Millennials and Generation X consumers are more likely than older consumers to purchase products labeled organic, non-GMO and free of added hormones.
NEW YORK — The “why” and “how” behind a product have become as important as the product itself, according to new research from the Nielsen Co. Nearly 4 in 10 US consumers say they would switch from the food and beverage brands they currently buy to others that provide clearer, more accurate product information, Nielsen said.

Sixty-eight percent are willing to pay more for food and beverage products that don’t contain ingredients perceived as bad for them, and 53 percent say the exclusion of undesirable ingredients is more important than the inclusion of beneficial ingredients. As an example, Nielsen found that beverages that are free from artificial sweeteners are outperforming calorie-free beverages with antioxidants.

“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,” Nielsen said. “Manufacturers, brands and retailers will need a keen sense of current trends toward product transparency in order to deliver on evolving consumer needs.”

Sales of products with organic claims are up 10 percent from a year ago, while sales of products with “all-natural” claims have increased 7.8 percent, and sales of products with “no additives or artificial ingredients” are up 8 percent, Nielsen said.

“But navigating the world of packaging claims can be difficult,” Nielsen noted. “As many popular attributes have gained traction, marketers have found ways to create variations that sound good, but actually make it trickier to know exactly what’s in — and not inside — a product.”

Nielsen found that only seven percent of products that don't include artifical colors make the claim on pack.
Adding to the confusion are products without packaging claims. Nielsen found that only 7 percent of products that don’t include artificial colors make the claim on pack. The products that do make the claim, however, posted a nearly 6 percent increase in dollar sales over the past year.

“So, the insight here for manufacturers and retailers is clear: Identify explicit consumer needs and then make sure their product labels appropriately publicize desirable attributes,” Nielsen said. “That’s because today’s consumers are just as concerned about ingredients and formulations as they are about being able to understand those formulations when they’re printed on a package.”

Still, consumers may feel overwhelmed by the abundance of packaging claims, which, they not only must decipher, but also determine which are most relevant to them.

“Clean label is a spectrum, and companies need to know where the shifts are happening,” Nielsen said. “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.”

Not all consumers prioritize clean labeling, transparency and sustainability, Nielsen said. Millennials and Generation X consumers are more likely than older consumers to purchase products labeled organic, non-GMO and free of added hormones. Households with higher incomes also place high importance on products making such claims.

“Demographic groups influencing the forward movement of this trend include consumers under the age of 35, those with annual household income over $100,000 and families with children,” Nielsen said. “They’re leading the way with respect to buying products they believe are better for them, their families and the planet. They care much more about transparency and clean label than older generations do, and their spending prowess is growing.”