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5 reasons why SmartLabel will — and won't — guarantee effective food industry transparency

Product transparency is a simple, straightforward concept. Give the consumer what they're asking for and sales will follow. But as the greater food industry knows, implementing it is not simple. In a post-smartphone world, information is at consumers' fingertips — a blessing and a curse to food manufacturers.

There's competition from agile startups armed with clean labels, frustrating statistics on the decline of processed food, and a distrust of "Big Food" that's only growing stronger with the rise of social media.

The food industry leaders' grip is waning. In the last five years, the top 10 branded food manufacturers lost 4.3% of market share mainly to smaller and mid-size companies, Rabobank analyst Nicholas Fereday told The Wall Street Journal.

But what strategies and tactics should the food industry implement to better improve transparency? An easy way, according to GMA's president and CEO Pamela Bailey, is its SmartLabel, where the scan of a QR code can yield ingredient, nutritional, and other product information in addition to web searches, company websites, and a forthcoming SmartLabel app.

That more than 30 large manufacturers are on board with the manufacturer and retailer-created program was reiterated at the recent GMA Science Forum in Washington, DC. These adopters include Hershey, ConAgra Foods, and Campbell Soup.

While transparency drives fervent discussion across the food industry, it is evident a be-all-end-all solution does not exist. SmartLabel is an ongoing effort rooted in the search to educate customers. Between advocates and skeptics, here's a look at whether SmartLabel will work:

1. Why it will: Technology is here to stay.

An obvious argument arose when SmartLabel made its debut: not all shoppers have smartphones. Additionally, the Environmental Working Group pointed out a Mellman Group poll that found only 16% of consumers have scanned a "QR" code.

"I think it's a bit of a red herring to say, 'What are you gonna do for the 30% of consumers that are not smartphone-enabled?' " said the Food Marketing Institute's Mark Baum during a GMA Science Forum panel. "Now that number (of people without phones) as Jim [Flannery, senior executive vice president, operations and industry affairs at GMA] says is increasing every day, and there's lots of other ways, 1-800 numbers, personal interaction and also sharing PCs at the store level to get that information to the vast majority of consumers today."

"It’s not necessarily the only way to get the information across, but if you're talking about the broadest way of disclosing this information, the most transparent and cost-effective and efficient way possible, then digital disclosure absolutely provides that," Baum later added.

2. Why it won't: Too much information could alienate consumers.

Information overlaod is a less frequently talked-about problem in the digital age of food, though it exists. The more information available, the more opportunity to overwhelm buyers.

"I think because there's so much information it may put people off," Mike Robach VP, Corporate Food Safety and Regulatory Affairs at Cargill, told Food Dive. 'I’ve got to go through five-six-seven clicks to get the answer to my question?' That could be a bit cumbersome for them and it might turn them off. So I think we have to make sure that we're responding appropriately to what the consumer needs are without inundating them with every detail that may not be of interest."

And once that's solved, the task becomes making that messaging clear. Around the world, according to a Canadean survey, more than one-third (34%) of consumers don't understand what "clean label" means.

3. Why it will — and won’t: The burden lies on the retailer and the manufacturer.

For those consumers that don't have smartphones, retailers have to be prepared to answer all product concerns. This places a heavy burden on finding the right customer service strategies. If retailers and manufacturers can work together to perfect customer service strategies, this becomes a win for all parties. 

"There's a training issue," Baum said. "You're going to have to train your store managers and other personnel to both be able to get up to the landing pages so that they can provide that information, or if the consumer prefers to talk about it to be able to speak knowledgeably about those issues."

4. Why it will — and won't: What else is there to do?

"What's the alternative?" Chris Policinski, president & CEO of Land O'Lakes said. "If we're interested in authentic transparency, we have to engage in a dialogue. We just got through this morning talking about consumers' thirst for information, and the need to engage them in a relatively complex story on an ongoing basis about a lot of things. What are our alternatives? It's not two or three words on a package that will do that. In fact, I would argue that’s inauthentic transparency."

Policinski's point echoes frustration across the industry. Consumers are fickle, and reaching an all-encompassing solution is complicated. That being said, the consumer is the ultimate decision-maker in the process.

"I think it's the onus of the seller to make sure the buyer has the information they need to make an informed choice," Elaine Krul, of DuPont Nutrition and Health, told Food Dive.

5. Why it will: Any transparency is better than none.

Providing consumers an informational outlet about a company is sometimes the most it can do. That's where the brand relationship building can start (or return to a company's favor).

"You're halfway home if you can get [the consumer] to the landing page … I think it does broaden our ability to communicate about a variety of things," Baum said. "So it's a very important step in establishing trust with consumers going forward."

"Anything to increase the transparency of the food industry for the consumer is a good thing," Krul said.

Filed Under: Packaging / Labeling Marketing
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