Grocery shoppers are increasingly demanding transparency and a closer connection to their food, according to an FMI and Label Insight report, The Transparency Imperative: Product Labeling from the Consumer Perspective. While 93% say it’s important for brands and manufacturers to provide detailed information about what’s in food and how it’s made, 75% of shoppers reported being more likely to switch to a brand that provides deeper product information beyond what’s on the label, compared with just 39% in a 2016 similar study. In addition, 54% of shoppers are even willing to pay more for a product with additional product information.
Shoppers define transparency as knowing what ingredients are in a product, as well as being made aware of nutritional and allergen information. A complete list of ingredients, which was important to 65% of shoppers, and easy-to-read ingredients written in plain language, important to 59%, are the clearest indicator for consumers that a brand or manufacturer is being transparent, followed by in-depth nutritional information, at 46%.
Transparency matters more to certain demographics, specifically 80% of online shoppers, 76% of college graduates, and 75% of higher grocery spenders (who spend more than $125 weekly). However, there were minimal differences across the generations, as 73% of Boomers, 70% of Gen Xers and 67% of Millennials say transparency was important to them.
While 73% of shoppers say they know where to look for more detailed product information for food, such as by going to specific websites or by using grocery apps, only 21% are completely confident they know where to find this information. Shoppers were almost evenly divided on whether there is enough information on the packaging to help them meet their dietary needs or lifestyle preferences, as well as on whether labels are too hard to read, too confusing or not clearly labeled for their needs.
Building loyalty among shoppers is essential to a brand’s success, and labeling can greatly impact consumers’ level of loyalty. Eighty-six percent of consumers say they were more likely to trust manufacturers and retailers who provide ingredient definitions beyond the label. Eighty percent would be more loyal to a brand that provides in-depth product information beyond the label.
Most consumers only somewhat trust manufacturers and brands, at 67%, or government institutions like FDA and USDA, at 57%, to provide information about what’s in their food, and few completely trust them, at 24% and 31%, respectively. In contrast, farmers are almost universally trusted, at 96%, whereas only 16% completely trust the product information online retailers provide. Additionally, grocery stores and online retailers were least likely to be seen as completely responsible, but 50% and 53%, respectively, say they are at least partially responsible.
Eighty two percent of shoppers prefer to get product information right on the package, while 34% prefer to go online or scan the package or UPC with their smartphone or other device, and 32% prefer to get product information from the shelf or other signage.
Consumers found the most valuable product information through on-shelf detailed product information, at 90%, while 87% cited notations right on products letting them know whether the product meets certain dietary criteria. Additionally, 80% found value in being able to get detailed product information in-store or through a smartphone or other device, while the same percentage thought icons on products letting them know whether retailers consider them healthy were important.
Those shopping for household members with allergies and with children, at 92% and 89%, respectively, were most likely to use their smartphone to find more product information. Forty percent of consumers seek out information such as ingredient definitions via smartphone, 34% look for in-depth product information and 32% look for ingredient sourcing.
When shoppers get confused about a product label, 36% will look to another product to see if they understand its ingredients better, while 30% will just choose to buy another product instead. In addition, 76% say they look elsewhere when the information on a product’s packaging is not enough for them to be sure it meets their dietary needs. The most common source of information is online, at 54%, while 17% will ask family or friends, and 15% will seek out a store employee to help clarify a product label. Shoppers are most likely to say they understand what is meant by a claim that a product is organic, at 44%, while they are least likely to understand what is meant by clean label, at 51%.
For the full story, go to this week’s Food Institute Report.
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Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at firstname.lastname@example.org to talk about anything food-related.
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