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SmartLabel's role in GMO labeling compliance — and industry transparency

GMO labeling is officially mandatory, and QR codes could become the new standard on the grocery aisle.

On Friday, the White House announced that President Obama had signed the mandatory GMO labeling bill into law. Congress had passed the bill two weeks before, and the White House had already said it expected the president to sign the bill earlier in the month.

The U.S. Department of Agriculture now has two years to iron out the details of the law, including details surrounding the use of QR codes printed on product packaging as one option for disclosing GMO ingredients. A group of vocal consumers and public health advocates have pushed back against the use of QR codes, saying that electronic disclosure discriminates against demographics without smartphones to scan the codes while in stores.

The Grocery Manufacturers Association’s SmartLabel initiative, launched last December, represents one option for QR codes. Several manufacturers have already started using SmartLabel to disclose GMO ingredients and about 360 other product and company attributes. These companies demonstrated — before the law took effect — the role SmartLabel may play in the future of transparency in the food industry.

The birth of SmartLabel — and Hershey’s role

Because of recent legislation in Congress, SmartLabel has been linked to GMO labeling in the public eye. Did GMA develop SmartLabel specifically for GMO labeling? 

"A definitive no," said Jim Flannery, GMA’s senior executive vice president of operations and industry affairs, and a leader of the SmartLabel project.

"SmartLabel actually started as a board conversation we had about two years ago," said Flannery. "It was very much a food and a non-food conversation around, as industry, we've got a responsibility to address the consumer’s growing thirst for knowledge. We have to find a way to get consumers the information they’re seeking about the food, beverage and consumer products that they use. It was not any one issue that drove it."

Jim Flannery
Grocery Manufacturers Association
 

Taking a step back further, Hershey had conducted early consumer research in 2014 to generate an initial prototype for SmartLabel, Deb Arcoleo, director of product transparency, told Food Dive. Hershey saw SmartLabel as a potential mobile tool for industry transparency, and at that time, GMO labeling "really wasn’t even on our radar," Arcoleo said.

"The driver really was a lot of — especially if you look in food — there are a lot of badges and icons and certifications, and packaging starts to look like a Nascar car," said Arcoleo. "Our CEO in particular said, there's so much people want to know about food... The package is just a poor fit for delivering information. That's not what it was intended for."

"Meanwhile you've got smartphone ownership statistics going up dramatically year over year over year," Arcoleo continued. "Isn't there something better that we can do and couldn't we play a leadership role and get industry to align with us and do something really groundbreaking? That was really the impetus for it."

Deb Arcoleo
Hershey
 

SmartLabel adoption — now and then

As of mid-July, the SmartLabel database contained information on more than 1,200 items from nearly a dozen companies, ranging from major players like Hershey and Campbell, to smaller companies like Naked Bacon and Food for Life.

GMO disclosure was voluntary—though that will soon change—but all producers on the database had voluntarily provided GMO ingredient disclosure, Flannery said. That’s along with a host of other product details. These range from allergens—which Flannery says is the most-clicked area on the site—to ingredient origin and company details.

GMA conducted member surveys to help predict future adoption of SmartLabel across the industry. When the initiative began, 36 companies signed on to label an estimated 34,000 items in the market by the end of December 2017, Flannery said. Another 48 companies agreed to participate in the program but needed more time to devise an implementation forecast. With those companies, Flannery said a "conservative" estimate for participating items will cross the 60,000 threshold into 2018.

But now that SmartLabel may be an acceptable option for mandatory GMO labeling regulations, the adoption rate could increase. Increased demand for transparency could also drive SmartLabel adoption.

SmartLabel Tab Overview
Grocery Manufacturers Association
 

As more companies adopt SmartLabel—particularly larger manufacturers with many products—and SmartLabel’s visibility increases, companies that haven’t adopted it could "be at a bit of a disadvantage potentially from a consumer perspective," Arcoleo said.

"A consumer might assume, inaccurately maybe, that they’re trying to hide something or that they don’t want to share all this information, and that might not be the case at all," Arcoleo said.

SmartLabel holds promise for smaller natural and organic companies as much as major players, Flannery said.

"There are some interesting companies that have jumped in," said Flannery. "I guess not so surprising, but this is really attractive for the smaller organic businesses. You'll see Food for Life and Naked Bacon in there — those are brands that have a consumer base who really values transparency. They're some of the first brands to participate in SmartLabel."

One hindrance to SmartLabel is that the program is not free and requires an investment to participate. But Arcoleo noted that printing SmartLabel or an on-packaged statement is still a packaging change with similar costs.

"I think honestly it’s going to depend on whether the company sees value in being a full SmartLabel brand program participant, which means agreeing to display that landing page in all of its glory — not just the GMO piece,” said Arcoleo. "If they see value in that, then I think they will say, 'This is great. We can comply with the federal law, and we can also provide our consumers with a lot of information about our products.'"

How manufacturers have implemented SmartLabel so far

In late 2015, Hershey became the first brand to adopt SmartLabel for its Hershey’s Holiday Kisses. Without any marketing to support its SmartLabel adoption, as of mid-July, Hershey had seen about 47,000 QR code scans from about 26,000 unique users on the 300 products currently labeled with the QR code in stores, Arcoleo said. Hershey plans to have the entirety of its portfolio labeled with the QR code by the end of 2017.

SmartLabel on Hershey product
Hershey
 

Campbell sent a shockwave through the industry in January when it became the first major manufacturer to commit to label GMO ingredients across its portfolio, followed by several other manufacturers a few months later. But even though Campbell could use SmartLabel to abide by mandatory GMO labeling regulations, a company spokesperson told Food Dive that Campbell plans to maintain its commitment to printing "clear and simple language about the presence of GMO ingredients on the labels of all of our U.S. products."

However, Campbell will still participate in SmartLabel, just not via QR codes. Product information for three items—condensed tomato, cream of mushroom and chicken noodle soups—is listed on both the product database on SmartLabel.org and the company’s own www.whatsinmyfood.com, "with plans to add more over time," the spokesperson said. This represents another option for manufacturers that are grappling with whether to use a QR code or on-package disclosure.

Flannery also applauded Unilever’s Hellmann’s mayonnaise brand, which goes beyond typical product and ingredient disclosure. It includes details like sourcing of the soy for the product’s soy oil ingredient from Iowa and Ontario, Canada.

SmartLabel’s role in not just GMO labeling, but transparency across the food and beverage industry, has only just begun. Flannery said that GMA plans to launch broad scale communications to inform consumers about SmartLabel in the latter part of 2017. By then, GMA expects SmartLabel adoption to hit a “critical mass” and will be widespread enough that consumers can easily find the QR codes in stores, Flannery said.

Filed Under: Packaging / Labeling Marketing
Top image credit: Pixabay