Feature

4 food and beverage categories facing steep challenges from FDA's Nutrition Facts overhaul

When the FDA announced details for the long-anticipated Nutrition Facts overhaul last month, the industry responded with mixed reactions, ranging from full support to just short of outrage.

Among the changes making the most waves across the industry are the new line for added sugars, serving size updates and packaging size requirements, and new nutrition changes that will change daily value percentages for nutrients like sodium and dietary fiber.

The Nutrition Facts overhaul will impact every manufacturer. These four categories face some of the most significant challenges in adjusting to the new Nutrition Facts panel, particularly how it will impact consumer perceptions and label claims.

Low-fat/Fat-free dairy products

 

"Manufacturers are going to have to reinvent how they’ve approached weight management products to a certain degree, and that’s going to be a key challenge," William Roberts, senior food and drink analyst at Mintel, told Food Dive.

Conventional yogurt companies have already made efforts to reduce sugar in products as Greek yogurt brands started snagging more of the total market share. In a statement sent to Food Dive following the FDA’s announcement, General Mills highlighted sugar reduction initiatives in yogurt products like Go-Gurt, Trix and Yoplait Kids, and Yoplait Original. The latter now contains 25% less sugar as of its reformulation last year.

But beyond reformulations, which could be costly in terms of time, money, and ingredient resources, dairy producers that have relied on sugar in place of fat could use strategic marketing campaigns to reframe sugar use in a more positive light. Based on the product, brand, and audience, these campaigns might focus on:

  • Flavor. Adding sugar can make dairy products more palatable for children or the elderly, which encourages them to consume the products  and other key nutrients, such as calcium and protein, along with them. 
  • Function. Sugar and sugar-based ingredients play a number of roles in the functionality of a dairy product, from color and texture (including a dairy product's mouthfeel) to the fermentation process and preservation, such as reducing water activity to extend a product's shelf life.

"The opportunity for manufacturers there is to explain to the consumer exactly what the benefits are of the products — perhaps why some of these more negative ingredients have been added, (including) why there are added sugars in there," said Roberts.

Soda (and other sugar-sweetened beverages)

What could be particularly harmful to soda makers is the new rule on serving sizes, Roberts said. Under the FDA’s new serving size requirements, manufacturers will have to spell out how much sugar and calories are in the entire package, rather than a recommended serving size.

The same goes for other sugar-sweetened beverages packaged in single-serve cans and bottles, ranging from energy and sports drinks to options deemed "better for you," such as RTD tea, cold brew coffee, and cold-pressed juices.

Where sugar-sweetened beverages can offset concerns is launching products or reformulate current ones using what consumers deem to be more "natural" sugars, such as honey, maple syrup, agave, or cane sugar, Roberts said. A recent Mintel report found that more than half (57%) of U.S. adults feel carbonated soft drinks made with natural ingredients are healthier than soft drinks with artificial ingredients.

However, companies can no longer rely on "evaporated cane juice," which the FDA declared "misleading," in recently released guidance.

As with dairy producers, sugar-sweetened beverage manufacturers may have to fall back on strategic marketing campaigns in addition to or instead of product reformulations. Because the sweetness aspect is unavoidable in these types of beverages, two different approaches arise here:

  • Highlight any health benefits offered by "natural" sweeteners used
  • Position the product as an indulgence meant to satisfy a sweet tooth, be enjoyed as a reward, or be consumed for special occasions

On the other hand, beverages that do have their sugar sourced mainly or only from ingredients like fruit may be rewarded by the added sugars line. Consumers won't have to question where the sugar in a product is coming from ("added" versus naturally-occurring) once they read the new Nutrition Facts label, Karen Duester, president and founder of Food Consulting Company, told Food Dive.

Foods that contain salt (and make related claims)

 

Many companies, such as Mars and Nestle, moved to reduce salt in their products as they awaited the FDA’s proposal for voluntary sodium reduction targets, which were released last month. But manufacturers that have reduced salt could see their daily value percentage tick back up due to the FDA's new recommended daily value for salt.

Manufacturers have tried a range of tactics to offset salt concerns, from adding better-for-you ingredients, such as Mondelez's recently debuted Good Thins line, to emphasizing bold flavors, such as the Collisions line from PepsiCo's Doritos brand.

"(Manufacturers) have spent much greater efforts to boast of other ingredients that essentially give the impression that they nullify any potential bad things that might happen with the salt," Norman Deschamps, lead author of a recent Packaged Facts snacks report, told Food Dive in March. "And/or (manufacturers) focus on the different flavors to change the focus of what people are interested in for the snacks themselves."

Manufacturers may eventually get to a point where they can no longer reduce salt without drastically changing familiar flavors or losing functional value from the salt, such as preservation to extend shelf life. This may force manufacturers to look for sodium-reducing alternatives. Tate & Lyle's SODA-LO Salt Microspheres use technology to transform standard salt crystals into crystalline microspheres that yield the same salty taste but with a lower level of sodium.

Foods that depend on fiber content as a health benefit

Foods that make health claims related to dietary fiber on their labels will experience the opposite impact from the FDA’s new regulations compared to salt: A label’s daily value percentage will decrease because the recommended daily intake for fiber has increased.

This change could particularly impact an already ailing segment—breakfast cereal. But it can also impact any other whole wheat or whole grain foods that make dietary fiber claims on their labels. While many consumers have begun avoiding grain-based products because of gluten, manufacturers and health experts have promoted grains as having high amounts of fiber.

Now that those daily value percentages for fiber will decrease, breakfast cereals could lose one of the main health claims they promote on their labels to offset concerns about grains and sugars. Qualifying for label claims such as "good source of fiber" or "excellent source of fiber" will have different nutrient content minimums, and a product's prior amount of fiber may no longer qualify for the new Nutrition Facts' requirements for those claims.

Another option is to reformulate the product to boost fiber levels back up. Increasing fiber is important for health claims, but how fiber's functional properties change as levels are adjusted, such as particle size distribution and mouthfeel, will impact the end levels of fiber ingredients. This could inspire manufacturers to look for alternative sources of fiber that offer different advantages for cost, flavor, texture, and/or physiological benefits for consumers.

How manufacturers in these four categories adapt may uncover lessons for companies struggling with other major changes set by the FDA, such as the voluntary sodium reduction targets. And with other major label changes potentially on the horizon, such as FDA's consideration of a "natural" term definition, manufacturers that have a set of best practices in place for being more flexible to label changes will be a step ahead of the competition.

Filed Under: Manufacturing Marketing
Top image credit: Flickr user Triple Tri