What began as an industry buzzword is now an expectation, a handshake with the consumer to be open and honest about products. For companies that have yet to adapt transparency, getting on board could be a big problem, according to industry players.
"Transparency is no longer optional," said Charlie Arnot, CEO of The Center for Food Integrity, at a media briefing for the 2015 Food Integrity Summit in November. "It’s a basic consumer expectation."
"If we don’t embrace transparency ourselves, it will most likely be thrust upon us in ways that are not positive," Leslie Turner, general counsel for The Hershey Co., said during her keynote speech at the summit.
Manufacturers that ignore transparency risk losing customer loyalty, trust, and awareness as consumers direct their attention to competitors. Amid saturated markets and heated competition, companies find that they benefit from the act of becoming transparent themselves by uncovering problems in the supply chain.
Why transparency isn’t just about the consumer
What manufacturers may lose sight of is that transparency isn’t just about earning consumers’ trust — it’s also about internal improvement within the company. Being transparent means knowing the ins and outs of a company’s supply chain, including details that management might not always have on hand. Coordinated efforts and research along the supply chain enable companies to find out the information consumers are asking for, such as animal welfare practices for a company’s beef supplier or environmental practices for a produce ingredient supplier.
Sometimes these efforts will uncover undesirable details about a company’s supply chain, and those discoveries can lead to improved supply chains. After reports linked Nestle's seafood ingredients to questionable labor practices, the company launched a yearlong internal investigation that uncovered labor abuses at its Thai seafood suppliers. Nestle then announced the findings of that investigation to the public in November.
After performing internal audits and making necessary changes, manufacturers can feel more confident in granting consumers access to details about company practices.
"There’s a process that has to take place where you have to get some internal alignment and then begin that process and realize, it’s a never-ending journey to become and continue to be transparent," said Arnot. "But for the food system to be more credible and influential in that broader society conversation about food … transparency has to be a key platform."
How manufacturers put transparency into action
Start with listening.
When Hershey began reformulating its ingredients lists last year, the company used the language, "simple and easy-to-understand ingredients" to describe the changes. After listening to consumers’ perceptions of the changes, Turner said the company found that consumers thought the language was insulting because those consumers actually did understand what they were reading. She said consumers preferred "simple and familiar," so Hershey adapted. This type of adaptation based on listening to feedback is what consumers today are looking for.
A recent study shows that consumers will feel more positively about a company’s decision, regardless of whether the decision aligns with the consumer's beliefs, if consumers feel they were listened to and involved in the decision-making process.
Forget the jargon.
Corporate and food industry jargon can get in the way of a company’s attempts to be transparent. "Talking straight" about products, ingredients, and company practices is a better method for reaching consumers, according to Turner. Determining the best language that both delivers a clear message and resonates with consumers can be difficult and time-consuming, involving departments ranging from R&D to legal. This may also mean getting employees involved to explain ingredients and company practices rather than just forming a traditional corporate response, Turner said.
Answer not just the "what," but the "why."
Instead of just sharing what the ingredients in a product are, explaining why they’re there is another facet of improving transparency. This means defining what an ingredient's purpose is: freshness, shelf life, flavor, texture, etc. The "why" often aligns with company values, which consumers consistently rank as most important to them when it comes to building trust, according to Arnot.
Share the good — and the bad.
Transparency isn’t just about manufacturers sharing their successes with sustainability initiatives or their latest product reformulation without artificial ingredients. It also means sharing the less desirable aspects of products, ingredients, or corporate practices, and this can be the biggest challenge for manufacturers trying to improve their level of transparency.
"Don’t just give me the good, give me the good and bad, and give it to me in a way that helps me make an informed decision," Arnot said. "If you do, I’m more likely to believe that you’re going to be transparent, which translates to trust."
"If somebody’s not going to be open and honest with you, including the good and bad things that are in process, then it’s very difficult to have a trusting relationship," Deb Arcoleo, director of product transparency at Hershey, told Food Dive.
Campbell is taking a risk by labeling GMO ingredients in its products, as seeing that a product contains GMO ingredients will turn off some consumers. Regardless of whether they continue buying those products, many consumers will consider Campbell’s inclusion of such controversial information on its product labels to be a step toward increased transparency. Judging by study findings that show GMO labels do not necessarily deter consumers, Campbell will win over more consumers with its transparent labeling than the company risks losing.
Be proactive, not reactive.
How a company handles itself, its messaging, and its next moves following an event like a product recall or the discovery of something controversial in its supply chain is crucial, but transparency is about more than just being reactive. Manufacturers that are forthcoming with information, both good and bad, are more likely to appeal to consumers’ desire for a completely open and honest company.
But there’s one other crucial benefit that manufacturers derive from putting transparency into practice. They can stay more in control of the public discussion about their ingredients, products, and company practices by steering the conversation on digital and social media or with their product labels. This will give manufacturers confidence to face today’s inquisitive consumers and provide them access to information that drives consumer trust and loyalty.