Experts: Food labeling overhaul could 'level the playing field' or have 'unintended consequences'
1938 — That’s the year the government signed into law legislation that governs certain aspects of food product labeling still in use today. 1990 brought some sweeping changes, but even that was more than 25 years ago, and scientific research and consumer perceptions have changed significantly since then. That’s why legislators feel it’s time to overhaul food labeling legislation and bring regulations into the 21st century.
Whether they welcome or have concerns about a food labeling overhaul, manufacturers are trying to stay on top of the latest developments, both legislative and consumer-driven. These labeling changes pose significant costs for companies, but also mean potential improvements to consumers' interactions with food and beverage brands. Here's what experts have to say about the potential opportunities and drawbacks of current labeling initiatives.
Introducing the Food Labeling Modernization Act of 2015
Democratic members of the House and Senate introduced the Food Labeling Modernization Act of 2015 in November. Within it are directives for the Department of Health and Human Services like to standardize front-of-package labeling, develop definitions for words or phrases like "healthy," "natural," and "made with whole grain," and implement changes to the Nutrition Facts label, such as including added sugar.
"The measure is a commonsense solution to grocery store shelves that are filled with products labeled with confusing or deceptive dietary information," Sen. Richard Blumenthal (D-CT), who co-introduced the bill, said in a statement.
The FDA has already proposed some of these changes, such as updates to the Nutrition Facts label, including added sugars, and a request for comments about whether to define "natural" for food labeling and what that definition would entail.
The FDA has received thousands of these comments, and some experts, including Karen Duester, president and founder of Food Consulting Company, believe that the FDA will pass a final rule on several changes to the Nutrition Facts panel this year. The Food Labeling Modernization Act is meant to streamline many of these proposed changes, according to The Hill.
Is 2016 the year for a food labeling overhaul?
Not all experts feel the Food Labeling Modernization Act will make it far through Congress this session.
"It may [continue through Congress], but I don’t have as much expectation that that will actually pass and be signed into law by President Obama," said Duester. "There are a lot of other things on the legislative agenda, and I just don’t see that proceeding all the way to becoming a law."
Others in the industry believe the bill still has some kinks that need to be worked out first, particularly the proposed front-of-label standard, according to Michael Gruber, senior vice president of federal affairs at the Grocery Manufacturers Association.
"The bill deserves some deeper legal analysis to figure out where the unintended consequences may be in the finer details of a proposal like this," Gruber said. "… I’d be surprised if this proposal gets much attention in the House or the Senate, but we’re always willing to go talk to policymakers about these important issues."
FDA seeks to define 'natural' on food labels
Other food labeling overhauls are also being considered this year, particularly the FDA’s request for comments on the definition of "natural" for food labels, which has not been addressed since 1993.
Comments the FDA has received have ranged from a technical perspective that includes complex carbohydrates and synthetic molecules to concerns about how such a definition could impact labels for genetically modified foods. The FDA announced earlier this month that it would extend the Feb. 10 deadline for public comments by 90 days per the request of the Natural Products Association. The new deadline is May 10.
A federal definition of "natural" could "level the playing field" for all manufacturers, according to Duester.
"Sometimes people will feel like their competitors can get away with something [on their labels] that they can’t get away with," Duester said.
At the same time, if companies depend on a "natural" or similar label to pique consumers' interest and the standardized definition excludes their product, manufacturers could struggle finding a new way to market that product to health-conscious consumers.
Manufacturers have faced litigation in recent years over the contested use of "natural" on their labels. General Mills, for example, had to settle a lawsuit which involved the phrase "all-natural" used on Nature Valley products that contained high fructose corn syrup and/or maltodextrin, according to the Center for Science in the Public Interest, which filed the lawsuit.
Another case involving reconsideration of such a definition was when FDA sent a letter to Kind about using the word "healthy" on the label of products that contained more than the limit of saturated fat to meet the definition of that term. Kind argued that the saturated fat came from nuts, which are a healthy source of such fats, Kind's company spokesman Joe Cohen said in a statement.
"If FDA were to define a word like 'natural,' then everybody would use it in exactly the same way, and the plaintiff attorneys, those on the hunt for class action lawsuits, would have a more difficult time making a case," said Duester.
"It’s always beneficial for the industry to have federal standards for any type of definition," said Gruber. "Obviously 'natural' has been an example of something that’s been very controversial, and one reason we’ve been seeking a national standard out of the FDA is that it does provide clarity for the industry."
SmartLabel: Labeling solution or absolution for manufacturers?
Late last year, the Grocery Manufacturers Association introduced SmartLabel, an opportunity for manufacturers to share more information about products with consumers without having to print everything directly on the label. Instead, consumers can scan a QR code, which brings up an online resource with multiple pages cataloguing different pieces of information about the scanned product.
Around 90 manufacturers have already signed on to using SmartLabel, with increased visibility for the label expected by mid-2016, and about 30,000 products should be introduced with the new label by late 2017. Hershey was the first company to introduce the new label when the candymaker released its Hershey’s Holiday Kisses with the SmartLabel (and without artificial flavors) late last year.
"[SmartLabel] wasn’t designed in response to these kinds of [legislative] proposals, but the industry is far ahead of the curve as it relates to this," said Gruber. "We think it goes far beyond what you find in legislation, and it’s being done voluntarily."
However, manufacturers may still prefer printing this type of information on product packaging. Campbell has anticipated consumers' labeling preferences and recently committed to on-product labeling for GMO ingredients, becoming the first major manufacturer to do so. This enables companies to communicate with consumers directly using the product itself rather than depending on technology, which consumers may opt to ignore.
There’s no denying that between increasing litigation and consumer sentiments, the momentum is there for a food labeling overhaul. Such labeling changes could be costly for manufacturers, but they likely won’t be caught off-guard, as this is a movement that has been building for some time now.
How far initiatives like SmartLabel will go — and how it will be received by consumers — is still unclear, but manufacturers tend to revisit their product labels every few years anyway to keep them fresh, Duester says, so the perceived costs may not be as dire as expected.