Overhauling ingredient lists has become the expectation rather than the exception.
Today, 91% of U.S. consumers believe food and beverage options with recognizable ingredients are healthier, according to Innova. As such, consumers are demanding products be reformulated to remove additives and synthetics, and to introduce ingredients listed with recognizable names and products that are minimally processed. This has led to many manufacturers rushing to reinvent their original products without compromising on taste, appearance and mouthfeel. This has been so successful that clean label products proliferate across the shelves and cold cases of grocery stores nationwide.
Clean label has become so common now that experts argue we are entering the "Clean Label 2.0" phase, in which the meteoric proliferation of clean labels makes it harder for food and beverage companies with better-for-you options to stand out. So now the question becomes what is next for the future of clean label? Will labels get cleaner? Will the movement die down? Or will consumers be content with the new status quo that’s been established?
According to analysts, the answer seems to unanimously be more clean label.
“Clean label will grow exponentially especially as (a) new label form starts to take shape,” Alison Borgmeyer, dietitian and director of Cultivate at Ketchum, told Food Dive. She explained that with the proliferation of specialty diets like keto and gluten-free, which require consumers to limit the ingredients they consume, there will be a continued demand for manufacturers to deliver the products that fit their lifestyle needs.
The Consumer Goods Forum supports her thesis, showing food companies improved the health profile of about 180,000 products in 2016, an increase of more than 100,000 items from the prior year.
In particular, staple products like bread, tortillas and crackers are getting a lot of attention from manufacturers as clean label consumers continue to demand every-day convenient products with which to fill their shelves. Dairy products are transforming their ingredient lists fastest of all the segments. Statista reports in 2017, clean label milk and dairy alternatives accounted for 90% of sales in the category.
However, there is one notable exception to the nearly ubiquitous presence of clean label: treats.
Indulgent treats still lag behind
While consumers are clamoring for clean labels across segments, Kantha Shelke, principal at food science and research firm Corvus Blue, said that there are a few notable exceptions to this trend.
“Clean label appears to be of less consequence in indulgent categories including novel snacks (think Flamin’ Cheetos), sweets (confectionery is still driven by impulse and even the clean label fanatics do not seem to mind synthetic colors, flavors, and emulsifiers in their favorite candies), ice cream, and alcohol,” Shelke told Food Dive in an email. “If and when these categories get overhauled, it will probably start with the sweets and ice cream first and then on to what the adults indulge on.”
Indeed, brands like Halo Top and Amy’s Kitchen chocolates indicate there is a desire to bring clean label conventions into the snack and treat space. Even big CPG companies are getting on board, with Nestlé committing to removing artificial flavors and colors from its chocolate products. Similarly, Hershey publicly committed to prioritizing simple ingredients, transparency and responsible ingredient sourcing. Mars Wrigley Confectionery is also mapping out a five-year plan to replacing artificial flavors with ethically and sustainably sourced natural ones.
But still, Shelke said the segment overall has been slow to embrace the trend because treats are viewed as inherently not-so-clean, therefore the demand for change isn’t as fierce.
"Clean label appears to be of less consequence in indulgent categories including novel snacks (think Flamin’ Cheetos), sweets (confectionery is still driven by impulse and even the clean label fanatics do not seem to mind synthetic colors, flavors, and emulsifiers in their favorite candies), ice cream, and alcohol."
Principal, Corvus Blue
Tom Spier, founder of Boulder Food Group, co-founder of EVOL Foods and the previous COO of Bear Naked Granola, disagreed.
“You can’t look at products like Halo Top and say that’s not already happening in a pretty big way on the indulgent side, and there are other examples that are making a lot of progress,” like Ben & Jerry’s with its sustainability promises and Häagen-Dazs with its Five series. Ben & Jerry’s cleaned up its labels early on through pioneering social responsibility efforts, which have resulted in using 40% less carbon to produce certain flavors. Häagen-Dazs took a more surface-level approach and shortened its ingredients lists, removing preservatives, stabilizers, colors and palm oil.
Sugar still remains a sticky subject for many manufactures and consumers. Spier pointed to sugar as the primary opportunity for repositioning treats in the clean label space.
“If you’re just trading one type of sugar for another, I don’t know that it's much healthier, but if you’re really starting to upgrade the products through sweetener alternatives like monk fruit, you’re getting (cleaner) products to those people,” he said.
According to Statista, sugar and sweeteners are the second largest category to integrate clean label claims with clean label products, making up 83% of the market share in 2017.
However, making this switch and getting consumers to follow suit requires companies to pivot their product mix at such a scale that it can be difficult to do quickly, said Spier.
“I don’t think they don’t get it, they just have businesses that are built from product mixes that tend to rely on supply chains that are not as relevant to different demographics. That’s a problem. You can only do so much with that,” he explained.
Big companies vs. private label
Private label seems to be a haven for large-scale manufacturing and distribution of clean products. Retailers who have their own production facilities can offer products in response to consumer demands, which can often be faddish and change with the wind.
One of the principal contributions that private label has brought to the clean label movement is the ingredient no-no lists. Kroger has a banned "not-considered-clean" list from which it developed its Simple Truth line. Hy-Vee has its Clean Honest Ingredients label, which eliminates more than 200 artificial ingredients. Similarly, Whole Foods has its 365 Everyday Value brand, which bans high-fructose corn syrup, hydrogenated fats, and artificial flavorings, colorings, sweeteners and preservatives.
Borgmeyer explained that by virtue of their proximity to customers and less-siloed approach to product development, private label brands are primed to lead the pack in clean label initiatives.
“Often they can experiment and make recipe and label changes faster, and it’s OK if it doesn’t work,” she said.
"Consumers will tell you they don’t want artificial colors, flavors or preservatives in their food, but when the rubber meets the road, they end up not purchasing the product when artificials are removed."
Dietitian and director, Cultivate at Ketchum
She pointed to Aldi, which she said benefits from a scale that allows it to have direct connections to consumers through hosting daily focus groups with customers to hear exactly what shoppers want from their clean labels.
Borgmeyer said it's not that larger manufacturers are anti-clean label. They are simply obliged to be more cautious, since they are not as nimble as smaller startups or private labels. When they make changes, there needs to be assurance that it is really what consumers want. History has shown that even if consumers are demanding fewer ingredients, they are sometimes unhappy with the results as they affect color, texture and taste.
“Consumers will tell you they don’t want artificial colors, flavors or preservatives in their food, but when the rubber meets the road, they end up not purchasing the product when artificials are removed. There are many instances of this (think Trix cereals) and food makers are weary of chasing trends, so many take a wait and see approach.”
Cleaning up on a larger scale
Consumers are no longer just concerned about clean labels that demonstrate that the product is fit for consumption, but they are interested in products whose supply chains are also "clean."
According to Borgmeyer, this translates into seeking out products with environmentally friendly packaging and ethical claims. Innova Insights tracked the evolution of consumers’ interest in clean supply chains and the findings include a growing interest in labels containing “environmentally friendly" and “animal welfare” claims, which have shown a compound annual growth rate of 72% and 45% respectively from 2011-2015. At the same time, Innova found product launches featuring ethical animal, human or environmental claims grew by 47% between 2013 and 2017.
Clean label has evolved from something easy to read into a means of encouraging shoppers to think critically about what they put into their bodies and the types of food production they want to support. Being able to do so, however, requires not just plain English on labels, but transparency throughout the supply chain.
“Without transparency, you’re not going to find what you’re looking for,” said Spier. Transparency, he argues, will not only help clear up the continuing debate about what exactly constitutes clean label, but it will also give consumers agency to support companies and causes they believe in.
"Without transparency, you’re not going to find what you’re looking for."
Founder, Boulder Food Group; co-founder, EVOL Foods; former COO, Bear Naked Granola
Achieving that level of transparency will not happen overnight. Borgmeyer noted that in order to shift the clean label movement further down the supply chain, companies are going to have to be willing to invest into understanding their customer needs through the time-consuming practice of trial and error.
“You have to figure out what the certain trigger points are going to be the most compelling and impactful for your consumer from a clean label standpoint, and kind of place your bets,” she said.
She acknowledged that with so many different options to clean up the supply chain, companies have to be fiscally responsible with the avenues they choose to pursue. Sometimes, it can be impossible for companies to budge — even if customers are clamoring for change — because of supply issues or concerns that a resulting price difference would alienate their customers.
The price is right
A lot of supply chains, particularly in legacy companies, were constructed to achieve certain margin thresholds. The result is that these products, which aren’t as concerned with keeping labels clean, are able to produce far more cheaply — at least, until competing manufacturers are able to produce equivalent clean label products on the same scale.
“Sourcing natural flavoring, natural colors and whole food sources of vitamins and minerals is very costly," Borgmeyer said. "It’s hard to tell if the added expense will be worth it in terms of sales, especially for the mainstay, long-standing brands that have had longer ingredient lists for ages.”
Both she and Spier said frozen food is a segment ripe for change, but has to contend with entrenched supply chain logistics that make it difficult to alter recipes and exchange ingredients. When the added concentrates, emulsifiers, binders and artificial flavors are replaced with natural alternatives, the price rises significantly — which can be a risk if consumers aren’t putting their money where their mouth is.
In 2014, more than 60% of U.S. consumers cited a lack of artificial colors and flavors as an important factor when making food purchases. However, when General Mills took consumer demands to heart and put natural food colorings in Trix cereal, consumer backlash propelled them to bring back the original artificial recipe.
“In the end,” said Borgmeyer, “is it worth it if you’re still competing against others … that discount their products like crazy? Is it a bet that’ll pay off? That’s what many of the food makers are weighing today.”