Transparency for Applegate Farms is less about pushing product and more about talking to people about the product.
ROSEMONT, Ill. — Food industry executives and market analysts came together on Oct. 18 for the inaugural TransparencyIQ conference in Rosemont, Illinois. Patrick Moorhead, chief marketing officer for Label Insight, Chicago, the conference sponsor, shared proprietary 2017 research showing that 44 percent of consumers say food allergies, intolerances or sensitivities sometimes or always affect the way they shop. Further, nearly half (48 percent) of consumers currently do not feel adequately informed about a product even after reading its label, and two-thirds of consumers hold the manufacturer/brand accountable for communicating critical product information to make an educated purchasing decision.

Donna Berry
Donna Berry

“Consumers expect transparency from brands, but brands aren’t delivering,” Moorhead said. “Only 12 percent of consumers consider brands as their most trusted resource for information about what’s in their food. Most consumers turn to their phones, tablets or PCs to find more information online.”

Here’s where it gets real, Moorhead said: 39 percent of consumers would switch from their current preferred brand to one that offers more product transparency, while 81 percent would consider a brand’s entire portfolio of products if they switched to that brand because of transparency.

Talk with chart
Label Insight data puts a price tag on transparency. Almost three-fourths (73 percent) of consumers are willing to pay more for a product that offers complete transparency. They crave information from a trustworthy source — the manufacturer — as the media is no longer reliable for many. Brands must tell their story.

“Trust in media has plunged to an all-time low,” said Jay Porter, president of Edelman, Chicago, who provided insight as to why transparency is so critical in this day, a time when consumer trust in business, media, government and non-non-governmental organizations (NGOs), which are non-profit, voluntary citizens’ group, and third parties, continues to decline on an annual basis. “From 2016 to 2017, 82 percent of countries evaluated in the Edelman Trust Barometer showed a distrust in media, with 17 (of 28) countries reporting an all-time low.”

The 2017 Edelman Trust Barometer included a question regarding different sources of information, different formats for presenting information and different styles of communicating information. When presented with two options in the various platforms, a majority of respondents preferred the “talk with” rather than “talk at” approach.

Jay Porter
Jay Porter, president of Edelman.
The data showed 62 percent of respondents prefer a company’s social media for information, as compared to 38 percent who look at advertising. More than half (51 percent) think personal experience talking points are a better sell than data. The majority also prefer hearing about a product from spontaneous spokespeople, especially those who are blunt and outspoken.

“The world wants more from brands,” Porter said. “More than half of respondents believe brands can do more to solve social ills than the government.”

He explained how shared beliefs are the most powerful driver of commitment. This requires deeper transparency on a wide range of issues.

“Consumers increasingly want to know that a brand, a company is with them,” Porter said. “It’s not just about your product or even your supply chain.”

Fifty-seven percent of consumers surveyed for the 2017 Edelman Earned Brand study said they are either buying or boycotting brands based on the brand’s position on a social or political issue. This is up 30 percent in the past three years. Half say they are belief-driven buyers, with 65 percent of belief-driven buyers saying they will not buy a brand because it stayed silent on an issue it had an obligation to address.

“Speak up and they will buy loyally,” Porter said. “Speak up and they will pay a premium.”

Belief-driven buyers buy only a brand that speaks to a position on an issue. They also will buy more often, with about one-fourth (23 percent) paying as much as a 25 percent premium for a brand that supports the buyers’ position on an issue.

This growing consumer demand for transparency is being addressed both by regulation and a rise of voluntary claims marketers make on packages and media. Each industry and segment are at a different stage of transparency, said Kristi Weaver, partner, McKinsey & Company, Chicago.

In the overall food industry, information about product ingredients ranks highest, followed by manufacturing process and sourcing practices, Weaver said. Many marketers invest in clean label claims to remain competitive. Others do so to secure a competitive advantage based on consumer demand and their willingness to pay.

 “People don’t buy what you do. They buy why you do it,” said Gina Asoudegan, senior director of mission for Applegate Farms, Bridgewater Township, New Jersey, a business unit of the Hormel Foods Corp. She shared how Applegate Farms has driven industry change by forging alliances with non-government organizations.

“Transparency for Applegate Farms is less about pushing our product and more about talking to people about our product,” she said. “You need to sell them your mission because today’s consumers buy based on their values.”

Applegate Farms believes that the way food is raised may change and transform lives … from the farmer who grows an ingredient or product to the person who eats it.

Ludovic Meilhac, partner at McKinsey & Company, emphasized how transparency is much more than ingredient disclosure, with many layers of interdependent strategies to consider. Product developers and marketers must consider all aspects of transparency to succeed.

The retailer Raley's new shelf guide program uses simple and colorful icons to help customers quickly interpret whether a product metts their needs, without having to analyze muliple labels. 
This includes being transparent along the way, not just when you reach your clean label goals. That was the message shared by Deborah Arcoleo, director of product transparency, The Hershey Co., Hershey, Pennsylvainia. She shared five lessons learned while implementing the company’s transparency program. They include:

1) What matters is what people want to hear, not what you want to say; and consumers like knowing that even more information is available even if they don’t anticipate needing it.

2) Consumers want to hear the whole story, not just the good bits. Fess up to what you’re not satisfied with and what you are going to get better.

3) The absence of information is information. Consumers will make up a story — often inaccurate — for why they can’t find what they are looking for.

4) At the individual product level, your ability to be transparent is only as good as your data architecture. You can’t share what you don’t store and maintain.

5) People are hungry for knowledge of how food is grown and where it comes from. Videos of farms and farmers brings product to life and educates people about the food system.

 The conference concluded with Michael Teel, owner and CEO of Raley’s, a regional food retailer headquartered in West Sacramento, California, sharing highlights on the chain’s new shelf guide program. The program was independently developed by Raley’s in partnership with Label Insight, and was not driven by any brands or products. Label Insight uses data science to provide access to complete product information for more than 400,000 products. This rich data was used to develop a set of custom attributes for the Raley’s shelf guide.

“We knew that Raley’s could develop a program that truly addresses the needs of our customers and serve as a trusted adviser,” Teel said. “Raley’s shelf guide attributes will help our customers make easier decisions when shopping our stores. Only foods that meet the strict standards of Raley’s will qualify for the shelf guide tags. I challenge food manufacturers to aspire to meet our shelf guide standards for their products at Raley’s.”

The shelf guide combines current food trends and leading research to set strict standards for packaged food claims and provide label transparency. The tool differs from other shelf tag programs by taking a closer look at packaged ingredients, food processing and nutrition. Using colorful icons, the shelf guide helps customers quickly interpret whether a product meets their needs, without having to analyze multiple labels. Raley’s has even created two of their own shelf tag descriptions, making it easy for customers to find food that is minimally processed and nutrient dense.

For ease of use, the icons are placed directly on the price tag. The top two icons are shared on the tag in-store. Customers seeking value at the shelf, now will be able to use the shelf guide to find a better option at an affordable price. As a part of Raley’s click-and-collect service, online shoppers can sort for products using the shelf guide icons to quickly find products that meet their health and wellness needs. More than 13,000 items in center store have at least one icon.

Raley’s shelf guide descriptions include minimally processed, which is defined as “simply prepared with only clean ingredients and has limits on added sugar and sodium.” Nutrient dense is defined as “containing vitamins, minerals, dietary fiber and other beneficial substances that may have positive health effects.”