Study: Nutrition ratings can boost sales for grocers
- Researchers found that stores implementing Guiding Stars — a nutrition rating system developed in 2006 to help consumers make healthier food choices — generates higher sales for retailers, according to a news release. Results vary by category, according to the researchers, with best returns coming in those perceived as “healthy,” such as fruit and vegetables, grains and cereals, dairy products, eggs, meats and fish.
- The study, which was conducted by Public Health Ontario in collaboration with Duke University, the University of Toronto and the University of Waterloo, also found that the Guiding Stars nutritional rating system helps shoppers choose items with less trans fat and sugar and more fiber and omega-3 fatty acids.
- Guiding Stars uses a proprietary science-based algorithm to assess the nutritional value of grocery items based on their ingredients and information listed on the Nutrition Facts panel. Products are assigned ratings based on a three-star system, with three stars representing the highest nutritional content. The program was first deployed by Maine-based Hannaford Bros. Supermarkets, and is now utilized by more than 1,200 U.S. supermarkets, including all Hannaford and Food Lion stores. In Canada, Guiding Stars is exclusive to the country’s leading grocer Loblaw and its various banners.
The positive findings regarding the Guiding Stars nutritional rating system — both in terms of higher sales and healthier choices for consumers — serve as an endorsement for these types of consumer-friendly nutritional programs.
The boost in revenue is “a wonderful thing,” Guiding Stars' client services manager Elizabeth Caton told Food Navigator-USA. But perhaps more importantly, programs like this generate consumer loyalty because consumers “feel that this company is about more than the bottom dollar, and they are about actually helping and supporting the consumer as well.”
Guiding Stars, which was first implemented in Hannaford Bros. in New England more than a decade ago, was one of the first nutrition rating systems to hit the market,. Other retailers have launched similar programs of their own, with many based on a color-coding scheme. For example, Seattle-based PCC Natural Markets’ color-coded label system highlights four popular attributes: organic, non-GMO, gluten-free and local. The retailer has indicated that more than 60% of the labeled products it carries have at least one of these attributes.
Not all systems have proven effective, however. The NuVal shelf tag program, which assigned products a score of 1 to 100 based on their nutritional value, has recently been phased out of stores. At its peak, NuVal appeared in more than 1,600 stores across the country, including retailers like Tops Friendly Markets, Raley's, and Big Y in Massachusetts. Food Navigator-USA reported that the company's downfall were flaws in its algorithms, which ended up ranking some snack foods, soft drinks and desserts better than some canned fruits and vegetables.
Some shelf labeling systems are looking beyond nutrition attributes. HowGood offers a sustainability rating program that's currently 400 stores nationwide. HowGood has evaluated more than 250,000 products, ranking them “Good,” “Great” or “Best” depending on where and how products are sourced, how they are produced, and how the manufacturer's organization operates.
As with Guiding Stars, HowGood's implementation has been linked with higher sales. In a recent interview, HowGood CEO Alexander Gillett told Food Dive that “Best” rated products see as much as a 230% sales lift.
"It's huge. You're not selling 230% more milk, but you're selling 230% more sustainable milk," he said. "We're not convincing people to buy more products. We're convincing them to buy better products.”
These results indicate a promising future for shelf-labeling systems. Of course, retailers have to make sure any system they implement is based on rigorous scientific research. They also need to make sure shelf tags are providing clarity for shoppers and not simply creating more clutter.
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