of purely about absence of negatives have gone and the days of bring me more positives, bring me more simplicity, simple ingredient lists, bring me more protein, bring me more nutrients are clearly more than ever.”
During the presentation, Kellogg announced its plan to launch a line of cereals, mueslis, granolas called Origins later this year that have no preservatives, no artificial colors or flavors and packed with whole grains and fiber. The company described the product line as “real food prepared simply.”
For her part, Denise Morrison, president and c.e.o. of the Campbell Soup Co., Camden, N.J., focused on transparency rather than simplicity. She alluded to the fact that one reason some consumers have expressed distrust of large food companies is due, in part, to a lack of transparency.
“We are seeing an explosion of interest in fresh foods, dramatically increased focus by consumers on the effects of food on their health and well-being and mounting demands for transparency from food companies about where and how their products are made, what ingredients are in them and how these ingredients are produced,” she said.
Ms. Morrison did not explicitly spell out how Campbell may capitalize on the demand for more transparency, but she did emphasize it will play a part in the company’s strategic priorities.
The Hershey Co., Hershey, Pa., for its part, announced it will be transitioning much of its product portfolio to product formulations featuring ingredients perceived as simple in the coming years.
“The dialogue around consumers’ changing relationship with food is prevalent,” John P. Bilbrey, president and c.e.o., said during the company’s CAGNY presentation. “Consumers are telling all manufacturers that they want to recognize all of the ingredients in their food and that what they are consuming is made with the fewest ingredients possible.”
Hershey said it will begin making products with such recognizable ingredients as milk from local farms, California almonds, cocoa beans and sugar. The company also said it will share information on ingredients, sourcing, manufacturing and labeling with consumers on packaging and on-line.
“We will strive for simplicity with all of our ingredients, but we may not achieve it with every product,” Mr. Bilbrey said. “This is a journey and it will take time. We are equally committed to sharing what we achieve and what we don’t. For ingredients that may not be as simple, we will explain what they are and why we need them to provide the great flavors, aromas, textures and appearances that our consumers know and love.”
Mr. Bilbrey’s emphasis that the company’s transition to clean label products will be a “journey” is appropriate. The trend’s genesis is rooted in a perception, most often inaccurate, that some ingredients used in food and beverage product formulation may have negative health consequences. There is no rhyme or reason to how these perceptions develop or which will take hold.
While it may be comforting to think a transition to simple ingredients will alleviate some market pressures, companies will always be forced to reformulate in an effort to keep pace with the latest ingredients of concern. A key takeaway from this year’s CAGNY is that the leaders of the industry’s largest companies agree the effort is worth the investment.