26 May 2024 09:53

Advertising & Marketing

Transparency and Clean Label- A need for today’s FMCG Market

As all marketers are well aware, today’s consumers are more educated than ever, largely because they have access to more information than ever—and that’s only going to continue. So when it comes time to shop, consumers are putting that knowledge to use, and they’re making their selections carefully and for specific purposes. They’re also willing to pay for products that meet their specific needs, and for many, those needs revolve around knowing exactly what’s in—and not in—the items they buy.

According to recent survey results from our strategic partner and product data company Label Insight, 39% of U.S. consumers say they would switch from the brands they currently buy to others that provide clearer, more accurate product information. Additionally, 73% of consumers surveyed by Nielsen say they feel positively about brands that share the “why behind the buy” information about their products. And what’s more, 68% say they’re willing to pay more for foods and beverages that don’t contain ingredients that they perceive are bad for them. In some cases, consumers are more interested in knowing what’s not included than what is included in the products they buy. In fact, 53% of consumers say the exclusion of undesirable ingredients is more important than the inclusion of beneficial ingredients.

So what does this mean for fast-moving consumer goods (FMCG) manufacturers and retailers? It means the “why” and “how” behind the products have become as important as the product itself. Notably, they’re the primary decision-making criteria that drives a purchase.

As a result of the consumer focus on transparency, claims like “natural,” “organic” and “gluten free” have become common on the packages of products throughout the store. The focus has also given way to a growing “clean” label trend—one that hinges on consumers’ desire for labels that are easy to read and contain simple ingredients. For consumers looking to take transparency a step further, claims on how products are made, such as fair trade, have become a factor in the purchasing decision.

Despite the growing use of the term “clean” to describe products across the FMCG space, however, there is no universally accepted definition for what constitutes a clean product. So to provide some analytical rigor to this term and to understand how sales have shifted toward cleaner products, Nielsen and Label Insight have created a progressive scale that describes the attributes within the clean arena.

But transparency and label claims aren’t just providing insight—they’re driving sales. For example, sales of products that make organic claims are up 10% from a year ago, sales of products that make “all natural” claims are up 7.8% and sales of products that claim “no additives or artificial ingredients” are up 8.0%. We can also see increased sales across the broader categories along the progressive scale that describes the attributes within the clean arena.

Given the state of information that the world now lives in, success along the path forward will depend on clear communication with consumers and a focus on what matters to them. Manufacturers, brands and retailers will need a keen sense of current trends toward product transparency in order to deliver on evolving consumer needs.

Clean label is a spectrum, and companies need to know where the shifts are happening. The bottom line is that transparency and clean label are not point-in-time fads. They have gone mainstream and competition for consumers seeking clarity, purity and responsibility is going to continue to increase.

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